[Messari AMA] Steven Kokinos, CEO of Algorand

Messari hosted a public AMA with Algorand's CEO, Steven Kokinos in the Messari community group. This is a transcript of the conversation.

Messari: Steve, thanks so much for joining this afternoon to field questions about Algorand! We have a bunch of good questions in the queue, and I'm excited to chat. Thanks for being here.

Steven Kokinos: Thanks for having me! Excited to talk to the Messari community. And thanks to everyone for joining

Messari: Before we jump into specific submitted questions, can you give a high-level overview of your team's motivations for building and deploying Algorand? Why Algorand?

Kokinos: First, Algorand’s founder, Silvio Micali, is a Turing Award winner and a cryptography pioneer who has been in this space for over 30 years. Silvio’s research interests are cryptography, zero knowledge, pseudorandom generation, secure protocols, and mechanism design and blockchain. In particular, Silvio is the co-inventor of probabilistic encryption, Zero-Knowledge Proofs, Verifiable Random Functions and many of the protocols that are the foundations of modern cryptography.

Silvio recognized the flaws that other projects had and decided to rebuild from the ground up a permissionless, decentralized platform that removes the technical barriers that have really prevented mainstream adoption of blockchain.

We are also excited to share that MainNet launch a couple weeks ago has resulted in a live network with over 1,000 transactions per second, 4.3 second average latency, and over 1,200 nodes standing up across the globe. In the first 2 weeks of live MainNet, over 50k transactions have been processed, which is roughly equivalent to 6 months of Bitcoin transactions or 2-3 months of Ethereum transactions. Further, there have been zero partitions, zero critical bugs, or zero periods outside of “optimal” performance level.

Messari: You almost already answered my second and final prefatory question. For those who might be new to Algorand, can you share a brief “ELI5” description?

Kokinos: Happy to do my best! Here's my take... While information can flow freely because of the internet, money (value) still can’t. Transacting today takes time, can be expensive, relies on others and has a number of other inefficiencies.

The core innovation behind Algorand is that in other systems miners, or a selected group of block proposers run the network. In Algorand, the USERS are the ones who run and secure the network. This is because in Algorand, in every round, each user runs a lottery in secret on their own computer, and of those users one block proposer is chosen at random and a committee of approvers are chosen at random. Those selected change with every block, and nobody knows who was selected until the block is confirmed. So it’s very fast (the lottery only takes a fraction of a second) and secure, because you don’t know who to attack until the block is already confirmed.

Messari: We have a few questions about Algorand’s refund policy and future auctions. Can you explain the refund policy and, if possible, speak to future auctions? I realize you might not be able to go as in-depth as some questioners would like.

Kokinos: The Algorand Foundation has shared all the details on the refund policy where they outline that this policy provides an opportunity for people to become aware of the tech and their commitment to the quality and utility of the currency.

They have also shared safekeeping measures of the refund policy here. The Algorand Foundation is responsible for the distribution of the Algo, the native token of the Algorand platform, so we look forward to more announcements from the team over there on future auctions.

With respect to future auctions unfortunately folks will have to follow the Algorand Foundation announcements for that.

Messari: We have a couple questions about dapp development on Algorand. Can you provide an update on developer activity? And could you share a bit of Algorand's vision for dapp development? What does an ideally healthy dapp ecosystem on Algorand look like in a world with lots of other chains vying for similar use?

Kokinos: First, we are firm believers that in order for the crypto community to grow we need to tap into the 20M developers around the world who are not currently building blockchain/crypto aapps. There are only around 100,000 developers building on blockchain today, though it's growing quickly.

One of the things we've prioritized is simplicity across our tools, guides, howtos, libraries, and software overall. We want it to be easy for people to use the existing tools they are already comfortable with without needing to understand everything going on in the core tech. This includes tools from some of our partners.

Flipside Crypto, will be providing a free DApp analytics toolset on our blockchain to give Algorand-based developers a superior level of user insight, helping them build the best DApps possible. Info on this here. Examples of some projects that are building layer 2 applications on the Algorand platform now that MainNet has launched are Otoy Inc., AssetBlock, Syncsort, and Top Network.

Messari: We're fans of Flipside here at Messari.

Kokinos: We really want to be the platform that gets layer 1 right, and enables a broad range of both financial instruments and dapps.

Messari: Here’s an interesting question about price volatility. How does your team think about managing volatility and day-to-day transaction utility?

Kokinos: First, it's important for everyone to realize that the network was only launched a couple of weeks ago. We're really excited about the key technical stats and growth of the community supporting the network.

On the token side, The Algorand Foundation recently announced members to their Economic Advisory Committee. We look forward to seeing what Massimo Morini and Co-Pierr George will contribute to the Algorand network and economics of the network going forward.

We'd encourage everyone to stay tuned as more members of that team are announced as well as some of their research is released, but I'm sure we'll all see some interesting information from them in the near future

Messari: I want to transition a bit to chatting about Algorand supply economics, which we received a couple questions about. Can you give a quick breakdown of Algorand’s supply economics? And how does staking work with a fixed supply?

Kokinos: Sure. Supply in Algorand comes from a few places. Node relay incentives are a primary one in early days, participation rewards (rewarding users for either keeping their stake online or delegating to the protocol). While at network launch many of these rewards are codified going forward staking will form a market based system via transaction fees (though we always expect these to be very low even at high scale) that rewards those supporting the network. There will be more to share with our community in this area soon.

Messari: We have a couple questions on the process for becoming a relay node, who can become one, the parameters for operating one, etc. I don't think we have time to dig too deeply into all of those details, but can you give a general overview of steps and availability to running a relay node?

Kokinos: As a protocol Algorand is public and permissionless, and anyone can run a participation node. A decision was made at launch to have an initial group of relay nodes that were known to maintain a consistent specification and network throughput, and secure the network while it becomes decentralized.

As I alluded to above, there will be a permissionless relay incentive which will enable anyone in the community to run relay nodes as well, and more information on this will be forthcoming in the near future

Messari: We have a question from Slido about participatory incentives for auctions: Why would a potential buyer participate in an auction instead of buying via an exchange that lists $ALGO?

Kokinos: The idea behind the auction is to enable new Algos to enter circulation in a fair way that doesn't favor anyone person or group over another. In addition, the concept behind the refund policy is to encourage new participants in the crypto space who may have concerns about volatility or uncertainty about how the system works. We'd encourage anyone who is interested in learning more about it to go to algorand.foundation.

Generally we'd expect that for day to day use the exchanges would be a more convenient way of obtaining Algos for transacting and running applications, especially since auctions only happen periodically

Messari: Who are some of the biggest competitors to Algorand? What blockchains keep you awake at night?

Kokinos: As I mentioned earlier the crypto market in general has a long way to go toward mainstream adoption. Less than 1% of both developers and end users are involved in the space. We believe that a group of projects, technologies, and standards will be needed for global adoption and welcome collaboration with projects. So we're focused on bringing in new participants and think projects should find more ways to work together to grow the space overall.

Messari: Thanks so much for taking the time to chat. This has been super informative; I really appreciate your time. Last question before we conclude: What does Q3 and Q4 2019 look like for Algorand? And as a corollary to that: what are the best ways for us to keep up with Algorand developments and continue conversations based on questions we discussed today?

Kokinos: We are excited to have delivered on the promises we made in the first half of 2019 --- launching TestNet, releasing developer tools, building our community, reaching performance goals, releasing our open source code, launching MainNet, continuing to build a phenomenal team here at Algorand, Inc. while also welcoming a highly respected group at the Algorand Foundation - including participants to a global university program.

We have a substantial number of organizations who have begun building on Algorand, and that number continues to grow as the community realizes the benefits of Algorand’s scalability, secureness and decentralization. We look forward to working with our community to build the next generation of Dapps for what we call the borderless economy.

In addition to the growing number of use cases being built on Algorand, we are looking forward to further building the items on our roadmap. While we wanted to get the foundational tech out there so that people can become comfortable with it, this is just the beginning. We are an innovation-focused blockchain and our roadmap with items like Vault, Pixel, Self-Validating Transactions, Atomic² Swaps, Post & Trade Sales, Smart² Contracts and more will further increase what is possible on blockchain. Check out Silvio Micali’s blog on Algorand’s Forthcoming Technology.

We'd love for anyone who is interested to get involved. Follow the official Algorand social channels --- or join us here on Telegram. Also community.algorand.org and developer.algorand.org.

Messari: Thanks again so much, Steve!

Kokinos: Thanks, and thank you to everyone joined for your time! Really appreciate your interest in Algorand.