![]() ![]() This is because that shop probably has agreements with network "Y" since they have a deal on less fees with network "Y." Think about your favorite local pizza shop that doesn't accept credit cards from "X" network. I'm sure we all have stories of our cards getting swiped somewhere without our authorization. There are many areas for things to go wrong, transactions to fail and for fraud to occur. In reality, there are many more steps in this verification process such as verifying the transaction with the merchant's bank, your own bank, a payments gateway, card association, etc. The point of sale terminal is still facilitating many other steps to verify the transaction that just took place (purchased your starbucks drink). However, the transaction is not actually done yet. You swipe or insert your credit card into the point of sale terminal, wait a few seconds, and the transaction is "complete." You wait for your drink and then go. You go to Starbucks, order your drink and present your credit card to pay for your purchase. In my opinion, there are not enough resources out there that put functionality into plain words so I will try and do that here with a payments example. More important than all of that is how this protocol can actually be used. ![]() If you made it this far, you may roughly understand what Algorand is and how it is different than other blockchains. Proof of stake keeps the power in the hands at random of token holders and is not susceptible to influence. The alternative to "proof of stake" is "proof of work" or the consensus Bitcoin uses, whereas supercomputers compete against each other using lots of energy and resources to find the next block/solution to the blockchain. In other words, users have a randomized and handsomely lucrative incentive to hold Algorand units to verify transactions. As a reward for holding Algorand units, users are awarded compounded interest between 6% and 8% of their stake for helping further the blockchain. This is done by a method called a "proof of stake" consensus whereas a user's influence on the building and verifying of a transaction on the Algorand blockchain is directly proportional to the number of Algorand units one holds. Algorand, however, is a pure " proof of stake" protocol whereas all three of the previously-described functions are achievable in verifying blockchain transactions. (scalability, security and decentralization). That's what brings me to the main topic here: Algorand.Īlgorand is a blockchain protocol (The Algorand Protocol) that solves a problem referred to as the " blockchain trilemma." Blockchain trilemma can be easily understood as a scenario where there are three total goals and only two goals can be accomplished at the same time. It goes without saying that due diligence and proper vetting must be done. This means serious financial opportunity for all. The way I see it, each major player entering the Cryptocurrency space creates a "space race" to see who can achieve success first in this paradigm shift. Keep in mind that Visa and PayPal have already been in the crypto space and working with popular wallets like Coinbase and others. In further MasterCard news two days later, () we saw an announcement that Apple Pay users would be able to, effective immediately, add their BitPay prepaid MasterCards to their Apple Wallets for online and in-store payments.(4,5) I will come back to why this is important. However, MasterCard does specifically mention stablecoins ("cryptocurrencies that attempt to peg their market value to some external reference(2) - such as the USD" as the implementation they "expect to bring into network"(3). Two days later () we saw MasterCard announce that in 2021, they will "start supporting select cryptocurrencies directly on network." They do admit that this will be a process requiring regulation and research to ensure MasterCard's compliance measures are met. Just one week preceding this post () we saw Tesla add $1.5 Billion of Bitcoin to their balance sheet and announce that they will begin accepting bitcoin (and other cryptos) as payment.(1) There's no ignoring the rapid advancement and public acceptance of Decentralized Finance (DeFi) and Cryptocurrency. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |