When Bitcoin was unleashed on the world, it filled a specific need. But it wasn’t long before people realized the technology behind Bitcoin—the blockchain—could do much more than record monetary transactions. That realization has lately blossomed into a dazzling and often bewildering array of startup companies, initiatives, corporate alliances, and research projects. Billions of dollars will hinge on what they come up with. So you should understand how blockchains work—and what could happen if they don’t.
Should incentives in blockchain systems be a last resort? The developer of the Algorand proof-of-stake system thinks so, but other experts disagree.
“Can you say anything about incentives in Algorand?”
That question was directed to Silvio Micali, an MIT professor who had just delivered a keynote on his theoretical proof-of-stake (PoS) system at the Financial Cryptography and Data Security conference in Malta, yesterday. And the Turing-award winner’s answer set a few back on their heels.
“Incentives are the hardest thing to do,” Micali said.
In 30 years as a cryptographer, he had spent the last 10 working on just that issue.