[KeynoteSpeech] #SilvioMicali at #koreablockchainweek2019

all right Sybil take over thank you very much good morning ladies and gentlemen des don't trust me with a clicker because I usually my slides are zoom away so Algar and cor a new technology by the way him I really believe as I said also yesterday with a metallic that technology is a really important in blockchain in fact the blockchain has a constant challenge the tension between aspiration whatever we want to be envied technology that is going to bring us there and is very good to over always very high aspiration we are humans we need West but then we need technology to support it otherwise our aspirations are going to remain unrealized like a pie in the sky in speaking of technologies let's say we all love a decentralisation but how to get it you know what are they popular player approaches the first one you know hot off to mr. or mrs. Anna and Nakamoto is proof of work right there is a great middle but to be solved the first one solves it as a right to decide the block on the behalf of all of us what is the problem that it somehow brings in some undesired centralization right now the Bitcoin blockchain is controlled by three mining pool is vested decentralized not at all is actually quite decentralized so next idea is delegated to for stake and what does this mean it essentially means let's say sieve is twenty one individual over there they look honest let's hope they will remain honest let's give him the power to choose the next block on behalf of all of us because of choosing the next block is really they main power in in blockchain is this decentralized it doesn't even try to be decentralized you know it mentions blockchain but is actually centralized from the get-go in the above the boundary puff of steak or bounder proof of steak is not about twenty or two one - for some people he loves as many people as they want to put some money in the middle of a table where they can not when his hostage there and the people who pushed my money in the middle of a table are the ones who choose the next block on behalf of all of us in somehow their influence is proportional to the money by the put on the middle of a table now this sounds good but let's ask ourselves a very simple question how much of your disposable income can you afford to put hostage in the middle of a table and I guess what real answer is very little so in a system like this we run the risk to put a system in the hands of malicious people with a deeper pocket who put a disproportionate amount of money in the middle of a table for rizal reasons or controlling our blockchain so all together seems to me better miss old approaches aid very following a logical equation by all economy is secure if and only if a small part of the economy is honest and I think that is very wrong way to go because who wants to be ostrich to a small part to a few miners 221 delegates and so on so forth so what do we believe an alga Rand is instead is what we call a pure proof of stake what does it mean that the money is never put ostrich anywhere the money is where it should be in your wallet are ready to be spent or invested in the various opportunities the blockchain offers you and wherever the money is if you look up the majority of the money if the majority of the money wherever happens to be is announced and when the system work theorem another way to say it to subvert a pure proof of stake the owners of a majority of the money should collude with each other in order to bring down that very economy of which they own the majority of that is a bit less likely to arrive and how do we achieve this from a technological point of view essentially who is in charge of selecting the new block is a thousand randomly select a user a committee of a thousand condoms elected users and this block this randomly selected fasten users next block a different randomly selected fasten users and which the user do we do something very simple they propagate a simple short and easy to compute the message would say G Silvio thank you very much you know I understand the data the system security depends on visa one for some people committee who chooses them well certainly is not me because that would be very centralized also bad would be to have all the community in in the world discuss who should be the next one for some people committee because humanity is very hard to come to consensus on anything so in Algar and somehow we have a very unorthodox approach essentially with the committee members select themselves on the face of it this seems to be the worst idea maybe the second worst idea that that one can have because if I select myself and I'm bad of course I selected myself to be part of this committee and part of a second committee and the community after a vet so so but not so fast what does it mean that you self-select yourself means with each one of you runs a miniature individual lottery in the privacy of your own laptop to determine if you're a member - committee or not so if you remember your lottery gives you a winning ticket the proof mathematical proof of your path to this committee and what you do you propagate this winning ticket together with your opinion about the block listen to me because I have a winning ticket I'm part of this committee and if you don't win the lottery you can say whatever you want but nobody pays attention to what you say in the way the probability of winning is proportional somehow to the money that you have so Vettel prevent a civil attack where I generate a thousand versions of myself maybe one of them wins right so essentially probability of winning the Pens is the same whether I have a million algis eight million token in one wallet or over a million wallet we weren't talking each so is why similar tax do not work so now let me explain why this is super decentralized because I'm not talking with the same one for some people committee is in charge of producing the next block for the next month or week or day or hour right I just say best block one committee next block a different randomly selected committee so it is really truly decentralized and this is super scalable why how long does it take to do with some micro loader inside the each of our computer one microsecond click so can a thousand people after a microsecond or computation afford to send a single and short message throughout the network yeah that's why scales and so what is left is why is miss secure assume that I'm a very big scary guy with great powers I can cover up instantly any for some people I want all over the world who may want to cover up the one for some people committee you are in charge of a block so at a control over the block but I have a problem I don't know whom I should corrupt because of is father a cool people committee select themselves in the privacy of your computer so I don't know if you won or lost I don't know if I should cover up to you over the lady of my server guy in Paris or as a lady down the street so but after you propagate your winning ticket and your opinion about the block now I know whom I should go corrupt and I could hurt them right away but so what at this point is a bit late isn't it because whatever they committed to say as already said it and it's virally propagated all over the network and I do not have the power to put messages back in the bottle no more when the US government has less power to put back in the bottle a message propagated by WikiLeaks so my system is secure because beforehand I do not know whom I should corrupt an ex post is too late to corrupt them and if you think about it that's how algorithms solve a trial Emma you remember that remember that is very hard to be really decentralized secure and scalable that's how somehow we solve it but now I want to tell you that the vase is our consensus algorithm but we are al grant is focused on innovation and let me share a letter there are going to be a lot of other innovation vault which is an onboarding mechanism pick sandwiches in self-evaluating contraction atomic square swaps a post and trade sales math square contracts etc etc etc but I have only time to discuss only one of them atomic swaps okay so let me tell you what an atomic swap atomic square swap means first of all he means an atomic swap which is really atomic rather than an atomic swap which is a tone making name and when requires a sequence of steps which is not atomic at all and so these are essentially algorithms look free atomic swap so we have two users red then green they were two assets x and y they want to swap them let me tell you essentially what happens but you want to both you and wherever a guy wanted to sign a pair your signature alone doesn't cause us anything to up and you need two signatures that you want to swap whiskey's ownership of a thing but why can the blockchain recognize this because you supply also on a silver platter a proof that you own a asset up to the last block and so do you so if I am a committee but this is a block where it is a strange transaction I don't need to comb the blockchain to see once what I'm given on a silver platter of a proof of ownership up to the last block I accept it and I put it in the in the blockchain and at this point I can strip for the proof which are already verified and just put the best in the blockchain so what are the bandages of atomic square swaps first of all because of a swap happens by a single transaction and what does this mean then I cannot cheat you and you cannot cheat me because in a hash and time lock traditional sort we are going to have many baby steps because I'm going to do a baby step because I'm afraid is easy for me to assign you versatile but then I don't if you're going to reciprocate so I do a baby step you do a lap maybe step I give you must give you time to react if I'm dishonest it's a very long drawn-out process but if there is a single transaction even of a single contraction it enters the blockchain they were swapped assets if it does an end of a blockchain we retain the assets we can sell to somebody else so in mobile whether we implement this at a layer one we do not implement this as other projects do as a smart contract smart conscious are slow smart conscious are expensive and smart constants and times are prone to errors so we believe that the put the things in layer one is a way to have instant instantaneous process a single transactions and it's going to be very fast and very cheap and by the way is much easier to not to have errors if you don't buy some smart constants from far away in my opinion this is water trading ought to be and is in his core and this is going to be the next generating alba trading let me put in another way because we are going to be west November with atomic square swaps and atomic multi-party transfer are going to come to way to an alcoholic chain stay tuned and so what is an atomic multi-party transfer it's a similar idea but slightly different what do you want you want to execute this payment based payment the base payment is payment all together and these payments can be in red currency blue currency black currency you name it so that's what you need the in supply chain that's what you need in in somehow in all kinds of financial applications somebody abroad ASBO abroad the coffee from the Andes to the plane somebody else has brought in from the plane to my station somebody else's to them the harbor from the harbor which on our shipments and so forth you must pay them all that takes months even with modern wire transfer to settle all these things here with the you want always payments done simultaneously done okay what does it mean done in a single transaction without cheating because it's a single transaction in layer 1 so to be very fast and again without a smart contract that I can are so prone to error so in other you can start seeing the Algar and strategy is to prepare a very rich set of layer 1 strategy so that with high probability whatever you want to do is already available and you can use a ready-made template and if it's not available you can actually most probably compose a few 1 2 3 or visa ready-made templates and get what you want again very fast and very simply and for the rest wait for our smart square contracts and I'd like to ensure you something else which is an all Algar and approach to coaching did i say sub chain now who wants to be subservient to anybody did I say side the chain know who wants to be peripheral to anything I said coaching so what is a coaching a coaching runs his own consensus so they want to be in power is a national state he's a a consumes of very powerful bank so they don't care about you know and nor Bitcoin or any one of our a blockchain in that they want to be private it's not a permission or it's public blockchain all shield the transaction but we want to be transparent inside they want to have a blockchain inside to figure out really wants what among them all right so the advantages is scalability because you know no matter how fast a permissionless about a public blockchain is a very super duper network of Giga network of connections is going to be faster and then another advantage is a scalability because initially a co chain is going to have 12 members say 12 a big financial institution when we want to bring in some medium-sized banks maybe small-sized banks then credit unions then if they have a consensus of it does not - that only works for 12 people but not 12 thousand or a million later on we are going to get stuck a become a dinosaur in six months so to take say Algar and ORS or a channel like hangar on which his permission eyes and scales to billions of users you can always restricted to a few users and you know that you can actually lift the restriction and allow and permission more and more people as you want and then because Algar on the blockchain does not fork never does the blockchain in a coaching in and by the way they're going to evolve is a rich layer one functionality that they really need like Adamas warp atomic multi-party transfer and so on so forth the most of it I believe that and coaching wants the ability to interact with another coaching congratulations you did your own financial coaching and a nice private you can interactive secure it among each other well here is an elf care coaching but I represent some United States twenty percent of a economy doesn't vary financial coaching won't interact with the health care coaching of course he should because it's twenty percent of economy but how here is our permission permission lists a common blockchain works and that is my last a technical slide so let's assume there is a blue coat chain which is permission private when there is a red coat chain also permission also private and in between there is way permission less public blockchain of algorithm so as a blue player in the blue chain I have an asset a triangle and you have in the red blockchain another asset a circle somehow we must know about each other because I'm private or private but somehow let's assume well we discovered you have a circle I have a triangle so I love your circle also beautiful triangle let's swap it how the hell can you do that so you do it like this first of all if I'm the blue train I transfer my public key but that the blue train knows ions of a triangle I assign mystery under to Algar and to a string algorithm and this transaction is approved because I'm the owner of a of a triangle and is actually represented in our block which you can see now the triangle is becoming black and so what I do next is going to do a proof to the algorithm that now my public key owns of a triangle the black triangle and therefore this is going to be accepted by by the Al Gore and blockchain why do I need the proof because of the blue chain is private if I tell you dear Al Gore on the main chain high honor triangle could you give me the triangle in your chain says how do I know but that's why I give the proof right and the proof doesn't mean that they al grant us to monitor all the blocks and the content of the blocks of the blue chain it's a private chain but the header rows of a blocks are easy to disentangle and without revealing an information and so on you need that my devoting to Al Gore and my triangle is actually one transaction in this block and that's all we do best transaction and the header of the block we best well gone says okay now I put in my records beta you own it and why can I put you in my in my record because we are a permissionless block chain so the blue public key that owns of a triangle in the Blue Train does not exist in our grant remembering a permission on its chain any key is welcome that's why I can always transfer assets to real grant blockchain and after we do it in 4.5 seconds we can swap their the assets in their grant blockchain and then guess what when I upload them who where they come back in at the end of the day I have what I wanted but assets are swapped and now I can trade the blue circle inside the blue chain and nobody knows except the blue colleagues of mine who will own the chain so how the co chain works and I believe it is a good structure and in fact Olivie all inter operated ugly we're after so let me conclude that my take is vet we all have both a public and a private persona we all have a yearning for transparency and Trust we all have the goal of the centralization and we all waive the need to interact with each other but without the right technology we have nothing the block chains aspirations will be realized by technology and only true technology will let us be who we really want to be so join us build with us let's build together the blockchain that we deserve in the blockchain worth of our efforts in an hour love thank you [Applause] [Music]