Host: “First of all, Professor Micali, congratulations on behalf of ISSNAF for the assignment of the Life Time Achievement Award which is a well-deserved recognition of your constant activity in the fields of cryptography and computer science. As you well know, ISSNAF, the Foundation that connects Italian scientists and scholars who live permanently in North America, has always set among its main objectives the creation of a bridge between Italy and North America in the field of scientific research. From this point of view, what effect does receiving this award have on you? Do you acknowledge that you have a part to play in the construction of this bridge?”

Guest: “I am honored to receive the Life Time Achievement Award both as an Italian and as a North American. I am convinced that every award entails not only an honor, but also a responsibility.

Among the positive aspects of receiving an award, one is the increase of the winner’s visibility. So on the one hand it offers me an emotional boost to work better and to commit myself more, on the other it gives me the opportunity to make myself better recognized both in the Italian community and in the North American one. Since we should all feel committed to building bridges in society, I hope that this welcome recognition will allow me to play a more incisive role as a link between the two communities, ultimately helping to make them more cohesive.”

Host: “Let's enter the specific field of your competences. You founded Algorand which, to use your own words, is a completely decentralized, secure and scalable blockchain. Could you for our ISSNAF members and sympathizers summarize the characteristics of Algorand and how it differs from other cryptocurrency systems such as Ethereum and Bitcoin?”

Guest: “The Blockchain at the definitional level is a database open to all, in which everyone can record a statement, but which cannot be altered either in the content or in the order of the transaction blocks. A non-cryptologist may think that the greatest difficulty, given that it is a distributed register where everyone can read and write, consists in the security that no one intervenes to alter. Indeed this is an easily overcome problem. The main problem, rather, is identifying the person responsible for adding a block to the chain. In fact this data base is enriched from time to time by new transactions organized in blocks. But: who should the power of selecting

and adding the next block of transactions? Determining which transactions should be visible by the entire world and which should not is a tremendous power.

Here the various chains differ. In the Bitcoin chain and in others that follow it, the idea of Mr. or Mrs. Satoshi Nakamoto was to make a computational race by asking an extremely difficult cryptographic question. The first who solves it has the power over the blockchain in hand. The idea was excellent starting from the fact that those who solve the questions are different people from time to time, thus achieving a fair result. In reality this mechanism turned out to be a contest for power. There are those who have become very equipped for this race, buying thousands of very expensive super computers, specialized only to solve the cryptographic riddle. Among other things, these machines consume a tremendous amount of electricity, and additional electricity is necessary to refrigerate the servers involved in solving the riddle. In short, the idea to participate in the consensus that seemed brilliant hid an intrinsic weakness given by the cost factor which, becoming higher and higher, allows only a few to access. From a good start, a new idea, which traced a path to get to decentralization, concretely became an impediment to access for private people who do not have financial means to enter the field. Apart from this, the excessive consumption of electricity has become a factor with a strong negative impact on the environment.

The second idea is to entrust only a group of “delegates” with the decision on the blocks to add to the chain. Such a group, in what is technically called Delegated Proof of Stake, essentially is a private club. If Bitcoin started out as a decentralized system, at least in the beginning, blockchains based on Delegated Proof of Stake are centralized by design. And they will remain so!

Algorand proposes a different system. From 10 billion tokens of consent, 1000 are chosen at random. Their owners are part of a temporary committee for a single block and agree on the block. At the next block a new random draw occurs with a new committee and a new block. This is a very sophisticated sort of draw consisting of a cryptographic individual lottery. Fair by definition since no one, not even a world power armed with millions of supercomputers, could improve the odds of winning the lottery. It is as I have a lever in the slot machine that I can only lower once. If I lose it stops there, if I win I get a “winning ticket”, mathematical proof that I have been chosen at random to be part of the temporary committee and this proof I send it on the net with my opinion on the block, up or down. The system therefore turns out to be decentralized because out of 10 billion tokens every token has the equal possibility of being chosen, scalable because to lower the lever it takes only one millionth of a second, so everyone can

participate in the draw. This remain true even if a participants owns a single token or billions of them. Even if there were 100 million participants, it would only take 100 seconds of computation. Furthermore, the system turns out to be very safe. In fact, even if there were a powerful villain who wants to bribe 1000 people among the members of the committee, he cannot do it because the secret drawing prevents him from knowing who they are and therefore would not know who to turn to. When the winners put their winning ticket online, it is true that they come to light, but their opinion on the block is already spreading virally. It therefore becomes impossible to suck up all these messages now entered into the network. In other words, at the beginning you don't know who to bribe and in a second phase it becomes too late to do so.

One of the reasons why I started working on blockchain was precisely what the co-founder of Ethereum, Vitalik Buterin, stated in particular. In his opinion it was impossible for anyone to make the three elements coexist in the same blockchain: decentralization, scalability and security. I believe that in human life there are impossible things and those serve to give us depth and meaning, but often we erroneously believe that something is impossible. And so I concentrated on this point and ended up solving the problem. I therefore hope that this approach to consensus, typical of Algorand, can be used in the future as a useful tool in other systems as well.

A further difference of Algorand compared to other blockchains is given by consumption. That of Bitcoin or Ethereum is comparable to the energy of a small country, while for Algorand, putting together the entire world apparatus that participates in the consensus, it is comparable to the consumption of 10 houses. It is therefore much more sustainable from an environmental point of view.

The chain also has no forks. In other blockchains the chain “forks”, that is, it may temporarily split in 2 branches. You know one of the two will die, but you don't know which one is destined to survive. In this case a sort of suspense is created as there is no univocal truth. On the contrary, Algorand’s chain does not fork. Thus, it can offer you that certainty that is necessary in the world of transactions.

Another point of pride is that Algorand has always created blocks in 4.4 seconds without ever experiencing any interruptions. Never has a block been lost. Other chains experience regular interruptions and need to be reactivated. It is essential that the chain does not have to stop. If this does not have a speculative purpose, but is intended for financial or health care services or in any case for vital services, transactions cannot be stopped. The technology must work regularly.

In the end another advantage is given by smart contracts that execute automatically, if the right conditions arise. Not all contracts must be executed automatically, but for some it is good that they are. There are cases where a certain payment results in a unilateral transaction such as a donation to a charitable association or a transfer to the family in the country of origin by a foreign worker. On the other hand, most payments presuppose an exchange, a do ut des, but at that point the problem arises of who gives his own thing first! This is why there are credit cards or brokers who can act as mediators, but in this case costs go up and transactions slow down. In Algorand the exchange becomes atomic in the Greek etymological sense of indivisible: I pay the moment I receive. Payment is like having a return ticket, but in the traditional form it happens as if the outward journey was by plane and the return by carriage. With Algorand without a mediator, it takes 4.4 seconds at a cost of two tenths of a cent. In other blockchains, exchanges take place, but they are very slow, expensive and fragile. 80 percent of the need of smart contracts is satisfied in Algorand in such efficient and secure way, encouraging direct exchange between people without depending on the mediator. It is an approach that turns out to be democratic. I am not saying that I want to eliminate brokers when they add value to the transaction. But when the mediator's only value is to make the transaction itself possible, at this point it is better to replace it with a secure technology.

hope this will serve a democratization of finance as well as decentralization, taking power away from an elite as it puts the use of sophisticated tools within everyone's reach.

In the Bitcoin blockchain, in fact, the only exchangeable good is the currency itself, while with Algorand not only monetary exchanges are made but also other types of transactions such as bonds.”

Host: “In March 2021 Algorand signed an agreement with the SIAE (Italian Society for Authors and Publishers) which protects the copyrights of creatives. What is the main goal you want to achieve with this agreement?”

Guest: “SIAE has issued 4.5 million NFTs (not fungible tokens) on Algorand, each of which represents the digital rights of musical works. They represent 100,000 artists who have generated these 4.5 million works. When I want to buy the rights to a piece of music or a song, it is difficult to understand at present who the real owner is, based on the paper where previously changes of ownership may not appear. On the blockchain I see them all registered and therefore I am sure I know who is the owner. The next step of SIAE is to manage these flows on chain, in a transparent way. If one wants

to understand, for example, why he never received a form of remuneration for one of his pieces, the management on chain allows him to realize how many times it has been used.

If I want to play a song and it is recorded in the blockchain, I can remunerate all those involved in the creation and performance of the piece (singer, orchestra, author of the text, etc.) in the order of a few cents. When dividends are so cheap, it becomes fair distribution. We are very happy with the decision of SIAE. Historically this company was born with Puccini and Verdi to try to defend the artists from those who then represented the great music industry. At that time the artists were left with the crumbs of their earnings and therefore they were feeling the need to associate in order to better defend themselves. By being on-chain the system gains a great deal of transparency, the possession of the various pieces can be better managed.

The blockchain becomes a prime example of how to allow authors to be masters of their own information, maintaining their rights and not giving them to others to manage them, as happens in other platforms.

Algorand's efficiency in this specific case was confirmed by the fact that 4.5 million certificates were issued in just one morning. This issuance, in another blockchain could have cost up to $ 100 for each, and one wonders in that case where half a billion dollars could have been found to represent 100,000 Italian artists. The whole cost amounted to a few thousand dollars. Algorand therefore proved to time efficient, only half a morning, while being economically efficient.”

Host: “Money in general often ends up acquiring its own socio-cultural identity. Could digital currency in the future represent not only an economic value, but also an identity value, helping to form an open community that recognizes itself by crossing state borders?”

Guest: “It is a very beautiful question, but one that is very difficult to answer. In fact, everything concerning our identity is very complex since there are numerous factors that contribute to self-definition. Undoubtedly, money is one of many. However, we must remember that in the past there has not always been identification between the national state and the currency, because different types of coins circulated in the same state. However, common money can contribute to a form of identity that smooths out possible disputes between individuals. It always seems to me an excellent thing if a state within its borders aims towards internal social cohesion as long as it does not lead to external aggression.

Trade has in fact always been international. We need an international exchange tool. The currency of an economically dominant country has very often served as a medium of international exchange: it now happens with the dollar, it happened first with the pound in the British Empire and even earlier with the pesos in the Spanish Empire. A truly decentralized currency, not issued by any single national state, in which everyone can participate through a consensus protocol, where we all know what has been printed and who owns what, can help create an aggregating structure oriented towards international cooperation. I don't know if that will happen, but it could potentially have a positive development with many benefits.”

Host: “Through the boom of cryptocurrencies that have no material incarnation, one could hypothesize the development of a universe parallel to the physical one. What do you think about?”

Guest: “Universes parallel to the physical ones already exist. Referring to money, in my opinion, this has always been, in a certain sense, immaterial. Let's take the example that I ask a bricklayer to build a perimeter wall and decide to pay for it in …sheep. He accepts only if he can exchange them for other things. Gold is also visible, it has a weight and various characteristics, but to be accepted as a payment you need a trust that in turn the metal will be accepted by others. At a fundamental level even money, even when the substrate is paper, always presupposes a social construct in which we believe. With the possible introduction of the digital dollar or the digital euro into the market, there would always be the same mechanism and therefore I do not see major differences in this sense between traditional and digital money.”

Host: “As an Italian who graduated in Rome and then moved to the United States where he made a splendid career, receiving the prestigious Turing Award, among other things, do you define yourself as a brain on the run?

In your opinion, is there a way that allows Italy to see not only the negative aspects of this phenomenon, but also to seize opportunities?”

Guest: “But are we talking about brain drain or the export of Italian spirit? We Italians living in North America represent what Italy can do on an artistic, commercial, scientific level, etc. By letting ourselves be appreciated, we actually increase the value of Italians, of made in Italy in a broad sense. Who benefits from it is the source that is Italy!

What I particularly love about our country is our traditional lack of xenophobia which instead begins to color the international panorama.

While some hints of xenophobia can also be found in Italy, it is much easier to find xenophilia to the point of exaggerating since we see the brains on the run and not those at home. A striking example is given to us in this exceptional year for Italy, by the scientist Giorgio Parisi who received the Nobel Prize in physics. Even among the artists, just to give a few examples in the world of cinema, we cannot fail to mention Giuseppe Tornatore or Paolo Sorrentino or Roberto Benigni, all directors awarded with Oscars.

It is as if we do not count them, because we take them for granted. In the Italian language there is a significant motto: "The tongue strikes where the tooth hurts". In fact, the tongue beats on all teeth. We focus our attention on the aching one, but not on all the other healthy ones and therefore the Italian genius as a whole escapes us. Genial Italians exist everywhere. We only look at those outside the border.

Then there is another aspect in which I personally recognize myself. Certain categories of people have to go outside to be more creative. Starting from scratch without constraints makes us feel freer to express ourselves. I left Italy, where I had received my education. Undoubtedly I am proud of it, starting with that of Italian secondary schools which are formidable training centers. But for me it was vital in my work not to have mental structures. I always started with areas, such as cryptography, which had never been academic disciplines. For me it was and remains important to start with the canvas on which you are free to paint whatever you want and where the frame should only be placed later.

Ultimately, everyone gives their own contribution, creating a symbiosis that mutually benefits both the country you come from and the one you are in. In my opinion, the Italian protagonists, who are abroad, constitute a significant driving force for the growth of cultural heritage in general. Therefore, I can only judge this phenomenon very positively both for the world and specifically for Italy itself.”