“Regulations are key to avoiding platform scams and abuses,” says Avalanche CEO

The world crypto It had its last major media spotlight during the pandemic, with the skyrocketing price of Bitcoin and the desperation of many to get video cards to mine (create) digital currencies. However, now that artificial intelligence co-opted technological discourse around the world, from Silicon Valley To any corner of the world, there are certain aspects of the blockchain world that continue to advance towards decentralized technologies that improve with each update. Avalanche one of the most important blockchains in the world, is one of them.

“As we know, blockchain systems They consist of a large set of computers that work together to create this kind of distributed ledger. That keeps track of who has what assets and what transfers are going to be made. And doing that is actually a very difficult process because some of these participating computers could be trying to cheat the system, they could be trying to change the registry,” he recalls in dialogue with this medium. Emir Gün Sirer CEO and co-founder of Ava Labs, at the Konex Cultural Center a week ago.

The blockchain company held a Latin American summit, the Avalanche Summit Latam, one of the most important Web3 events of the year, in which they presented Avalanche9000an update of its blockchain with news on different fronts, from the financial world to the gamingg oing through cybersecurity. Argentina is always a crypto epicenter: with an intense and very active community, it is one of the countries that shows the most enthusiasm for these technologies.

Gun Sirer is a Turkish computer scientist with extensive experience in the world of transaction cybersecurity, and is aware that one of the great challenges of decentralized technologies has to do with the attacks they can receivein addition to the scams that take advantage of what was one of the last crypto booms in the world.

A professor at Cornell University (New York), he has made significant contributions to the world of blockchain and has a perspective that challenges some of the myths that are repeated in the crypto environment. “We need tailored regulation that allows us to do what we know,” he says, among other ideas. What is the crypto community discussing in 2024? Why have so many cryptocurrency-related scams proliferated and how can this scenario be counteracted? What advances are being seen with artificial intelligence? Here, the interview with Clarion.

─Blockchains adhere to different protocols. What is Avalanche’s like and how is it different from Bitcoin’s, for example?

─Bitcoin’s approach to maintaining the blockchain requires the constant use of electricity to validate transactions, in part to make it more difficult for attackers to make fraudulent transactions. The Avalanche Protocol is quite distinctbecause the way the blockchain is maintained means that one computer talks to a small number of computers, which in turn talk to another slightly larger set of machines that talk to a larger set, so they are sure that everyone agrees without necessarily having to talk to everyone separately and individually. This makes it faster and more scalable, requiring less communication in general. That’s one of the reasons why Avalanche is much faster and decentralized.

─In 2020-2022 we had a blockchain, bitcoin and NFT boom. Where do we stand today, once the fashion has passed?

─As with any new technology, over time the people’s interests are changing. When the Internet was booming, it started with email, then with websites, and then came more complex things like online shopping. Today there are already a lot of different types of services online. The same thing happens with the blockchain, Bitcoin and NFTs, also the smart contracts. They appeared little by little and now, for example, the world of gaming is exploiting these technologies, although it is not so easy to connect the game to a blockchain, something that has taken many years of development. I believe that fashions are part of the process of deploying a technology, functions are added, some prosper, others do not.

─Blockchain is presented as a secure technology. Why isn’t it used more?

─Well, I think it’s used quite a bit, huh. A huge number of people in, especially in Argentina for example, are familiar with stablecoins, cryptocurrencies and more. If we look at the growth curves we are where we were with the internet in 1996, in terms of users using blockchains. Just five years ago, when I was talking to people on Wall Street, I had to describe a lot of basic concepts like cryptocurrencies. Today, the entire financial world understands what these things are about.

─What shared responsibility does a blockchain have when there are cases of abuse such as FTX or other crypto scams?

─Let’s start by saying that we are scientists, and as such, we have to start by observing what is happening. It is true that cryptocurrencies have attracted many frauds and scams, because you have great technology that can attract malicious actors. Innovations always bring threats, as we saw with FTX. Regulation plays a key role in preventing scams, although a good part of the crypto world wants to do without regulations. I don’t think like that: I think smart regulation aimed at cryptocurrencies is what will really allow this space to explode safely. This is not the case in the US, but we have seen other jurisdictions go in this direction.: Financial centers like Singapore, London, Switzerland, Dubai are all working towards sensible regulation for the crypto world and I expect South America to play an important role as well.

─But doesn’t the crypto world support deregulation?

─That is false. I mean, it’s true that the community at large says they don’t want regulation and, truth be told, they have a small point in pointing out that regulation aimed at traditional finance doesn’t match crypto at all: You do not have to have a custodian, because the custody requirements are made in an encrypted code. In that sense they are right, it has to be different. But we need tailored regulation that allows us to do what we know.

─So from your perspective, that of the Avalanche, do you have another line of thought?

─The Avalanche community in general It’s quite different of the first wave of crypto people. Those people normally worked with Bitcoin, and they wanted Bitcoin to be supreme and all local currencies to disappear. They would say, for example, that El Salvador should only use Bitcoin, without local currencies. That the United States should abolish the dollar and adopt Bitcoin and so on. I don’t believe that. I think what we need to do, and what Avalanche is trying to do, is build economies that integrate well into existing systems.

─I don’t want Argentina to change what it does, I want it to integrate what it does with the Avalanche system. We are not a single blockchain, Bitcoin is a single chain for everyone, while Avalanche allows the creation of multiple separate blockchains with different sets of rules, so we can have one for Argentina, for example, with sets of rules that allow us to accommodate legal, regional, etc. requirements. Therefore, my narrative and my thinking is not to abolish the world and then recreate it with crypto at the top. It’s more about accepting the world as it is and allowing the crypto ecosystem to enter there. It’s a huge philosophical difference.

─A virtue of the blockchain is that once a block has been written, it cannot be deleted. But this can also be a problem: if an attacker uploads malware or infects a file, it can leave it there forever. Is there a possibility of doing what is called rollback in Avalanche?

─In general, we try to design systems where a block that has been committed cannot be undone, so what we would do in these cases is create some kind of chain where there is a subsequent block that has the ability to modify and say “What happened in the past should not be taken into account.” And issuing such a block would normally require a large majority of participants to sign it. It happened, in fact, that once the change was published, the other block became invisible to any user. But everything that happens is immutable, any writing in Avalanche has no rollback.

─AI is in everything today. During the presentation in Buenos Aires they did not emphasize this point as much. Are you working on something along these lines?

─Exactly one year ago, I talked about my favorite project for Avalanche: it is called “Coin Operated Agents”, which is a blockchain powered by AI agents. Let’s imagine a blockchain where transactions are normally made with encryption and where instead of using a complex system you can say “well, I hereby give this other person 500 pesos or whatever.” As it was done before. With this system with AI I intend to put the programming of smart contracts (smart contracts) available to everyone.

─Changing the transaction format to be plain text, so instead of issuing bytecode and encrypted signed programs and certificates, what we end up implementing as multiple operations is plain text. That is to say: you write in Spanish “I hereby give this person 50 pesos”, and behind it, instead of the interpretation of a computer program, what you have is an AI executing those transactions, just as a lawyer would execute your will, or the way a trustee would execute the instructions of the trust.

─Any specific example?

─Yes, you say “I want to give 500 pesos to Juan, only assuming he can raise the thousand dollars he needs to make his investment, otherwise, I want my money back. And you write it in Spanish, it doesn’t matter that I speak English. AI understands, merges all that and executes the smart contract. Of course, this is a prototype, not yet ready to use

─In the sense that artificial intelligence also makes mistakes and “hallucinates”?

─Right, he can take your money and run away, basically. So it’s not ready for mass audiences, but we’re working on it.

─Artificial intelligence has also complicated the scam scenario: it is also used to generate very well-done phishing emails and different types of deception. How do you think this can be improved to protect the consumer?

─I think one of the key issues we need has to do with better platforms and better infrastructure. The operating systems used on our laptops and phones are still far from being secure enough for the high-value assets we may have. Isolation between different applications is not completely achieved– A malicious app that you install to use your flashlight on your phone shouldn’t be able to steal your money and yet it happens. It is essential isolate applications and there they have to improve the operating systems.

─And what about social engineering deceptions?

─When it comes to cryptoassets, we can program functions to reverse transactions. Cold wallets, that is, wallets that are used more for savings than current expenses, should have this possibility of delaying a transaction to ensure that it is correct. We need to think about more ideas like these: at the end of the day, we have to have better education for users, who are the ones who have to learn not to click on strange things to exercise good online hygiene, because that’s where everything starts. It’s a game of cat and mouse, and, at least for now, the one who wins is the cat.: users must be made stronger.