Algorand: An Introduction

When we talk about blockchain, we talk about three primary problems they resolve — security, decentralization and scalability. These are generally associated with the following questions:

  • Do we have a single point of failure in the system?
  • Is the network secure enough to guard against all hacker attacks?
  • Can it be scaled beyond a threshold to be a truly global ecosystem?

Most blockchains strive to solve one or at max two problems of the blockchain trilemma. Then, I came across Algorand, a platform founded on principles of transparency, inclusivity, and collaboration and maintained by an enthusiastic and motivated community with a shared vision of a decentralized, borderless future. With features such as No forking, No centralization, No delays, Low costs and High reliability — Algorand has an answer to all the issues promised to be addressed by blockchain.

Features of Algorand

Open-source: Everything from tools for key generation, conducting auctions, testing, crypto standards, crypto libraries, node repository, etc. is open sourced and publicly available for anyone to audit, use, and build upon.

Low participation costs: With the Algorand platform requiring minimal processing power and modest IT resources to join, all online users who possess algos are automatically eligible to participate in block consensus.

Immediate transaction finality: The Algorand blockchain does not fork. Once a block appears, users can be rest assured on the finality of the transactions it contains immediately, as they can be confident that the block will forever be part of the chain. Even if the Internet is split into multiple pools of users, only one safe and consistent Algorand chain will exist.

Scalability: Algorand’s Byzantine Agreement protocol is highly efficient. It reaches consensus on a new block as fast as the block can be propagated throughout the network. The Algorand protocol scales to numerous users and sustains a high transaction rate-without incurring significant cost to participating users.

Cryptographic Self-Selection Sortition: Neither a few delegated users nor a fixed committee is responsible for proposing blocks in Algorand. Instead, all users are randomly, secretly, and continuously selected to participate in the Algorand consensus protocol. Every block in Algorand reveals a new unpredictable selection seed that determines which users participate in the next round of block selection.

User Replaceability: In the Algorand protocol, participants change every round of block selection in order to protect the network against attackers. Before they participate, no one knows who the users are, and once they participate, their message is already propagating through the network so it is too late for an attacker to benefit from attacking them. For each round, every set of participants is random and independent of earlier participants.

The consensus algorithm: PURE PROOF-OF-STAKE

By using a pure proof-of-stake (PPoS) consensus protocol built on Byzantine agreement, the Algorand ecosystem can achieve consensus without a central authority and tolerate malicious users as long as a supermajority of the stake is in non-malicious hands. Algorand’s PPoS approach ties the security of the whole economy to the honesty of the majority of the economy, rather than to that of a small subset of the economy. The users’ influence on the choice of a new block is proportional to their stake in the system. Users are randomly and secretly selected to both propose blocks and vote on block proposals. All online users have the chance to be selected to propose and to vote.

PPoS vs. Proof-of-Work

Proof-of-work (PoW) is an approach in which users race to solve very complex cryptographic puzzles, also known as mining. This is an approach adopted by numerous blockchains. Yet, it is not without shortcomings such as:

  • High expenses and wastefulness of resources deployed for mining which acts more as a barrier than an enabler for participation
  • Centralization due to the dependency on the miners to approve the transactions upon the miners)
  • Delays in propagating blocks to the network
  • Multiple validators solving the same problem simultaneously leading to forking and uncertainty of transaction finality

In contrast, with PPoS, the Algorand blockchain:

  • Requires low computational and financial expenses to be set up
  • Is decentralized with all online nodes participating in the validation of the blocks
  • Has no delays in validation and the transactions once approved are final

PPoS vs. Delegated Proof-of-Stake

In Delegated proof-of-stake (DPoS) approach a fixed number of elected entities, delegates, are selected to create blocks in a round-robin order. Delegates are voted into power by the users of the network, who each get a number of votes proportional to the number of tokens they own on the network. As a result of the limited number of block producers, DPoS is able to handle transaction throughput that is multiple orders of magnitude greater than PoW. Since delegates are known, even if they were kept in power for a short amount of time, a determined adversary could bring down all the delegates by a fast denial of service (DoS) attack.

In contrast, each PPoS user may propose and vote on blocks with a probability directly proportional to their respective stake with there being no special group of users for an attacker to target.

In conclusion, with PPoS

  • No computation resources wasted solving cryptographic puzzles
  • Only a small subset of users selected to participate each time a new block is generated
  • Number of selected users doesn’t change as the total number of network users increases
  • Users do not need to communicate with others to determine whether they’re selected
  • Total communication cost of the network scales linearly
  • Blocks typically finalize within seconds

The future

With an inclusive approach to partner with businesses and individuals seeking the benefits of blockchain technology as well as a strong focus on building a global community, I believe Algorand is on the track to be a leader among existing blockchains.

Originally published at



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