What is Algorand (ALGO)?
Algorand——A Permissionless Pure Proof-Of-Stake (PoS) Blockchain
- Algorand is an open-source, permissionless, Pure Proof-of-Stake (PPoS) blockchain protocol for “the next generation of financial products”. As such, Algorand ensures "full participation, protection and speed within a truly decentralized network".
- Algorand is built by a team with deep roots in academic theory and science, led by Turing award winner Silvio Micali, who has dedicated his career to pioneering research in the field of cryptography.
- Algorand originally designed to solve the contradiction between low Latency and high Confidence in decentralized networks, so Algorand’s value proposition is centered around two elements: decentralization and permissionless.
- ALGO is the native asset of the Algorand Protocol and serves as the medium of exchange and store of value. ALGO must further be staked by network validators.
Algorand Key Metrics
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1. What is Algorand?
The word Algorand is composed of two words “algorithm” and “random”, which represents a consensus protocol that combines cryptography and Verfiable Random Function. According to the official description, Algorand is a public chain project that adopts permissionless pure PoS consensus. Combined with the improved Byzantine consensus protocol, it can achieve fast transaction confirmation with almost no forks, and the number of users can be unlimitedly expanded without affecting transaction confirmation speed. At the same time, Algorand said it broke through the "Public Chain Impossible Triangle" of "scalability, security, and decentralization".
- Scalability: Algorand randomly selects the producer and verifier of a block through a verifiable random function (VRF). Once it is known that it is selected, the producer or verifier only needs to broadcast a short message to prove their identity. The messages that need to be exchanged in the network every time a new block is generated will not change as the number of users increases. Therefore, even if the number of users increases, the system can still maintain a high TPS (transactions per second). Algorand's TPS is 125 times that of Bitcoin.
- Security: Because the above-mentioned VRF is used to randomly select producers and verifiers, and the selection process is completely completed by the nodes independently, the attacker in the Algorand network cannot know the next block producer and verifier in advance. The attack cannot be completed. Specifically, the identities of producers and verifiers will only be disclosed when they are sure that they are selected and broadcast the corresponding proof information. At this time, even if the attacker immediately adopts various attack methods, he cannot prevent the correctness of the new block. The spread of news on the Internet.
- Decentralization: Each round of block producers and validators in Algorand are randomly selected, and there is no threshold for joining the network, so it is completely decentralized.
ALGO is the currency of the Algorand Protocol and serves as the medium of exchange and store of value. The currency serves as the representation of Proof of Stake that facilitates consensus to validate and confirm new transactions.
2. Who created Algorand?
Algorand is built by a team with deep roots in academic theory and science, led by Turing award winner Silvio Micali who has dedicated his career to pioneering research in the field of cryptography. Silvio Micali has been teaching in the Department of Electrical Engineering and Computer Science at MIT since 1983. Silvio's research specializes in cryptography, zero-knowledge, pseudo-random generation, security protocols and mechanism design. In 2017, Silvio founded Algorand, a fully decentralized, secure and scalable blockchain public chain that provides a common platform for products and services in a decentralized economy.
In Algorand, Silvio is fully involved in all research, including theory, security and crypto financing. Silvio is the recipient of the Turing Award (Computer Science), the Goedel Award (Theoretical Computer Science) and the RSA Award (Cryptography). Of course, the success of Algorand is the result of teamwork. Steve is the CEO of Algorand and is responsible for the overall business vision and strategy. And Sean is the chief operating officer of Algorand, responsible for market execution and operations, including product management, engineering, marketing and global community development. More team members' introductions: Project Team Introduction.
3. What makes Algorand unique?
The core problem that Algorand originally designed to solve is: the contradiction between low Latency and high Confidence in decentralized networks. Among them, Latency refers to the time required from initiating a transaction to confirming the transaction; Confidence refers to the probability that the issued transaction will not be changed again. So Algorand’s value proposition is centered around two elements:
- Decentralization: the Algorand blockchain is entirely decentralized, and there is no powerful central authority or single point of control. A unique committee of users is randomly and secretly selected to approve every block. Nodes are run by entities representing diverse backgrounds across many different countries.
- Permissionless: the network is public and open to all. Users do not need the approval of a trusted authority to use the Algorand blockchain. There is a single class of users and no gatekeepers. Every participant can read every block and have the opportunity to write a transaction in a future block. The Algorand platform also requires minimal processing power and modest IT resources to join. All online users who possess algos are automatically eligible to participate in block consensus.
Algorand consensus protocol developed around these two elements has achieved the following unique features:
- Pure Proof-of-Stake: Algorand uses a Pure Proof-of-Stake (PPoS) consensus protocol built on Byzantine agreement whereby the users' influence on the choice of a new block is proportional to their stake in the system (number of Algos).
- Immediate transaction finality: Algorand blockchain does not fork as only one block can have the required threshold of signatures in order to be certified in a given round.
- Self-selection: all users are randomly, secretly, and continuously selected to participate in the Algorand consensus protocol - neither a few delegated users nor a fixed committee is responsible for proposing blocks in Algorand.
- User replaceability: participants change every round of block selection in order to protect the network against attackers - for each round, every set of participants is random and independent of earlier participants.
Algorand has achieved high scalability, better security, and a certain degree of decentralization through innovative consensus protocol design, and all conclusions have relatively strict mathematical proofs, which is a relatively innovative and rigorous consensus mechanism.