ALGORAND (ALGO)

What is Algorand? 

Algorand is a blockchain platform that is aiming to create a borderless economy through its decentralized, permissionless public blockchain.

In other words, Algorand wants a blockchain ecosystem that allows everyone to participate and succeed. The platform is being built with the core principles of simplicity, instant transactions, direct usage and adoption, and performance.

Algorand is also taking on one of the biggest challenges in blockchain technology. That is how to build a platform that is both fast and scalable, without sacrificing decentralization.

Characteristic

Algorand aims to solve the three main problems currently facing blockchains, also known as the  trilemma of blockchain: security, scalability, and decentralization.

In Algorand’s consensus algorithm, called Pure PoS, the network ties its security to the honesty of the majority. Essentially, in comparison to Delegated Proof-of-Stake, Liquid Proof-of-Stake or Bonded Proof-of-Stake, there is no sanction mechanism, also known as slashing, in case an actor misbehaves — think about liveness faults such as low uptime, or security faults such as trying to validate twice the same block. Rather than punishing bad actors, Algorand prefers to make cheating by a minority of the money impossible and cheating by the majority stupid. As long as 2/3 of the majority is honest, the protocol will work just fine.

In Algorand, blocks are constructed into 2 phases through lotteries known as “cryptographic sortition” enabling fast finality, long gone would be the days where one would have to wait for 30+ confirmations and eventually several hours to ensure that a transaction really happened.

  • Proposal phase: a single token is randomly selected, and its owner proposes the next blocks. However, this proposer is only known to the whole network during the propagation phase: it is already too late to interfere. In Pure PoS, every token has the same power in being selected.
  • Voting round: a committee of owners of 1,000 random tokens is selected, approving the block proposed by the first user. As opposed to the fixed committee system in many Proof-of-Work or Proof-of-Stake blockchains, this random selection of the committee members makes the protocol extremely secure against adversary attacks: they simply don’t know who to target.

Protocol Participation

In Algorand, every online user who possesses algos can participate in the consensus protocol. To reduce exposure, users do not use their spending keys (i.e., the keys they use to spend stake) for consensus. Instead, a user who wishes to participate in the protocol generates and registers a participation key. With this key, an account can participate in proposing and voting on blocks. Using participation keys ensures that a user’s algos are secure even if their participating node is compromised.

Self-Selection via Verifiable Random Function

Every block in Algorand reveals a new random and unpredictable selection seed that determines which users should participate in the next round of the consensus protocol. When a new block gets committed to the blockchain, everyone becomes aware of this seed (and everyone sees the same seed). A user secretly checks whether they were selected to participate by evaluating a Verifiable Random Function (VRF) with their secret participation key and the selection seed. This computation is minimal, so even a limited device such as a Raspberry Pi can do it. The VRF computation produces a pseudorandom output with a cryptographic proof that anyone can use to verify the result. By sending this proof, a user can prove to anyone that they were indeed selected to participate.

Pure Proof-of-Stake

What makes this protocol pure proof-of-stake is the fact that users are chosen to participate in the protocol based on the stake (number of algos) that they have. The VRF behaves similarly to a weighted lottery; it is as if every algo in an account gets its own lottery ticket. The more algos in an online account, the better chance the account has of being selected to participate.

User Replaceability

The selection of users to participate in the certification of blocks using the VRF is done randomly and secretly, without any communication among the users. Since executing this procedure requires a user’s private key, no one except for that user knows whether they were selected. An adversary does not know who matters in generating the next block (and thus should be targeted) until after a selected user participates in the consensus protocol. And by the time an adversary realizes that a user is selected, it is too late for them to benefit from an attack; the user has already sent their message and fulfilled their responsibility in the consensus protocol. Furthermore, for each step of the protocol a unique subset of participants is randomly and privately selected, independent of earlier subsets.

Algorand Team Partner

Algorand was founded by Silvio Micali, an MIT professor who put together a very strong team. It consist primarily of researchers and scientists. Because of the connection to MIT, most of the Algorand team is located in Boston.

in Addition to the core Algorand team, there is also the Algorand Foundation, which is the governance and research organization leading the development of the Algorand platform.

Silvio Micali

Silvio Micali is the founder of Algorand. He is an expert in cryptography, secure protocols, and pseudo-random generation and he oversees all of the research and security involved with Algorand. He is the co-inventor of a large number of protocols, including Verifiable Random Functions, Zero-Knowledge Proofs, and Probabilistic Encryption.

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Steve Kokinos

Steve Kokinos serves as the CEO at Algorand. He was previously the CEO at the global enterprise communication platform Fuze, and he brings a wealth of business and entrepreneurial experience to Algorand.

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W. Steves Ford

W. Sean Ford is the COO at Algorand, and he also brings a wealth of business experience, having previously been the CMO at LogMeIn.

Source : Algorand

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