Posted 1 year ago | by Ben Armstrong
Algorand Wants to End the Blockchain Trilemma
The blockchain and crypto world has been taken by the Decentralized Finance (DeFi) storm, forgetting about a lot of high-quality projects with lots of potentials: Algorand is one of those projects.
The beginnings of the project go back further than crypto itself with its future still shining bright with the release of Algorand’s blockchain 3.0 closing by.
To know BitBoy Crypto’s opinions and expectations for the Alrorand platform and token, make sure to watch the video!
What is Algorand?
Algorand is a Boston-based open-source software company working towards building a borderless and free economy.
To achieve this, they’ve developed a permissionless, pure Proof-of-Stake (PoS) protocol built on Byzantine consensus that allows open participation, scalability, security, and transaction finality.
Algorand aims to solve the blockchain trilemma, a term coined by Ethereum’s founder Vitalik Buterin, which states the necessity for blockchain platforms to decide between 2 of the 3 components as a tradeoff is mandatory: security, scalability, and decentralization.
A Peek Into Algorand’s Architecture
Algorand uses a Byzantine agreement protocol algorithm known as Pure Proof-of-Stake, tying the security of the network to the honesty of the majority.
Compared to Delegated Proof-of-Stake, Liquid Proof-of-Stake, or Bonded Proof-of-Stake, there is no sanction mechanism if an actor misbehaves, which may include things such as low uptime or security faults.
As long as 2/3 of the majority is honest bad actors cant tamper the protocol, with Algorand preferring to make cheating by a minority of the money impossible and cheating by the majority stupid.
Algorand’s blocks are built in 2 phases by using lotteries known as cryptographic sortition which enable fast finality.
The 2 phases are:
- Proposal phase: One token is randomly selected and its owner proposes the next blocks, with no interference possible as the proposer is only known during the propagation phase.
- Voting phase: A committee composed by the owners of 1,000 random tokens is selected, approving the block proposed by the first user.
Nodes in the Algorand platform can be of two types: participation nodes and relay nodes, which don’t participate in decision making but only facilitating communication between participation nodes.
Benefits of Using the Algorand Blockchain
Algorand doesn’t require high energy-consuming mining farms, which results in ow computation requirements
Fast agreements are achieved as the entire community agrees on the next block and confirms transactions with latency on the order of a minute while scaling to many users.
Token holders can delegate their tokens if they wish to participate in the consensus, which allows for a lot of flexibility on how users can operate.
Users can rely on a new block as soon as it appears even if the network is temporarily partitioned, Algorand ensures that no users have divergent views of a confirmed transaction and as so there is an extremely low fork probability.
Algorand offers true decentralization as the network is not controlled by a few miners or validator set since proposers and committees are randomly selected.
Algorand’s solution to the problem of blockchain storage comes in the form of Algorand’s vault which aims to promote better scalability through efficient on-boarding of new users by requiring the creation and storage of blocks as soon as they join the network.
Algorand is Already Planning its Future
The Algorand team is not satisfied with the variety of features and advantages the platform already provides, with developers promising to introduce several new features that would fine-tune the existing capabilities.
A digital signature scheme known as Pixel is the technology by which Algorand aims to reduce its bandwidth demands via a novel system based on the ability to aggregate multiple signatures of a single message and turn it into a compact signature of the same length.
Self-validating transactions will be based on the separation between consensus and storage, with users being able to check the validity of payments without the need to maintain balances for block verification and individual payments.
Algorand also plans to support “Truly Atomic Swaps” down the line as they plan to implement will implement same-chain atomic swaps in a single transaction, changing this state of affairs with current atomic swaps that require a long time to process.
ALGO’s Performance is Testament to its Potential
Algorand uses its native Algo token, which is now sitting at rank 51 with a $179,777,512 market capitalization and a price of $0.223.
The token started April with a price of $0.154 and a market cap of $108,578,054, finishing June at $0.213 and $170,841,296, which shows a lot of interest and trust on the token.
Algorand will be listed in The Syndicate on July 14th, Cryptos.com fundraising platform which is sure to bring even more attention to the altcoin. You can take advantage of the campaign by signing up here.
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