What is Algorand?
Algorand is a scalable, secure, and decentralized digital currency and transactions platform.
Founded by Turing award winner and MIT professor Silvio Micali, Algorand is a permissionless pure proof-of-stake blockchain protocol. Unlike first-generation consensus mechanisms, Algorand’s technology finalizes blocks in seconds and provides immediate transaction finality while preventing forks. Algorand does also not reward validators with newly minted tokens.
With a primary focus on developers and their needs, Algorand’s node repository has been open-sourced and is publicly available. Algorand provides a robust set of developer tools, DApp analytics through a partnership with Flipside Crypto, and has a number of partners building on their blockchain, including OTOY, Syncsort, TOP Networks, Asset Block and more.
Maximum Supply (# or Uncapped): 10,000,000,000
Genesis Block / Distribution Date: June 11, 2019
Consensus Mechanism (Precise): Permissionless, Pure Proof of Stake
Emission Type (Precise): Fixed supply with Pre-minted rewards
Block Time (Seconds): Sub 5 seconds
How does Algorand work?
The Algorand blockchain network has its own official native cryptocurrency, called the Algo, to drive the borderless economy and the system of incentives. The Foundation holds Algos to contribute to the stability of the Algorand blockchain, to incentivize network participation, and to support the Algorand community, ecosystem building, and research. The Algos enter the ecosystem via various channels including development and research grants, participation rewards, and sales. All such activities are disclosed with full transparency to the Algorand community.
Algorand Technology: Algorand utilizes a Pure Proof of Stake, where validators are not rewarded nor are they at risk of being slashed. It becomes impossible for the minority to cheat and irrational for the majority to cheat the system as it would devalue their holdings. There is also no locking of tokens so a user has their tokens available at all time. Blocks are created in two phases where a single token is selected randomly and its owner proposes the next block. Subsequently, 1000 random tokens are selected with their owners then approving the block proposed by the first user.
These phases are ensured by the core protocol called Binary Byzantine Agreement, or Byzantine Agreement ★ (‘Star’), encompassing the following advancements:
Cryptographic sortition (self-selection) To prevent an adversary from targeting committee members, BA★ uses verifiable random functions (VRFs) to randomly select committee members in a private and non-interactive way.
Participant replaceability. BA★ mitigates adversary targeting a committee member by requiring committee members to speak just once, thus becoming irrelevant to BA★.
Experimental results running on 1,000 Amazon EC2 VMs demonstrate that Algorand can:
Confirm a 1 MByte block of transactions in ~22 seconds with 50,000 users
Latency remains nearly constant when scaling to half a million users
Achieve 125X the transaction throughput of Bitcoin
Achieve acceptable latency even in the presence of actively malicious users.
A test network for the protocol was launched in July 2018, and the first open-source code was released on Github in October 2018. As such, Algorand encourages anyone to audit its version of the VRF, forked, and extended from the libsodium cryptographic library.