Dec 31, 2021
Three Reasons Why Algorand Seems A Good One
Brainiac Founder, Green Chain (PPOS) and Versatility.
This is not a sponsored article, these are just my personal opinions.
The Founder
Silvio Micali has been on the faculty at MIT, Electrical Engineering and Computer Science Department, since 1983. Silvio’s research interests are cryptography, zero knowledge, pseudorandom generation, secure protocols, and mechanism design and blockchain. In particular, he’s the co-inventor of probabilistic encryption, Zero-Knowledge Proofs, Verifiable Random Functions and many of the protocols that are the foundations of modern cryptography. Micali has received his Laurea in Mathematics from the University of Rome, and his PhD in Computer Science from the University of California at Berkeley. He’s the recipient of the Turing Award (in computer science), of the Gödel Prize (in theoretical computer science) and the RSA prize (in cryptography). A real brainiac, like the name of the Superman’s extraterrestrial cyborg enemy, reknown for his stunning computational power and intelligence. In 2017, Silvio founded Algorand, a decentralized and scalable blockchain which provides a common platform for building products of various kind, from finance to nfts. At Algorand, Micali oversees all research, including theory, security and crypto finance.
Green Chain And PPOS
Blockchain may be one of the most impactful technologies in decades but many people associate it with a negative impact on the environment due to the high energy requirements for Bitcoin mining. Fortunately, not all blockchain networks involve energy-intensive mining to operate. Algorand takes a proactive approach towards blockchain sustainability by deploying an environment-friendly consensus protocol, the Pure Proof of Stake (PPoS): invented by Micali, it’s a protocol that enables to address the so-called Blockchain Trilemma, in which none of the three key elements of an ideal blockchain — scalability, security, and decentralization — are compromised. The PPoS algorithm has a straightforward principle: while it enables every user to become a block validator by staking the native token in the system (an approach typical for PoS blockchains), the protocol selects block validators randomly and secretly for any given period. Given that all users have equal chances to be picked by the system, the network is fully decentralized, as no one knows who the next block validator will be. While other PoS blockchains also manage to minimize electricity consumption to negligible levels, they lack true decentralization. In “traditional” Proof of Stake chains, the wealthiest validators with the most tokens have the most control over the network. They also receive the largest share of the block reward, increasing their share of the circulating token supply. As a result, PoS networks typically have a handful of validators who have the ability to control the network.
Versatility
On Algorand you can implement smart contracts, create decentralized apps, nfts and security tokens, like stocks, bonds and real estate. Every one of this features without forking: forking is when a blockchain diverges into two separate paths; sometimes this forking is intentional, like when a significant part of the community wants to change the fundamentals of the protocol. Other times this forking is accidental and occurs when two miners find a block at almost the same time. Eventually, one of the paths will be abandoned, which means that all transactions that occurred since that fork on the abandoned path (the orphaned chain) will be invalid. This has important implications for transaction finality and the security of the network. In proof-of-work blockchains, since forking is a possibility, transactions can’t be considered final until a certain amount of time passes and the likelihood of the transaction being on an orphaned chain is practically zero. This means that the actual throughput of this type of blockchain is caveated by a delay in finality. Algorand does not have forking, so transactions are final as soon as they are confirmed in a block. A throughput of 1,000 TPS then actually means 1,000 finalized transactions per second. Another important thing is the price, which is actually quite low, 1.75$ as I’m writing and rising these days. I think Algo will be one of the protagonists in the 2022 crypto scene.
