Zero downtime, no forking, 4.4 second deterministic finality, 26M addresses, 1.4k+ nodes, carbon negative, $0.0004 transaction fees, post quantum secure. FIFA Technical partner, Nigeria Partner, El Salvador Partner, Central Bank of Italy Partner, ISDA Member, ISO20022 Compliant. Algorand is grand.

Algorand Metrics:

[metrics.Algorand.org](

Algorand’s unique and novel 1/1 blockchain design called Pure-Proof of Stake(PPoS) allows for decentralization, scalability, and security.

Here is a break down of what exactly Pure Proof of Stake is and why it is unique:

* **Block Proposal:** Accounts propose new blocks to the network
* **Soft Vote:** Committee votes on proposals and filters down to one
* **Certify Vote:** Separate committee votes to certify the block
* **Each node receives a certificate for the block and writes it to the ledger**
* **New round is initiated and process starts over with new block proposers and voters**

The Algorand blockchain uses a decentralized Byzantine agreement protocol based on pure proof-of-stake (PPoS). It can tolerate an arbitrary number of malicious users as long as honest users (those that follow the instructions of the protocol) hold more than two-thirds of the total stake in the system. The following is a brief overview of the Algorand protocol.

## 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.

#### Achieving Consensus

Consensus refers to the way blocks are selected and written to the blockchain. Algorand uses the VRF described above to select accounts to propose blocks for a given round. When a block is proposed to the blockchain, a committee of voters is selected to vote on the block proposal. If a super majority of the votes are from honest participants, the block can be certified.

Consensus requires three steps to propose, confirm, and write a block to the blockchain: 1) propose, 2) soft vote, and 3) certify vote. Each is described below, assuming the ideal case when there are no malicious users and the network is not partitioned (i.e., none of the network is down due to technical issues or from DoS attacks).

#### Block Proposal

In the block proposal step, accounts are selected to propose new blocks to the network. This phase starts with every node in the network looping through each of the accounts that it manages and, for each account that is online and participating, running Algorand’s VRF to determine if the account is selected to propose the block. Once an account is selected, each node propagates its proposed block along with the VRF output, which proves that the account is a valid proposer. Each node in the network will get block proposals from other nodes, and then validate the VRF output for these proposals.

#### Soft Vote

Next, each node will run the VRF for every participating account it manages to see if they have been chosen to participate in the soft vote committee. If an account is chosen, it will have a weighted vote based on the number of algos it has. Each account chosen will filter the proposals down to one by voting to confirm the block. These votes will be for the lowest VRF block proposal calculated at the timeout and will be sent out to the other nodes along with the VRF proof. Each node will validate the committee membership VRF proof before adding to the vote tally. Once a quorum is reached for the soft vote, the process moves to the certify vote step.

#### Certify Vote

A new committee is then selected to check the block proposal that was voted on in the soft vote phase for overspending, double-spending, or any other problems. If valid, the committee votes again to certify the block. This is done in a similar manner to the soft vote where each node iterates through its managed accounts to select a committee and to send votes. These votes are collected and validated by each node until a quorum is reached, triggering an end to the round and prompting the node to create a certificate for the block and write it to the ledger. At that point, a new round is initiated and the process starts over.

​

# People tend to unfairly criticize Algorand’s tokenomics so here is an exact break down:

* **10 Billion MAX SUPPLY (There will never be more).**
* **7 Billion ALREADY IN CIRCULATION (70% are already owned).**
* **3 Billion left to be released, the only way to obtain them is via Governance until 2030.**
* **Yearly inflation is around 3.7% until 2030, when Algorand will become deflationary.**

Links:

* [Algo Supply](
* [Tokenomics](
* [Transparency Reports](

​

If you’re interested in participating in Governance, the next period sign up opens October 1st:

[algorand.foundation/governance](

View Source

41 thoughts on “Zero downtime, no forking, 4.4 second deterministic finality, 26M addresses, 1.4k+ nodes, carbon negative, $0.0004 transaction fees, post quantum secure. FIFA Technical partner, Nigeria Partner, El Salvador Partner, Central Bank of Italy Partner, ISDA Member, ISO20022 Compliant. Algorand is grand.”

  1. can anyone tell me or show me some further information on what those fifa and nigeria or el salvador partnerships look like? what real world usecase does alfo provide?

    Reply
  2. Algorand also generates new private,public voting key pair derivatives per-round, erasing the key when it broadcasts the vote. There is also a distinction between account keys and participation keys. If someone were to hack your participation node, they could not spend your money with the participation key, and they wouldn’t be able to vote on the previous block. Since there is no slashing, they could not purposefully vote on multiple blocks to drain your wallet either. The security with respect to keeping your own money safe is generations ahead of the competition, these guarantees are impossible on things like Ethereum.

    Reply
  3. Any currency that is or becomes deflationary is not a functional reserve of wealth in capitalistic economies. I’d argue the inflationary periods prior to 2030 don’t even matter because people will purposefully hold knowing the value will eventually increase.

    The problem with cryptos that emphasize deflation and max values is that they are incompatible with our financial credit system. Absolutely no loans would be taken when 1) the bank would better profit just holding the coin for long term gain and 2) your loan gets progressively more expensive every year due to deflation. You’d get absolutely buried in debt.

    Reply
  4. Problem with crypto is 99% of the people work at a fucking Wendy’s and think they know what matters. I’ve looked up every person on the algorand foundation team and algorand inc team and they are cryptography. They been doing it for years at the most prestigious universities. They’re going to snowball and bring in all the talent. Way to much upside at a 2 billion dollar market cap. You got to bet on people. Who are you betting on with these other chains? Influencers and their ability to pump it up?

    Reply
  5. > The Algorand blockchain uses a decentralized Byzantine agreement protocol based on pure proof-of-stake (PPoS).

    Byzantine? Just straight up embracing the complexity now?

    Reply
  6. Do you know how many other coins and projects I’ve seen touted as the next best thing like you’re doing for Algorand? Countless. Each one unique in its own way. But one common denominator between them the fact that someone, like you OP, got on the horn and tried to pique the space’s interest in said project. Most of them have all but faded into obscurity, public interest a ghost of yesterday.

    Reply
  7. When using [a practical metric for smart contract TPS](https://medium.com/dragonfly-research/the-amm-test-a-no-bs-look-at-l1-performance-4c8c2129d581) comparisons, it is clear that a lot of the layer-1 smart contract platforms are not as “far ahead” as they like they advertise… Algorand is already on par with the likes of the frontrunners Solana and Avalanche in this regard.

    After the 6k TPS upgrade this summer, Algorand will have 5x the throughput of the competitors with much faster times to finality (instant for transactions and 4.5 s per block).

    Reply
  8. I love ALGO for ALGO’s sake, but I got burned pretty bad with YLDY. Taught me a good lesson though: believing in Algo doesn’t mean you should believe in Algo-related projects.

    Reply
  9. Oh, seeing all those things in a single post makes me happy. Sometimes I feel like Algorand is doing so much great things at the same that people can’t even keep up with it. All they ask is about the price. Looks like most people can’t really understand the depth of what Algorand has been doing.

    Reply
  10. The transaction fees on a platform with DeFi is huge. I’ve been experimenting with different platforms and I feel most secure about the value I’m storing on that chain.

    Reply
  11. Even when the entire altcoin market is depressed there are rough diamonds to be found. People keep saying stuff like why hasn’t the price blown up yet (in year 3)? Amazon lost money for >10 years before it blew up. ALGO is not SHIB. Edit: changed 20 to 10

    Reply
  12. All of this but the price doesn’t move, even when it was bullish it seems like the price is very much controlled. More to this than meets the eye. The Algorand code might be the one but the token just doesn’t correlate. Hopefully time will prove me wrong as I’m heavily heavily invested in Algo.

    Reply
  13. Being partner with fifa is the biggest red flag. Fifa is one of if not the most corrupt organization in the world. They have sold their souls a long time ago. If they can sell the world cup to one of the most anti football fan law country, and a country having nothing to do with football as a whole, they can sell partner position as well.

    Reply
  14. The FIFA Agree for the World Cup in this year would be huge. More than 300 Million people watching ALGO ads everywhere in Stadiums, TV, FIFA Social Networks. I can’t wait.

    Reply
  15. I’m still confused as to what the incentive to run an ALGO node is with how low the staking rewards are. Why invest in hardware when you can just put that money right into coins and get governance payouts?

    Reply

Leave a Comment