Algorand Shared Node

Algorand is a low-latency platform for decentralized applications based on a Pure-Proof-of-Stake (PPoS) consensus. It is overseen by Boston-based Algorand, Inc. Algorand design was proposed and developed by MIT professor Silvio Micali.

Algorand’s operations started in testnet in April, 2019, and the mainnet release was rolled out in June, 2019.

Algorand’s native token is dubbed ALGO (algo), it has a fixed supply of 10 billion ALGO coins. By Q3, 2021, 5.5 billion ALGO will be released.

In order to achieve consensus finality, Algorand leverages its patented cryptographic sortition mechanism. With cryptographic sortition, accounts of ALGO holders propose new blocks to be included to the network. Voting committee filters down the proposals to the one.

Then, the separate committee votes for the block and certifies it: each node receives the certificate for the block and includes it into the ledger. Members of both committees are selected randomly by Verifiable Random Function (VRF): once the account is selected, it receives a cryptographical certificate (proof) of membership.

The process of voting itself is secured by Byzantine Agreement (BA) that makes Algorand attack-resistant: a malicious actor doesn't know which part of protocol he/she should attack to corrupt the entire consensus. This feature of the protocol is dubbed ‘player replaceability’.

Also, Algorand pioneered the concept of ‘asynchronous safety’: two blocks from arbitrary parties can’t be included into consensus, so, there’s no possibility for unexpected updates (unintended hardforks) in Algorand.

Algorand’s toolkit boasts two basic types of instruments required by decentralized economy, i.e. Layer-1 Algorand Smart Contracts (ASC-1) and Algorand Standard Assets (ASA).

Algorand’s smart contracts are written on the novel Transaction Execution Approval Language (TEAL) as well as PyTeal, a Python language interface. In 2021, Algorand smart contracts achieved 1,000 transactions per second speed with up to 5 sec in transactional latency. Execution of one operation with Algorand’s smart contracts is charged with a negligible 0.001 ALGO fee (ca 1000 transactions at $1). Algorand’s toolkit includes stateless and stateful (advanced) smart contracts.

Algorand’s native assets are customized tokens issued directly on Layer1: unlike ERC-20 tokens on Ethereum, they are issued just like ALGO tokens. ASA tokens are issued within Role Based Asset Control (RBAC): flexible asset control options are available for issuers and managers.

This design allows ASA to be integrated in a variety of value transfer and governance scenarios. ASA issuance module is spam-resistant; it allows Alogrand-based tokens to be involved in sensitive and sophisticated instruments.

Due to its low-cost and flexible design, Algorand’s solutions can be useful in a number of exciting use-cases. For instance, its smart contracts are suitable for escrows, payment channels, debts/collaterals solutions, cross-chain atomic transfers, decentralized exchanges.

Algorand’s L1 assets (ASA) are suitable for stablecoin minting, NFT issuance, identity management, verification systems, certificates, CBDCs, and so on.

As such, Algorand platform is chosen by two largest stablecoins (USDT and USDC), top-tier exchanges (IDEX) and even countries: The Republic of Marshall Islands issued SOV currency on Algorand blockchain.