Hello everyone how are you all doing? I hope fine. I warmly welcome you to the fourth week of the 5th season. This is my first beginner's course of this season.
In this lecture by Professor @nane15 , we learned the basics of Algorand blockchain, Pure proof of stake (PPoS), Security based on pure decentralization, A highly scalable system, PPoS vs PoW, PPoS vs PoS and explored a transaction.
Algorand is a blockchain project which is aimed to solve the blockchain trilemma problem. It is created and came into being in 2019 by an Italian mathematician and professor Silvio Micali. Silvio Micali, like previous developers, who aimed to solve blockchain trilemma, tried to solve it with Algorand and be successful in it.
Algorand is a blockchain that is decentralized, scalable, and secure. It is a public blockchain being programmed to carry out swift transactions within the blockchain.
Algorand developed its consensus algorithm or protocol in PPoS. PPoS stands for pure profit os stake. And its coin is ALGO. Any user in the world that has ALGO can participate in PPoS or pure proof of stake protocol and my blocks of transactions and get the reward.
Algorand supports smart contracts,, which means it works similarly to Ethereum. But is just a better version of Ethereum blockchain as it has three kinds of smart contracts
1) SMART CONTRACT WITHOUT STATUS: Just like a typical smart contract it allows transactions to be signed and validated
2) SMART CONTRACT WITH STATUS: It stores information in the Algorand
3) SMART CONTRACT OF ALGOGENE: It combines other contracts
To learn more about the smart contracts of Algorand
As it works like Etherium blockchain therefore it gives place to uprisen of many dApps and DeFiApps which are decentralized applications and decentralized finance applications respectively. And many dApps and DeFiApps or platforms are shifting from Etherium or either looking for alternatives because Etherium’s gas fee is raising continuously and consumers have to pay a noticeable amount of funds either from their investment or from their profits
As you can see these glimpses of projects based on Algorand from finance to major companies and from content producing to gaming platforms everyone is here and working on this platform.
This shows the diversity of this project
PPoS or pure proof of stake is a protocol consensus used in Algorand to mine a block. For mining before PPoS there were two protocols PoW or PoS. PPoS is better than both of these and is more advanced. Because it's fully decentralized or should I say most decentralized up until now, permissionless, secure, and fast way to mine a block.
Anyone in this world who holds any ALGO, coin of Algorand can take part in mining and can have voting power. But keep it remembered that you must not only hold the currency to be a validator but you have to be chosen too. And HOW will u be chosen? We’ll discuss it now,
For being a validator Algorand have two phases
1)BLOCK PROPOSAL PHASE
In this way, some ALGO has been chosen RANDOMLY by the protocol consensus for the mining. This gives transparency, security, and most importantly decentralized nature. The only thing that can improve the chances of being selected is the number of ALGO tokens. When all the users have been chosen a block is built
2)BLOCK COMPLETION PHASE
Now another random group is selected which now checks the built block that either it is validated or not. They are responsible for the checking and analyzing of the chosen block. If the number of votes is in favor to mine the block against the votes of not to mine the block from the second chosen group then the block will be mine.
ADVANTAGES OF PPoS
- SECURITY
First and foremost is the security it is a very secure network because of its protocol that users are chosen randomly just like a lottery and it makes it less prone to attacks.
- FREELY STAKING
In this protocol you can simply exit anytime you want unlike other types where you must lock some amount of their currencies for a considerable time which is quite expensive sometimes
- FULLY DECENTRALISED
With the help of this protocol, blockchain can be totally decentralized. After all, decentralization was the aim of the first blockchain created by Satoshi Nakamoto. And it was also the inspiration from cypherpunk movement
- FAST
As the system is decentralized and the security is high, this protocol is very fast and efficient in transactions and mining of blocks
- UNABLE TO TAKE CONTROL
Whales or organizations can not take control because of the randomness of the protocol
DIS ADVANTAGES OF PPoS
- NO PUNISHMENT
There's no punishment in the protocol or the system to malicious users. Those who mine the blocks which are invalidated, therefore it’s becoming unpopular among some users who see it as a threat because malicious users can anytime affect this blockchain
- POTENTIAL MONOPOLY
The failure of PoS is the monopoly of whales. As I stated earlier that whales can not control the system. But if they have enough tokens, say 51% in the randomly selected both phases, which by the way is highly unlikely to happen, but we are in the state of WHAT IF, then they can damage the consensus, protocol, the blockchain, and the total system which really have been the resolution of the main problem regarding blockchain trilemma in cryptocurrencies
For answering this question let's dig into the term “blockchain trilemma”. It is terminology that refers to how a perfect blockchain system should work, it should be decentralized, secure, and scalable. The previous blockchain projects are failed to follow this term as the previous blockchain is either decentralized and secure, decentralized and scalable, or either secure and scaleable. They all must’ve dropped one condition from these three in order to work. Why is that? Because they use either PoW like bitcoin or either PoS like Etherium which are proof of work and proof of stake respectively
So what made Algorand different and how did it do it?
Well, the answer is obvious its consensus makes it different from those. PPoS is based just like PoS but a better version with fewer flaws and not easy to take down. Moreover, its work makes the blockchain break the blockchain trilemma, it's decentralized as the choice is random, its security as the choice is random, and therefore its scaleable as the choosing of block and users or validators is random. This randomness is the secret of success of Algorand
It’s obvious for anyone who just started studying blockchain and technologies that PoW is the floppiest and the worst protocol consensus there for blockchain technology, but credit where it's due, it was the starting and inspiration of PoS and PPoS. So yes PPoS is far far better than PoW, because in PoW miners have to invest their computational power to mine, which with time has continuously increased, as the cryptographic hash puzzles are upgrading to keep the time in limit with respect to high computational power. So long story short only users with high investment and highly advanced tech can mine the blocks in this consensus which really makes it a threat for its core meaning “decentralization”. Moreover, users can easily be manipulated or double-spent in PoW consensus. While PPoS not only let everyone participate but also provides better security against miscellaneous activities or users
As PoS is the more developed method than PoW, it sacrifices the decentralization for scalability. Why is that because PoS can allow users to vote by stacking, and therefore whales can be able to take over the projects? Projects like BNB of Binance are centralized by providing scalability. But there’s another issue which is in PoS or stacking users must’ve stack tokens or coins for a noticeable time, they can not spend them, therefore PPoS is better for users as it's giving them more freedom in choosing the fate of their currencies. And PPoS is solving a whale taking over the problem by randomness, the only thing that endangered is our previous WHAT IF situation
For exploring and explaining Algorand I’m gonna use algoexplorer.io. There as we enter we will find this page
As you can see at the top there’s information about the ALGO token. The information that an investor or trader must know before working on this project
While on the bottom there’s transactional information. And information about the block and the miner or the user who want to be a part of this project must see this as this is extreme level scalability
Now as we tap on the block we will get to know about the blocks which have been recently mined and will get a window like this;
The blocks which mined have been listed there with all the information, their age, their weight, and most importantly their identity. Let’s take a deeper look by taping in any of this block.
This is the informational page we get about any specific block we want
And by tapping on transactional details we get;
This page contains information about all the transactions of Algorand
By tapping on any of these we will get;
This is the most basic information about any transactions, for more transactional information we will scroll down
By clicking on more information we will get;
I would now like to mention the speed of blocks that are being mined, how fast and rapid they are, this makes this system the best system up until now. As we know it takes 10 minutes to mine a block in bitcoin
In this question, we’ll review ALGO
This is a yearly chart of ALGO/USDT, as you can see at the starting of this year it was around $2.3 in the 9th month of 2021
Exchanges in which it's available
And in algoexplorer.io we can find some more information such as the information in the below screenshot about the economic metrics
CONCLUSION
WE LIVE AND WE LEARN. The cryptocurrency was an inspirational project and was a big move against big banks and centralized systems. For them to establish PoW was our first hope and solution but with time developers developed more other and better platforms with more easiness and options. PPoS is the proof. It is the best right now but surely there will be a better version than it. As it is decentralized we may see more updates and betterment in this project and projects like it. Platforms like Algorand are bringing innovation and new ideas to this technology.
That's is from this assignment and thanks to our professor @nane15 for being a medium of conveying knowledge to us. I hope I was able to meet all the objectives of this task as I put in all my efforts. So this is the end of my assignment. I hope you were able to grasp the basics of my lecture.
THANK YOU.
ps: All the pictures have been sourced accordingly. The grammar was checked from grammarly.com while the markdowns have been done according to the Markdown Styling Guide.
Cc;
professor @nane15
regards,
@abdu.navi03
@steemcurator02
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit