Thanks professor @nane15 for this eye opening lecture and the privilege to participate in this homework post.
- WHAT IS ALGORAND BLOCKCHAIN?
Algorand is a blockchain cryptocurrency decentralized network design and aim at solving the blockchain trilemma of achieving decentralization, speed and security. Algorand has grown to become among the top-25 cryptocurrency by market cap. As with other cryptocurrencies networks, Algorand's aim is to ensure the efficient and smooth transaction of cryptocurrency.
Sivio mically algarand is a Boston based open source software company working towards building a border less economy. They develop a pure proof of stake protocol(PPOS) will have an open participation scalablity security and transaction finality. In algorand consensus the algorithm is called pure proof of stake the network ties security to the honesty of the majority essentially to the delagated proof of stake, liquid proof of stake.
The blocks in algorand are constructed into two phases through cryptography sortition. They phases are:
a) proposal phase: a single token is random selected and the owner proposes the next block through the proposer and is only known to the whole network during the propagation phase.
b) voting round: the random selection by the committee members makes the protocol extremely secure against adversary attacks.
According to white paper explains that algorand use theoretical paper to determine tge flow of data that can be read and designated by everyone and also the agreement used by algorand is the Byzantive agreement. The agreement is used to reach a consensus among the users on the next transaction to be performed.
Also algorand uses a new crypto design called vault to reduce storage and boot strapping costs for those involve in algorand. Vault removes firstly the storage of recent transactions from the storage of account balance and secondly it permits the sharing state across participants in such away security guarantees are strong and secured.
2.) WHAT IS PPOS?
PPOS is a permissionless consensus mechanism specific to algorand blockchain which ensure full participation along with blockchain protection and good transfer speed in a truly decentralized network.
What makes the protocol a variation of pure proof of stake is that validatotors are not only chosen to participate based on the consistency of their stake that is the number if $ algo they own but also through random selection no matter how many coins they own. Automatic selection is based on verifiable Random function.
With algorand every investor who owns $ algo can participate in the consensus protocol to reduce level of exposure. Users do not use their so called spending key instead who ever wants to participate as a validator within the protocol generated and registers a participation key with this they can participate and vote on block. The use of such participation ensure the safety of each cryptocurrency.
3.) EXPLAIN THE ADVANTAGES AND DISADVANTAGES OF PPOS
ADVANTAGES OF PPOS
a) In PPOS there is no stopage to participation by users. The alogrand consensus protocol don't accept participants to solve cryptographic puzzles and the creation of block is very low that the computational cost and the financial cost is very low
b) In PPOS a user can determine the increase in influence by increasing its stake and also in algorand users don't enjoy splitting their stakes in many accounts.
c) Algorand blockchain PPOS never welcomes any source of uncertainty and delay. In algorand it is only one block can have the threshold of comitee votes and all transactions are final in algorand. When one block is being certified and is bring written to the chain users can rely on the transactions contained in the block and believe that the block belongs to them.
d) In PPOS users do not need to delegate their voting power and users may decide to vote on blocks probabilities which may be directly proportional to there stakestake and the propagation of blocks to network in PPOS is within seconds.
e) Advanced level of decentralization and anonymity if participants. One of the aspect of proof of stake that kept rising question was the tge fact that while solving the scalability problem it made it likely for those who staked a huge number of token to become a monopoly thus jeopardizing the decentralized nature of the network. PPOS approaches the dilemma in an equidusatnt way by selecting validatotrs randomly and all users of the blockchain can be selected at some point to participate in validation which ensure security and higher level of decentralization.
DISADVANTAGES OF PPOS
a) The staking reward are not encouraging except as a form of passive income and in relation to large amount of stake token.
b) The blockchain can tolerate an arbitrary number of malicious users (as long as they follow the protocol instructions) hold miterhan one third of the systems total stake.
c) when the number of staked token of a node that has a proposed problematic block are not reduced to discourage future participation it will make the node to go in to recovery node immediately and when this process continues there will by an increase in speed.
4.) DO YOU THINK ALGORAND REALLY SOLVED THE BLOCKCHAIN TRILEMMA? EXPLAIN YOUR ANSWER.
In blockchain trilemma developers encounters three mains issues which are scalability, security and decentralization. Developers finds it difficult to develop a blockchain that can accept and support a large user base, making sure there is not central body controlling the blockchain and making sure that there no access by hacker to interfere in the blockchain.
Algorand can solve the issue of blockchain trilemma through the pure proof of stake consensus mechanism. This mechanism ensure that users are causally selected and unawarely votes on blocks proposal. Also each individual's influence on the choice of a new block is determined the numbwrrod token which is proportionals to the individual's stake.
Any user online have the chance to be choosed and propose a block and have the chance to vote on the block proposed. Algorand make sure that the money generated by the system is in honest and trusted hands and also the minority of the economy decides the security of the whole economy there making the system free from harm.
5.) DO YOU THINK PPOS IS BETTER THAN PoW? EXPLAIN YOUR ANSWER.
Pure proof of stake is better than proof of work In that in proof of work the solving of the cryptographical puzzles requires a designated and a specialized hardware which consumes more energy and more electricity to solve thereby making it more capital expenditure for developers but in algorand does not require users to solve cryptographical puzzles to validate a block rather any user who is online abd have a stake can pertake in the consensus protocol and it does not requires specialized hardware to validate blocks.
6.) DO YOU THINK PPOS IS BETTER THAN POS? EXPLAIN YOUR ANSWER.
Pure proof of stake is better than proof of stake in that proof of stake the consenus mechanism uses nodes that are selected on stake of tokens for verification and recording transactions but in pure proof of stake the consensus mechanism is that it decreases the requirements for staking thereby making it tobbeeat its minimum and making available opportunities for users to participate and vote on blocks.
7.) EXPLORE AND EXPLAIN AN ALGOTRANSACTION USING ALGOEXPLORER.IO ( SCREENSHOTS REQUIRED)
To explore the algorand I clicked at my browser by inputing algoexplorer.io at my browser.
At latest transaction box menu, one can see the TxID shows the transaction address of the each transaction, the BLOCK shows where the transaction is being done, AGE shows how minutes/seconds was it carried out, the amount whether USDC, planets or algorand. FROM shows the transaction is coming from and where the transaction is going TO.
At the block box menu, the BLOCK shows where the transaction was done, the PROPOSER ( the user that proposed and vote on the block), the Txs shows the transaction carried out and the BLOCK REWARD shows the reward for each prosper and vote on each block.
The image below shows that the algorand price as 11 December 10:55 am was $1.5025 which decrease by 3.07%, the total supply was 10,000,000,000, the block at which the transaction was taken place was 17,956,659,the speed ay which the block was operating was 4.4seconds, the supply in circulation was 6,312,681,147.27,the stake at which user can have acces to vote and validate their stake was 2,426,563,386.31.
8)Carry out an analysis of the price of ALGO FROM THE BEGINNING OF THE YEAR TO THE PRESENT. VIA GRAPHICS (SCREENSHOTS REQUIRED.)
Using trading view to analyze algorand, from the chart there was a sharp upward movement of price between September and October at a price of $2.4000 and the there was a downward movement of price between may and june at a price of $0.800. During the upward movement of prices investors are buying cryptocurrencies and when there is download movement of price investors sells cryptocurrencies.
9) CONCLUSION
With algorand every investor who owns $ algo can participate in the consensus protocol to reduce level of exposure. Users do not use their so called spending key instead who ever wants to participate as a validator within the protocol generated and registers a participation key with this they can participate and vote on block.
Also with algorand it can encourage developers to solve the issues of scalability, security and decentralization of blockchains.
Regards to professor @nane15