Hello everyone. This @sherazsultan. I hope you all are doing well and learning the new and amazing things each week in the steemit crypto academy. The professor @nane15 has taught us about the Algorand and the Blockchain Trilemma. He explained the topic in detail and assigned some questions to solve in the assignment. I am going to answer those questions one by one..png)
1. What is Algorand blockchain?
The Bitcoin was came into existence in 2009. It was mined at first in 2009 on the bitcoin blockchain. The blockchains then started gaining popularity and today, the blockchain is seen everywhere. The blockchain is making the world digital and advancement are taking place in every field of life. Time to time, the new blockchains are being launched. Some blockchains are launched for some specific purpose. Some blockchains are introduced to solve the problem which is existing in the previous blockchain. As we have talked about the trilemma blockchain which was introduced to solve the problem which were there in the BTC blockchain. But today, we are going to talk about the Algorand Blockchain.
The Algorand is known as the third generation blockchain which was introduced in 2017. This blockchain was introduced to solve the problems of already existing blockchains. The blockchain which uses the PoS have the problem that they only favor the nodes who have stake high amount of the coins. The people who do not have much coins in his wallet cannot participate in validation of block and the governance activities.
The Algorand blockchain use the Pure Proof of stake algorithm. This algorithm solve the problem which were there in proof of stake. This make the blockchain more decentralized by eliminating the need of staking the amount or favoring those who have staked high amount of tokens. This blockchain is considered as highly secure and decentralized.
The 2000 transactions can be performed on the algorand blockchain which mean that scalability is also high on this blockchain. We have learned in the steemit crypto academy that this is not possible for the blockhain to be secure, scalable and decentralized. The blockchain cannot have all these three features at a time. But the Algorand blockchain is third generation blockchain which is secure, scalable and decentralized.
Team
Because of its feature, this blockchain is gaining the popularity rapidly. It was created in 2017 by famous blockchain expert named as Silvio Mikali. There were 11 member in the team but this concept was originated by Silvio Mikali. He worked to solve the problems which are there in the previous blockchains because of the blockchain trilemma. He did research and introduced the algorand blockchain which is secure, scalable and decentralized.
Q.2) . What is PPoS
Multiple consensus algorithm are being used in the mutiple blockchains such as PoS, PoH , PoW , etc. The PPoS is also a consensus algorithm which is being use in the algorand blockchain. This algorithm is build on the Byzantine consensus algorithm which have soolve the issue of multiple problems which were there in the old blockchains.
The PPoS stand for Pure Proof of Stake consensus algorithm. There is no favoring for the nodes who have staked high number of tokens on the network. On the proof of stake, the validator is one who have staked large number of the coins. The more coins you have staked, the more chances there will be to become a validator. But PPoS consensus algorithm solve this issue.
There is no need to stake high tokens just like PoS. The traders just need to hold the native coins. The staking of some coin is also necessary to participate in the validation of transaction. The staking power decide the rights given to the user on the network. But the user can even participate in the validation process just by small staking. In Proof of stake, the users need to stake high amount of coins in order to become validator. The large staking power mean big influencer. But in PPoS, the investors who hold and stake the coins become influencer. But their influencing power depend upon the tokens which they have staked. At least 1 ALGO is rewuired to participate in the validation. In PoS, the validator is one who stake much coins. The nodes need to hold large number of coins to participate in staking. On Ethereum blockchain, the users need to hold at least 36ETH which is quite high amount.
In PPoS, there is no need to hold or stake large number of tokens to become validator or to participate in the validation and governance activities. This algorithm make the blockchain highly secure and scalable. Almost 2000 transactions can be performed in a second. This algorithm made the blockchain highly decentralized. There are two steps of validation of block.
- Proposal Stage
- Voting Stage
The transaction need to go through these to steps before validation. The validator is selected by the network randomly. To become the participation nodes, the users need to stake some coins. Only then they can participate in proposing and voting activities. Then a node is selected by the network to propose the block. That node is known as the block leader. This task is done by the network in private so that no malicious person can attack the network. This enhance the security of the network. When the Block leader generate and propose the block, the voting step is perform then.
Then the node is selected to validate the block. This is also done by the network. The node is selected among those nodes who have stake their coins and now are the participation nodes. After verification and validation of the block, it is added on the blockchain. But if any error is found on the block, it get rejected and a new block leader is elected to propse a new block. Then the process continue in the same cycle.
3. Explain the advantages and disadvantages of PPoS.
- Easy to become the Participation node
The main and big advantage of the PPoS is that there is no need to hold huge amount of token to participate in validation process. In PoS, the users have to stake high amount of token in order to participate in the validation activities. The node who stake more have more chances to become the validator.
- High Speed
The PPoS can verify more than 2000 transaction in one second which ean that this algorithm provide the high speed. There are some blockchain like eethreum(use PoS consensus algorithm) where only 15 transactions can be performed in one second which is quite slow. The Algorand use the PPoS and can perform more than 2000 transaction in one second.
- Security
This algorithm provide the high security. The validator is selected by the network very privately which enhance the system's security.
- Cost Effective
To perform the validation of the block, there is no need to buy the expensive computers. The Algorand blockchain which use the PPoS can validate the block using the computers which are cost effective and not costly. There are some blockchains which use the proof of stake or proof of history or proof of work. But vaidation is quite expensive because the expensive computers are required and high energy is consumed to validate a block which make the validation of block very costly.
- Decentralized
On the PPoS, there is no favor for the nodes who stake the high number of coins. There is no favor for the big holders. This make the platform more decentralized. The more power is given to the users who have staked more coins but minimumly 1 ALGO is use to stake to participate in the validation of block on the algorand blockchain. While on other blockchain which uses other consensus algorithm favor those nodes who hold and stake large amount of the tokens.
- Little Power Consumption
Low amount of energy is consumed to verify a transaction on the PPoS consensus algorithm. In PoW consensus algorithm, huge amount of energy is consumed to verify a transaction. Which make the mining process so costly. But in PPoS, low energy is consumed so this consensus algorithm is considered as energy efficient.
Disadvantages of PPoS.
- Low reward
This is a disadvantage of the PPoS. Here the nodes who validate the transaction get low reward. There are some blockchain which give high amount to the validator as reward but in case of PPoS, the reward amount is low
- Security concern
There is no need to stake high amount of coin to become participation node. The participating in validation of the block has become so easy. Almost everyone can participate which enhance the security threats. The attackers can also become the participation nodes by staking little amount of coins and can harm the network.
- No panelty
There is no punishment for the block leader who produce the wrong block. On the other blockchains, there is punishment for the mistake but on PPoS, there is no punishment which in direct mean, there is lack of dicipline.
Q.4) .Do you think Algorand really solved the blockchain trilemma? Explain your answer.
The Blockchain Trilemma is a situation when the blockchain developer need to choose two key features among the three. The blockchain cannot be decentralized , scalable and secure at the same time. The security, decentralization and scalability are the three key features but the Trilemma is the situation where the developers face problem of choosing two features among the three. But we have discussed above that the Algorand blockchain is decentralized, secure and scalable so Yes! we can say that this blockchain has solved the Blockchain trilemma.
The PPoS consensus algorithm is use in the algorand blockchain which make it secure, fast and decentralized. The working and operation of this blockchain prove that this blockchain has solved the blockchain trilemma problem.
There is no need to stake high amount of coin in order to participate in the mining process. The nodes need to stake only a small amount of coins and they become the participation nodes. This make the network more decentralization.
The blockchain can perform more than 2000 transactions. This is very fast speed. There are some blockchains which take minutes or seconds to perform the transactions. But in Algorand, multiple transactions are performed in an efficient way which make this system more scable.
The network itself select the validator among the participation nodes. This kept extremely hidden. Which make the blockchain super secure and make it difficult for hackers to hack the system.
All the key features are there in the ALgorand blockchain. This blockchain solve the blockchain trilemma and give us the blockchain which is decentralized, secure and scalable at the same time. This become possible because of the consensus algorithm which is being used in the Algorand blockchain. That consensus algorithm is Pure Proof Of stake. This algorithm make the blockchain free from blockchain trilimma.
Q.5). Do you think PPoS is better than PoW? Explain your answer.
Yes!. I think that the PPoS is better than the PoW The below are the reasons why i said that the pure proof of stake is better than the proof of work.
- High Speed
The PPoS have the capability to perform more than 200 transactions in one second. If we talk about the Proof of work, this consensus algorithm is being use in the first ever blockchain which is the BTC blockchain. Here 10 minutes are required to perform a transaction. So PPoS is quite fast and better than PoW in term of speed.
- Low Energy Consumption
The PoW consumed large amount of energy to perform a transaction. A huge amount of energy is use in the mining process. This make the PoW expensive. But PPoS use less amount of energy to validate a transaction. A small amount or even no energy is use for validation of the transaction on the PPoS.
- Don't need the high mathematical computation
There is no need to solve the complex mathematical problems to validate a transaction in the PPoS. In PoW, the minors need to solve the complex mathematical problems to validate a transaction. These puzzles are very hard and the minor who solve the problem first get the reward. But this not happen in PPoS case. No need to solve the complex mathematical problems to validate the transactions. The validator is randomly selected by the network.
- Cost Effective
In PoW, there is need to purchase the computer with high computational power to participate in the mining process. This make the PoW very costly. There is no need to use the high computation powered computers in PPoS to validate a transactions. So this algorithm is considered as cost effective.
Q. 6). Do you think PPoS is better than PoS? Explain your answer.
Yes. I think the PPoS is even better than the PoS. The below are the reasons of my statement.
User do not need to stake high number of coins
In PoS, the users need to stake large amount of the tokens to participate in the verification and validation of the transaction. They need to lock their assets for specific time period and can withdraw only when that time period end. The user who have not high amount of token to stake and to hold, canno participate in mining process. But in PPoS, this problem has been solved. The users can become participation node just by staking low tokens such as 1 ALGo is required minimumly to become the participation nodes.
- Speed
The speed of the PPoS is quite high as compare to the PoS. The PoS can perform 15 transactions in each second but PPoS can perform more than 2000 transactions. Its mean that speed of PPoS is quite high as compare to the PoS.
- Security
In the PoS, the validator is one who have staked large number of tokens. More tokens you have, more chances there will be to become a minor. But in PPoS, the minor is selected randomly by the network. This is keep super secrete. In this way, the network remain safe from the malicious attacks. This make the blockchain more secure.
- No favor for nodes holding large tokens
On the PoS, the nodes who have hold large number of tokens have more power. They become more influencer on the network. They have more rights. There are great chances to become validator of those who hold more coins. But in PPoS, all the participation nodes are equal. The validator is selected by the network. The staking power effect influencing power but here the staking and holding large number of token is not required to participate in validation process. Every person with small staking can become the participation node and can be selected as validator.
- Energy Effective
In PoS, no doubt that less power is consumed to validate the transaction as compare to the PoW but still this is very high amount of energy. In PPoS, a very little amount of power is required for validation of transaction which mean that this consensus algorithm is energy effective.
- Cost Effective
In PoS, more energy is consumed. Moreover the high computational power computers are used for mining which make the mining process expensive. In PPOS, there is no need to consume high amount of energy. Nore the high computation power computers are required for validation of transaction. So this algorithm is cost effective.
- More decentralized
The block leader is the node selected by the network for validation of transaction. His staking power does not matter. Every node on the network which have stake small amount can vote and participate in the governance activities. In PoS, the user have to stake the amount for a specific time period but in PPoS there is no need to stake the coins for long time duration. This make the PPoS more decentralized.
Q,7). Explore and explain an ALGO transaction using algoexplorer.io ( Screenshots required)
To answer this question, i visit the https://algoexplorer.io/. When the website will open, a lot of features of the blockchain will be displayed on the front page.
We will see the features on the Home page like Assets App, statistics, blockchain Tool and Dev API.
On the home page we also get the information about the circulating supply, online staking, latest block and latest transaction..png)
- Assets
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- Apps
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- Statistics
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- Blockchain
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- Tool
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- Developer API
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- Latest Block
The latest block list is there. By clicking on View all Block, this list will be shown on the screen. TO explore any among those blocks, click on it. All the information about that block woll be loaded.
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- latest Transaction
By clicking on the latest transactions, we can see the list of all the latest transaction.
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The above is the page which loaded when I clicked on the latest transaction. A list of transaction appeared. The detail of each transaction is given like Block, Age, Amount, From, To, Type, Fee. To explore any of transaction, just click on it.
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I clicked on the first transaction. The detail of the transaction was shown..png)
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- This transaction was type of ASA transfer.
- It was performed on Fri, 10 Dec 2021 12:24:30 GMT.
- Transaction ID =
CGBFRX3IYJ3W4LJHYDQIY4KHRBQUBBW274CN2SQKO7YITGOO375A - Seder ID =Y74RXNAUAZT2U5PD57Y22NVU6UPW5WNLRLHA763EE5IJSLSJXRAX6YY4OE
- Receiver ID=E3GZF5GUOQDW52TZ4X3PU5YR34447BOTVL6X3OOW3CB5EPHWIEISXK5BCI
- AMount= 5000YLDY
Q. 8). Carry out an analysis of the price of ALGO from the beginning of the year to the present. Via graphics (screenshots required.)
When i visited the coindex.com first, the below page appeared. I set the time as one year to answer this question.
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- Below is the ALGo chart from the 1 January till today 12/10/2021.
- The price of the ALGo at 1 January was 0.324385$. The ALGO was traded at this price of the 1rst of January.
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- Then the price started rising upward. With more high pressure and low supply pressure, the price started rising upward and on 14 February, the price of the ALGO was 1.70$.
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- Then the price started falling down and on 27 feb, the price of algo was 0.952407$.
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- Then again price started rising upward. The demand started getting high nd supply decrease because of which price raised up. On 18 April, the price of ALGO was 1.72$
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- The price again fall down. On 26 April, the price was 1.10%.
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- But when the buyers again entered into the market with more buying pressure, the price rise up. On 7 May, the price again reached to the 1.55$.
- Then again the downtrend occur. The price started falling down and on 21 July, the price was 0.695055$.
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- The price experienced the downtredn till the August and then the trend got reversed. The bearish trend changed into bullish trend and on September 13, the price was 2.39$
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- The price was raised up to the 1.95$ and then started moving in ranging zone. The price on 14 november was 2.00$.
- Then again the price fall till the 1.65$ on the 18 November.
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- Then price started rising and on 3rd December, the price was 1.89$. Today is 10 December and the ALGO is traded at 1.57$
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Conclusion
The Algorand blockchain use the Pure Proof of stake algorithm. This algorithm solve the problem which were there in proof of stake. This make the blockchain more decentralized by eliminating the need of staking the amount or favoring those who have staked high amount of tokens. This blockchain is considered as highly secure and decentralized. The 2000 transactions can be performed on the algorand blockchain which mean that scalability is also high on this blockchain. The Algorand blockchain is third generation blockchain which is secure, scalable and decentralized. So it has been solved the blockchain Trilimma
Thanks to professor @nane15