What Is Pure Proof of Stake (PPoS)?
Algorand uses the Pure Proof of Stake consensus mechanism, which is built on Byzantine consensus. In this approach, the influence of each user on a new block is dependent on their stake. The system secretly and randomly selects users when it comes to creating new blocks and voting on block proposals.
The likelihood of a user getting chosen in the creation of new blocks is proportional to their stake.
The PoS consensus mechanism is based on the premise that a person can mine or validate block transactions according to their stake (i.e., the number of coins that they hold). If someone owns 3% of the coins available, then it means that they can theoretically mine or validate 3% of the total transactions.
The primary benefit of this is that it makes mining accessible to individuals who don’t necessarily have the resources to participate in traditional mining. Instead of requiring expensive and energy-consuming hardware, all a person needs is a computer with an internet connection and some coins!
Algorand is a pure proof of stake blockchain protocol that achieves scale, security and decentralization. It was developed by Silvio Micali, Turing Award winner and professor at MIT.
Algorand solves fundamental problems faced by other blockchain protocols:
Scale – The transaction throughput problem faced by blockchains like Bitcoin or Ethereum can be solved with Algorand’s near-instantaneous transaction finality.
Security – Enabled by pure proof of stake and an elegant Byzantine Agreement scheme, Algorand has provable asymptotic security against Byzantine adversaries.
Decentralization – With a homogeneous token distribution, Algorand empowers a truly decentralized network with no special roles or nodes.
Algorand is a scalable blockchain platform designed to be simple, secure, and efficient. The blockchain is built on the concept of Proof of Stake (PoS), which ensures that participants with the highest value in the system are selected to validate transactions. This approach eliminates the need for high energy consumption (and cost) as well as complex network structures, which are required to maintain a PoW blockchain.
The Algorand platform employs two types of participants: users and nodes. Users transact using the Algorand platform by sending or receiving tokens to other users. Nodes participate in the network by processing transactions and securing them. The system also features special nodes called Block Producers (BPs), which perform all functions of an ordinary node as well as verify blocks in the system by signing them.
At launch, the first million blocks were pre-mined. Afterward, new blocks are created every five seconds at random intervals. The block creation process starts with a set of randomly selected BPs choosing a leader for each block cycle. A leader is elected by means of a multi-round Byzantine agreement protocol called the Binary Byzantine Agreement (BBA). During this process, BPs communicate with each other offline until they reach a consensus about who will become a block proposer.
