Pure Proof-of-Stake (PPoS) Protocol

Algorand’s Pure Proof-of-Stake (PPoS) protocol achieves consensus by enabling all of the users who are holding ALGO tokens to participate proportionally to the amount staked. Unlike traditional Proof-of-Stake systems that require tokens to be locked or delegated, PPoS allows users to maintain full control over their tokens, ensuring that participation in consensus is decentralized and accessible.

In PPoS, the consensus process involves three main steps:

1. Block Proposal: Token holders are randomly selected to propose new blocks. The probability of selection corresponds to the amount of ALGO they hold.
2. Soft Vote: A randomly selected committee reviews the proposed blocks, voting to filter and select the most valid block for the next phase.
3. Certify Vote: Committee certifies the selected block, finalizing it for addition to the blockchain.

This system avoids the energy-intensive requirements of Proof-of-Work and is designed to be both efficient and inclusive. The use of Verifiable Random Functions (VRFs) ensures that the selection process is random and tamper-proof.

Algorand’s Byzantine Agreement Protocol

The Byzantine Agreement (BA) protocol that is used by Algorand ensures that the consensus is reached even when some participants act maliciously. This protocol works under the assumption that a majority of the stake is held by honest participants.

Algorand’s BA protocol relies on committees, which are small, randomly selected subsets of the network. These committees perform the following functions:

• Proposing Blocks: Committees validate and propose blocks for addition to the blockchain.
• Voting: A secure voting process is used to finalize blocks, ensuring that only valid transactions are included.

The protocol is designed to be secure, efficient, and scalable. Randomized committee selection and cryptographic proofs ensure that malicious actors cannot predict or influence the process.

Verifiable Random Functions (VRFs)

VRFs are cryptographic tools that generate a provably random output. Algorand uses VRFs to ensure fairness and unpredictability in the consensus process.

• Random Selection: VRFs randomly select participants for block proposal and committee membership, making it impossible to predict who will be chosen.
• Transparency: The outputs of VRFs can be independently verified by other participants, ensuring trust in the selection process.

This randomness enhances security by preventing targeted attacks and ensuring that consensus decisions remain unbiased.

Highlights

• Algorand’s PPoS protocol enables token holders to participate in consensus without locking their funds.
• The Byzantine Agreement protocol ensures secure block finalization through random committee selection.
• Verifiable Random Functions enhance fairness and security in the consensus process.
• Algorand’s design prevents forks and is resilient against common blockchain attacks.
• The system assumes a majority of the stake is held by honest participants to maintain security.