The Algorand story begins with a challenge: how to create a blockchain that is fast, scalable, decentralized and secure at the same time? This was the starting point that led cryptographer Silvio Micali, the creator and founder of the network, to develop a new consensus protocol that becomes the fundamental element of Algorand.
Algorand is a Layer 1 blockchain created to meet the demand of a global and borderless ecosystem, which needs transactions to be carried out quickly and securely.
We can summarize the features of the Algorand network as follows:
Scalable – Processes up to 10,000 transactions per second
Affordable: A transaction costs 0.001 ALGO, which is equivalent to a fraction of a dollar cent.
Secure – Has hundreds of anonymous validators around the world who take care of network security.
Programmable: can execute any logic thanks to the existence of smart contracts
Quantum Security – Thinking ahead, the network already has cryptographic security that protects its transaction history from possible attacks by quantum computers.
Sustainable: With very low energy consumption, the network is carbon neutral, meaning it has no negative impact on the environment
Instant – Algorand has instant finality, so when a transaction is written to the blockchain, it is confirmed forever and cannot be reversed.
We will discuss all of these points in more detail in this guide!
Silvio Micali has been a professor in the Department of Electrical Engineering and Computer Science at MIT since 1983.
Silvio’s research interests are cryptography, zero knowledge, pseudo-random generation, secure protocols and mechanism design and blockchain. In particular, Silvio is the co-inventor of:
Probabilistic encryption
Zero Knowledge Proof (ZKP)
Verifiable Random Functions (VRF)
And many of the protocols that are the basis of modern cryptography
Due to significant contributions to the fields of cryptography, information security, applied mathematics and computer science, during his career, Silvio received the following recognitions:
Turing Award in Computer Science
Gödel Prize in Theoretical Computer Science
RSA Award in Cryptography
Silvio Micali is also a member of the National Academy of Sciences and the National Academy of Engineering, and is considered one of the fathers of modern cryptography.
Origin of Algorand
In 2015, Silvio began learning about Bitcoin and Ethereum and realized that these blockchains faced scalability, security, and decentralization issues that made it difficult for them to be widely adopted and practical for most people around the world.
Challenged to solve the problems of his predecessors and deliver superior performance, Silvio Micali founded Algorand with the goal of designing a protocol that would overcome the limitations of existing blockchain systems and thus meet the needs of a global community. . With this, the network can be considered a third generation blockchain, with Bitcoin being the first and Ethereum being the second.
The solutions devised by Silvio are evident: transactions on Algorand are extremely fast and, unlike other networks, cost a fraction of a cent. You can send any digital asset, such as ALGO, USDC or NFT, or execute a smart contract in 3.3 seconds and at a very low cost.
Algorand is also highly scalable, capable of processing up to 10,000 transactions per second, meaning that even when the network is busy, you still get the same speed, security, and low transaction fee. This has become a huge advantage compared to Bitcoin and Ethereum, for example, which have slower networks, especially during times of high demand.
Transactions are secured with instant finality, meaning that once they are recorded on the blockchain, they will be there forever, without exceptions. Thanks to this instant finality, Algorand is not forkable, which further increases the security of its users. We will talk more about forking in this guide.
But how did Silvio manage to achieve scalability, high transaction speeds, and robust security while maintaining decentralization? This became a reality thanks to the unique consensus algorithm used by Algorand, which is Pure Proof of Stake (PPoS), which we will break down later.
When creating Algorand, Silvio Micali sought a blockchain that was suitable for a wide range of use cases, including financial transactions or decentralized applications (dApps).
Algorand is also a permissionless blockchain, meaning anyone can use it or develop on it without asking anyone for permission. Its testnet was opened to the public in April 2019 and its mainnet was launched in June 2019.
In this way, Algorand was designed to support the finances of today’s and tomorrow’s world, while enabling billions of individuals to easily interact with each other in an accessible way.
Their vision goes beyond blockchain technology itself, as the use of Algorand can drive innovation and enable developers and entrepreneurs to create decentralized applications and financial products that have the potential to profoundly transform a variety of sectors.
