Algorand Cryptocurrency Introduction

1. ALGORAND
CRYPTOCURRENCY
Ecommerce Security Course
Presented by: Atousa Ahsani
Professor:
Dr. Sadegh Dorri Nogoorani
Spring 2020
2020/05/18
Video Link:
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2. WHAT IS ALGORAND
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3. WHAT IS ALGORAND
An open-source blockchain-based decentralized network.
An efficient way to implement a public ledger
In 2017, Silvio Micali founded Algorand
Mobile App, Algorand Wallet
This approach is called Algorand
Because we use algorithmic randomness to select a set of verifiers
who are in charge of constructing the next block of valid
transactions
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4. MAIN MOTIVATION
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5. BLOCKCHAIN TRILEMMA
Algorand wants to have this all three elements and to fulfil what a
blockchain should really be.
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6. BITCOIN PROBLEMS
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7. BITCOIN PROBLEMS
Honest Majority of Computational Power
Computational Waste
Concentration of Power
Ambiguity
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8. ALGORAND APPROACHES
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9. APPROACHES
Decentralized
there is no powerful central authority or single point of control
Permissionless
Public and Open to all
Low Cost to Participate
Rewards
to encourage users to join to the network
rewards proportional to their stake for every block committed to
the chain.
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10. APPROACHES
Proof of Stake
The users’ influence on the choice of a new block is proportional to
their stake in the system
The amount of computation required is minimal.
Open Source
The Algorand node repository is open sourced and publicly
available for anyone to audit, use, and build upon.
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11. ALGORAND CONSENSUS PROTOCL
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12. CONSENSUS PROTOCOL
Consensus requires three steps to propose, confirm, and write
a block to the blockchain:
1) Block Proposal
2) Soft Vote
3) Certify Vote
In all three steps, VRF algorithm is used.
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13. VERIFIABLE RANDOM FUNCTION
A Verifiable Random Function (VRF) is a cryptographic primitive that
maps inputs to verifiable pseudorandom outputs.
A VRF is a triple of algorithms Keygen, Evaluate, and Verify.
If Y falls within a certain range [0,K]
for an account, means it is selected.
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14. BLOCK PROPOSAL
Steps:
1. Each node then executes the VRF
2. Selected node selects a group of transactions from its queue to
put into a block.
3. Propagates the block along with the VRF proof to other nodes in
the network
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15. SOFT VOTE
Steps:
1. Each node then executes the VRF
2. Each account chosen will filter the proposals down to one using by
choosing lower VRF hash.
3. Each node will validate the committee membership VRF proof
before adding to the vote tally.
4. Once a quorum is reached for the soft vote, the process moves to
the certify vote step.
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16. SOFT VOTE
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17. CERTIFY VOTE
Steps:
1. The VRF is executed third time
2. Selected accounts check the block proposal that was voted on in
the soft vote phase for overspending, double-spending, or any
other problems.
3. If valid, the committee votes again to certify the block.
4. These votes are collected and validated by each node until a
quorum is reached by a certain timeout.
5. Block will be written to the ledger.
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18. ALGORAND NETWORK
ARCHITECTURE
It Supports two types of nodes to simultaneously optimize for
transaction throughput and decentralization:
Relay nodes
Participation nodes
The difference
configuration only, not software.
The default install will set the node up as a non-relay node
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19. ALGORAND NETWORK
ARCHITECTURE
Relay Nodes
are used for communication routing to a set of connected non-relay nodes.
communicate with other relay nodes and route blocks to all connected non-
relay nodes.
Participation Node
are connected to relay nodes in order to participate in consensus.
They represent an address’ stake and hold participation keys for proposing
and voting on blocks.
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20. ALGORAND BLOCKCHAIN INNOVATIONS
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21. 1- BYZANTINE AGREEMENT
PROTOCOL
The Algorand blockchain uses a decentralized Byzantine
agreement protocol based on pure proof-of-stake (PPoS).
It can tolerate an arbitrary number of malicious users as long
as honest users (those that follow the instructions of the protocol)
hold more than two-thirds or 2/3 of the total stake in the
system.
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22. 2- PARTICIPATION
Every online user who has algos, can participate in proposing
and voting on blocks.
Using participation key
User's algos are secure even if their participating node is
compromised.
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23. 3- IMMEDIATE TRANSACTION
FINALITY
With PoW, there is a chance that two users could solve for a valid
block at the same time.
Fork
Should wait for a sequence of blocks to consider yourself paid
In Algorand, two blocks can never be added to the chain at once.
Never forks
All transactions are final
Once a block appears, users can rely on the transactions
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24. 4- SELF-SELECTION
All users are randomly, secretly, and continuously selected to
participate in the Algorand consensus protocol.
Every block in Algorand reveals a new unpredictable selection seed
that determines which users participate in the next round of block
selection.
An online user checks whether they were selected to participate by
evaluating a Verifiable Random Function (VRF) with their secret key and
the selection seed.
The more algos in an online account, the more chances for being
selected
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25. 5- PURE PROOF OF STAKE
In pure proof-of-stake, users are chosen to participate in the
protocol based on the stake (number of algos) that they have.
The VRF behaves similarly to a weighted lottery.
It is as if every algo in an account gets its own lottery ticket.
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26. 6- SCALABILITY
The Algorand protocol scales to billions of users,
Block Generation time is steady, 5 seconds.
Sustains a high transaction rate,
Without incurring significant cost to participating users.
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27. ALGORAND SMART CONTRACT
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28. SMART CONTRACT
Algorand Smart Contracts (ASC1)
Small programs
Written in an assembly-like language
Used as a replacement for signatures within a transaction
The language of Algorand Smart Contracts is named TEAL
Transaction Execution Approval Language
It is not turing-complete and does not support loops.
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29. SMART CONTRACT
Smart Contracts are useful in periodic payments and withdrawal limits.
Two basic usage scenarios:
As a contract account
A program for contract’s account.
As a delegated signature
A program for an existing account.
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30. DEVELOPERS DOCS
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31. ALGOEXPLORER
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32. Thank You