Algorand and The Blockchain Trilemma - Steemit Crypto Academy - S5W4 - Homework Post for @nane15
Hello All Steemians !!!
Today I'm going to make my Steemit Crypto Academy Homework task by professor @nane15 that talking about Algorand and The Blockchain Trilemma. Very interesting lessons. Actually I have very little knowledge about this, but I will try to discuss it to improve my writing skills. On this occasion I will try to discuss it.
What is Algorand Blockchain?
Algorand is a blockchain that is present in the cryptocurrency ecosystem created by developers that have a good reputation for overcoming the problem of blockchain trilemma which is currently still lacking in the blockchain system and governance. Algorand is an innovation and development that aims to achieve and produce a blockchain that has 3 characteristics of decentralization, security, and scalability. The presence of Algorand is expected to provide a very useful blockchain for all users and show a new color for the cryptocurreny ecosystem.
In this regard, the main factor and important point that the Algorand blockchain has is the use of PPoS as its consensus protocol mechanism. This consensus protocol mechanism shows a very good performance where the process will run with 2 phases sequentially. Phase 1 runs using the PoS principle where the creation of a new block will be proposed by the user and phase 2 runs based on a Byzantine agreement where the creation of a new block is carried out after the voting is completed by the user in Algorand blockchain.
Algorand blockchain have three types of smart contracts as follows:
- Stateless smart contracts
This smart contract functions in the process of signing and validating transactions that occur on the network between the 2 users. - Stateful smart contracts
This smart contract functions to store important information and transaction data that occurs on the network between the 2 users. - Algogeneous smart contracts
This smart contract is a combination of the functions and characteristics of the previous 2 smart contracts.
What is PPoS?
PPoS is a consensus protocol mechanism that runs on the Algorand blockchain. The use of PPoS aims to improve the quality of the blockchain and fix the problems that blockchain currently has by increasing the decentralization system, having a high level of security and being able to produce high scalability. In this case, ALGO holders on the Algorand network play an important role in the system and governance of the Algorand blockchain where they act as validators on the network. Therefore the way PPoS works is to use 2 phases in the transaction validation process and create a new block to the Algorand network.
Phase 1 is proposal block. The PPoS consensus protocol mechanism works to generate block proposals based on transaction validation performed by validators. ALGO holders in the Algorand network will be selected based on the number of ALGOs owned. This election uses a cryptographic system that shows a decentralized and transparent system. When several ALGO holders have been selected to be validators, then they have the responsibility to validate transactions that occur on the Algorand network.
Phase 2 is block completion. The PPoS consensus protocol mechanism works to finalize and create blocks based on the block proposals that have been proposed in phase 1. The ALGO holder or validator will cast voting rights regarding the blocks to be added under the Byzantine agreement to the network. In this case, if the number of votes that approve the block proposal is higher than those who disagree then the addition and creation of blocks will be carried out on the Algorand network.
Explain the advantages and disadvantages of PPoS
Advantages
PPoS has decentralized system where ALGO holders have full control over the assets and can be traded at any time without being blocked on the Algorand blockchain.
PPoS has a high level of security because it has 2 phases in validating transactions and creating new blocks on the Algorand blockchain.
PPoS has high scalability where the Algorand blockchain can process and handle multiple transactions quickly and efficiently.
PPos has high transparency by using a cryptographic system in selecting validators and preventing the possibility of whales controlling the governance of the Algorand blockchain.
PPoS is able to prevent possible hacking and abuse on the Algorand blockchain because it has a good blockchain system and quality.
Disadvantages
PPoS is a protocol consensus mechanism that is still new and does not yet have a high adoption rate in the cryptocurrency ecosystem. This means that PPoS still takes time to analyzed and does not yet significant disadvantages in managing blockchain. Over time, developers will find problems in PPoS that can be improved and developed in the future.
Do you think Algorand really solved the blockchain trilemma?
I think Algorand can solve Trilemma's blockchain problem with its system and governance. This is evidenced by the decentralized system of the Algorand blockchain which allows users to have full control over their ALGO assets and a system that has a high level of security and scalability by using the PPoS protocol consensus mechanism which has 2 phases in validating transactions and creating new blocks on the Algorand network. This shows that the Trilemma blockchain which previously had problems with losing one of the 3 characteristics of decentralization, security and scalability can be overcome and has been developed well so that it has a positive impact on the cryptocurrency ecosystem.
Do you think PPoS is better than PoW?
I think PPoS is better in terms of decentralization and transparency. This is because the PPoS selects validators based on the number of assets owned which reflects the power of users in influencing network decisions and governance. In contrast to PoW, which chooses a validator not based on the number of assets owned, so users who do not have power can influence network decisions and governance.
I think PPoS is better in terms of security and scalability. This is because the PPoS uses 2 phases in the transaction validation process and block creation on the network. This allows validators to work quickly and safely because the mining process can be carried out in short time intervals. In contrast to PoW, the validator works slower but is still safe because the mining process is carried out in a longer time interval.
Do you think PPoS is better than PoS?
I think PPoS is better in terms of asset management. This is because PPoS does not require users to block assets on the network for a certain period of time so that validators have more flexibility in managing assets on the network. In contrast to PoS, which requires users to stake and lock assets in the network for a certain period of time so that validators cannot manage these assets on the network anymore.
I think PPoS is better in terms of contributing to the network. This is because PPoS allows all users to contribute to the network without any power differences that can be used to control the network. In contrast to PoS, which only allows a few individuals or whales who have different powers from other users to contribute and can be used to control the network.
Explore and explain an ALGO transaction using algoexplorer.io
Here I will explore an ALGO transaction by visiting the website algoexplorer.io
On the main page, I will find all information and data about the Algorand blockchain such as latest block, circulating supply, total supply, online stake, ALGO price, market cap, block speed, TPS, transaction cost, account and transaction history chart.
On the next page, I will find the latest blocks and the latest transactions that are continuously updated which shows all the block creation and transaction validation processes that occur on the Agorand blockchain.
On the next page, I will find a continuously updated list of transactions where users can find this information and data for specific purposes.
On the next page, I will find all information and data about transactions that occur on the network such as transaction ID, block, timestamp, type, amount, sender, receiver, fee, first round, last round, sender balance, sender rewards, receiver balance and receiver rewards.
Carry out an analysis of the price of ALGO from the beginning of the year to the present
Based on the chart above, I can analyze that ALGO is a good token that has potential in the future. This is evidenced by the fact that ALGO price movements from January to December 2021 experienced a significant increase even though it had decreased for 3 months. The price of ALGO going up and down has become commonplace in the market due to its volatile nature and may also be affected by the bitcoin and altcoin season in the cryptocurrncy world. The price increase from $0.31 to now $1.51 indicates a good development in the cryptocurrency market. One of the factors influencing the ALGO market is the increasing adoption of the Algorand blockchain and its continuously improving development.
Based on the picture above, ALGO is ranked 20th on the crypto market list. The price of the ALGO is $1.51. Market cap is $9.547.783.571. Volume is $244.931.527. Circulating supply is 6.31B ALGO. This shows that ALGO has good fundamental analysis. This is inseparable from the presence of the Algorand blockchain in the cryptocurrency ecosystem which can solve the Trilemma blockchain problem with a system that has 3 characteristics of decentralization, security and scalability. In my opinion, ALGO is one of the good assets to be used as a long or short term investment in the cryptocurrency world.
Conclusion
Algorand is a blockchain that is believed to be able to solve the Trilemma blockchain problem which is currently still a problem in the cryptocurrency ecosystem. Algorand which has 3 characteristics of decentralization, security and scalability are the main factors that indicate the development of technology and the quality of the blockchain system is getting better. The presence of Algorand by using the PPoS protocol consensus mechanism which has 2 phases in the transaction validation process and the creation of new blocks in the network is an important point that makes it better than PoW and PoS. In my opinion, the Algorand blockchain and the ALGO token have great potential in the future for investment in the cryptocurrency world.