Technological Breakthroughs Dislodge Entrenched Beliefs.
Many long-held beliefs are often unchallenged and not true; they are simply a resignation to the status quo. At Algorand Technologies we take nothing for granted. You won’t find us defaulting to artificial limitations. Instead we develop technological breakthroughs that free our industry from traditional thinking, accelerating innovation for the benefit of everyone.
Below are just a few examples that were developed for the Algorand public chain. These technological breakthroughs can also be applied to permissioned chains, and achieve faster speeds and greater performance with the right hardware and connections.
The blockchain trilemma, a term originally coined by Ethereum co-founder Vitalik Buterin, refers to a long-held industry belief that no blockchain could be simultaneously scalable, secure and decentralized. This belief artificially limited the design of all blockchains at the time. This was not good news given that all three of these properties are critical for blockchain success.
We did not dispute the validity of the blockchain trilemma. We simply proved it wrong, by our technological breakthroughs, at the very launch of Algorand in 2019.
Algorand’s unique consensus mechanism enables unprecedented scalability; scalability in consensus participation, and scalability in transaction processing.
Currently, Algorand blocks are produced in less than 3 seconds with instant finality. The network can process 10,000 transactions per second, and at a cost of a fraction of a cent per transaction.
These are not just “basic payments”. Algorand can in fact process thousands of multi-party smart contracts per second.
Traditional blockchains typically consider only protocol attacks in their security, despite the fact that blockchains are executed on an underlying communication network, which can also be vulnerable.
For example, in some chains, by just temporarily partitioning the communication network, an adversary can fraudulently acquire assets without properly paying for them. This attack can succeed without the need to corrupt any protocol participants. In fact, this can happen when all participants are honest and scrupulously follow all protocol rules.
This is why we designed Algorand to be secure against both protocol attacks and network partition attacks. We believe that security at the network level will be increasingly important. Today, adversaries are happy to exploit software bugs. But once these are all fixed, one can expect that they will turn their criminal intent to the communication network level.
Many blockchains, based on delegated proof-of-stake, call themselves decentralized, but delegate consensus to a restricted set of players. Others, nominally allow anyone to participate, but in effect restrict participation by requiring expensive computing equipment to participate in consensus.
By contrast, Algorand does not simply “allow” anyone to participate in consensus, but actually enables anyone to participate by requiring reasonable computing equipment. And it achieves this without sacrificing performance; even if hundreds of millions of people choose to participate in its consensus, Algorand continues to produce blocks every <3 seconds.
Decentralization is also a form of security. The more nodes that participate in consensus, the more impenetrable the chain. And when performance is not affected by increased participation, it’s a clear win.