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How Algorand Works

Modified on Tue, 24 Sep at 4:12 PM

The distinctive point of Algorand to solve the Blockchain Trilemma was done by operating the network in two layers. For Layer 1 or Base Layer, it will support token creation, NFT, and Smart contract that have low complexity, to complete Peer-to-Peer exchange safely and simultaneously.

 

For Layer 2, it is used for processing complicated Smart contracts. This layer will work in an Off-chain type and send a snapshot to be saved later on Layer 1 based on a chosen time. This method enables Algorand to expand its capacity to effectively support a large number of transactions.

 

For a Consensus Algorithm, Algorand uses a Pure-Proof-of-Stake system (PPoS), which uses a coin as a warrant exchanging with an opportunity to be selected as a validator, similar to the Proof-of-Stake. However, the difference is PPoS will have a really low ceiling in order for most users to be able to join a consensus system, leading to decentralizing authority and enhancing security at the same time.

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