How Algorand Works?

Modified on Mon, 06 Feb 2023 at 01:29 PM

The distinctive point of Algorand to solve 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 has low complexity, to complete Peer-to-Peer exchanging safely and simultaneously.


For Layer 2, it’s 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 is to use 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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