Algorand and the blockchain Trilemma ||Crypto Academy / S5W4 - Homework post for prof @nane15

in hive-108451 •  5 months ago 

Am happy to be part of this wekk lecture,it's obvious it's a continuation of what we treated in the last lesson which was Blockchain Trilemma. Am glad we decided to consider Algorand blockchain as one of the viable solution to Blockchain Trilemma. I went through he lecture and below is my entry.

What is Algorand Blockchain?

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Algorand has become an household name is such a very short period of time and that is because of the unique feature in brought into the blockchain space which is the a little to solve the blockchain trilemma issue we explore in the last lesson taught by our dear Prof. @nane15 .

It's an open source network that is both decentralized and permissionless such that anyone is allowed to come build on it, it is designed to be a network used for facilitating payment with speed and at remarkable scalable rate such that it can process 2000 transaction per second and also finalize every transaction in 5 seconds. This network was launched in 2019 by Silvio Micali, a computer expert and a MIT professor.

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The drive behind his invention is to solve the long standing issue blockchain has experienced over the years which is know as "Blockchain Trilemma" which talks about the Decentralization, Scalability and Security of a blockchain which seem unrealistic for a single blockchain to achieve before Algorand came on the scene to solve the issue seemlessly using the PPoS consensus algorithm which is know for it democratic nature where everyone has a voice on the network by staking a minimum of 1 ALGO

It's also important to mention that the algorand blockchain is regarded as a third generation blockchain which is unlike the other blockchain like Bitcoin and Ethereum which is configured with the PoW consensus mechanism.
Algorand also allow DApps ,decentralized apps to be hosted on their network,providin them with high scalability and low gas fee. In addition to all these benefits gotten from the ALGO platform, one can also create token using ASA (Algorand standard Asset) in the algorand ecosystem.

What is PPos

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Pure proof of state is a consensus mechanism that I can refer to as an improved version of the PoS. In this concensus mechanism everyone has a level of influence based on his stakings and can vote and propose a new block.It's unlike the PoS where some set of people becomes so influential even to the detriment of others as a result of the size of their stakings on the network such that control the system and deprive other is with low staking power . Although you're required to stake here but then the system is so even and transparent such that everyone has the chance to either vote or propose a block without sentiment. The selection is random. Although the chances of being selected to a large extent depends on the staking of user. Algorand has so much design the system such that it is very impossible for someone with a substantial amount of staking to be so powerful to the extent that he totally controls the system.

If you as a user wants to partake of the voting and proposing of new block,you must have staked your coin. It is one of the prerequisite in the first place. You then get a key which enables you to participate in the voting a d proposals process. It is important to me too at this point that there is another actor called the relay node that coordinates all these activities even after a block leader is secretly selected to propose a block. It is at this time that voting commences by those who are eligible to participate. Participants are also selected at random to verify the block.If the verification process turn out to be successful,it is added to the blockchain but if now it is dismissed and then the process starts again with another Block leader who proposes a new block.

Advantages and disadvantages of PPos

Advantages.

- PPoS is one of the brain behind the solution of blockchain Trilemma.

With PPoS the as algo consensus mechanism,we could see a viable solution to the scalability,security and Decentralization issue blockchain has face in time past.

- PPoS mechanism is seemless.
This system is very simple when use to create and validate new block on the blockchain,one will not need to solve complex mathematically problems birth a new block on the blockchain.

- Low cost of becoming a Participant node.
You only need to stake as little as 1 ALGO to become a participant move on the network which allows you to vote or propose a new block.

- Swift transaction
This mechanism is designed in such a way that it promote switch and seemless transaction on the network.

- Consumption of less Energy.
PPoS consume little energy in being functional when compared to other consensus mechanisms like POW and the likes. And the is why it is preferred.

- No need for highly Sophisticated and expensive Equipment.
You don't need the kind of expensive equipment used in powering consensus mechanisms like Pow especially in the aspect of mining new block,it is needless here as this is a third generation blockchain that was build to thrive without these equipment that

Disadvantages.

- Risk of bringing in wrong Participant.
It is possible to bring in wrong Participant since it is pretty easy to become one. With just a low staking fee of 1 ALGO, one could bring in a malicious fellow into the system.

- There is system is a bit loose
It is loose in the sense that no strict co do too are given to those who wrongly or maliciously cheat the system. Conditions such as denying participant of their reward or reducing it does not exist and this will on a way encourage malicious act.

- Poor Reward System.
The reward for apportioned to participant for every successful activity carried out is very small compared to other consensus mechanism like PoW..

Do you think Algorand Solve the Blockchain Trilemma. Explain your answer.

My answer to this is Yes. It solved the blockchain Trilemma problem. We I think I need to explain what these trilemma are in the first place..

  • Decentralization
  • Security
  • Scalability.

Algo has been able to capture and solve the problem associated with having these main feature on a blockchain by using it PPoS Mechanism which made it possible for the blockchain to be fully decentralized,having no central authority,everyone has a level of influence on the network, as long as he become a participant. He can vote and even propose a new block.

It is also highly scalable in that it can process 2000 transactions in a second unlike other blockchain (Bitcoin,Ethereum) with consensus like Pow which can hardly process 10 - 20 transaction in a second.

It is also very secured because of the way the system choose the one who produces or proposes a new block. Such person is picked at random and selection does not largely depends on how much has been staked by participants.

Do you think PPoS is better than PoW? Explain your a answer

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This is an emphatic YES,PPoS is way much preferable and better than the PoW consensus mechanism. PoW mean proof of work, and in this system the active actors here are called Miner and what they do is to work just as the name implies. They try to produce and confirm new block by solving complex mathematical problem which requires a lot of time and energy and resource which are naturally expensive. Sophisticated equipments and power are needed to successfully carry out these mining activity.

In PPoS the actors here are called participants (node) who becomes a participant by staking as low as one algo and then become eligible to vote, propose and verifying the formation of a new block. It requires less effort as we can see here and every participant on the network has a say.
Now tell me who wouldn't prefer a consensus mechanism where you don't have to rack your brain in solving some complex mathematical problems which requires a lot resources time and energy?

Do you think PPoS is better than PoS?

This is a big YES for me and I will like to analyse my answer below..

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PoS is a consensus mechanism where the key actor is called the validator,you stake here like the PPoS but the downside here is that your level of influence is proportional to how much you stake and this qualifies you to be a validator who is given preference above every other on the network. The system is not democratic enough as a result of the preference given to those who has staked substantial amount of coin.

Now to PPoS...I think I need to emphasize on the word "P" in front of the PPoS which distinguishes it from the "PoS" the "P" there stands for pure (without infiltration,nor malicious) which is enough distinction between the two consensus in question. In the PPoS every participant has a say,it is highly democratic and not segmental. A participant can vote,he can propose and can be chosen at random to verify a block.
With my explanation,I think,I've been able to convince you that PPoS is better,it's your best bet!

Explore and explain an Algo transaction using algoexplorer.io (Screenshot required)

For this task I will be using the algoexplorer.io to explain algo transaction.

Step 1: log in to the algoexplorer.io. The home page interphase below is what you get using your mobile phone

You can see some features like total supply, circulating supply,online stake,latest block and the others including the transaction chart.Just as highlighted in my screenshot

Step 2: When you scroll down you can also see the latest block available if you choose to explore,just as highlighted in my screenshot.

Step 3: Scroll down to click on the transaction which is our focus in this task.

Step 4:I clicked on the latest transaction amongst the list displayed just as highlighted in my screenshot.

Step 5: It brought out the details in the screenshot below.

Step 6: I scrolled down and clicked on More information and got the screenshot below.

Carryout an analysis of the price of Algo from the beginning of the year to the present. (Screenshot required.)

I will be analysing the price based on the result I go in the course of my research just as seen in my screenshot

We can see from the chart that price started with $0.33 as at Jan 01 and rose int he space of and then experience a spike in price ($1.68) within few months in "B" and then experience a serious correction in "C" with the price $0.82. Price moved back up as seen in "D" forming a double top with price $1.68 after the correction. There was another reversal donward at hat point which is logical for every double top formation to a price of $1.02 at point "E". Investors can in and pushed the price upward to $1.60 as seen in point "F". We then saw that the the law of demand and supply played out again at point "G" leaving the trend bearish for a while. At point "H" we could see that investor bought the bitten and made profit as price touches $2.30 and then a little corretioni at "I" with price coming down to $1.68 reversed bit to "J" touching $2.20 and then we can see how the law of demand and supply keeps playing out till as at the time of doing this(10/12/21)

The current price of Algo as at the time of doing this homework is as seen below

Conclusion

Algorand has proven beyond reasonable doubt that blockchain Trilemma which is far by a typical blockchain can be achieved. I believe it is one of the reason why it has seen remarkable increase in the blockchain space. Moreso I think developers should embrace the PPoS consensus mechanism which has played a better role in achieving this feat.

Thanks so much pro @nane15,I hope you find my entry interesting

Best regard
@lhorgic

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