Blockchain platforms and protocols can be 'pigeonholed' in many ways. For example, they can be divided into those that talk a lot and do little, and those that they do a lot and talk relatively little about themselves. I will not elaborate on the protocols from the first category (the list is quite long). Instead, I'd like to take a look at a very busy platform = Algoranda year has recently passed since the mainnet was released (June 2019). Since then, the Algorand team has released some fat extensions to the platform and protocol. The last one happened literally a few days ago, so this is indeed a good time to explain what Algorand offers as part of this change, but also a good time to refresh information about what Algorand as a platform has already provided before, what are the main use cases this platform, and what else should we expect in 2020 and beyond.
Algorand is a project founded by a professor at MIT = Silvio Micali = who is a Turing Prize winner in the field of cryptography. Most of the team is based in Boston and has strong university ties as well, I wrote more about their achievements in these articles among others, so I encourage you to read.
Algorand is one year old
(achievements in numbers)
Over the past year, the team has made several major extensions to the Algorand platform, which is based on the Pure Proof-of-Stake consensus protocol, these extensions include:
- Smart Contracts on layer-1, i.e. a very safe, fast and at the same time cheap approach to the smart-contracts concept. More on this I am writing here.
- Algorand Standard Assets, i.e. the ability to generate tokens that are built on the basis of the Algorand protocol, being built into layer-1, and benefit from the security and speed of this layer. More on that here.
- Atomic Transfers, that is, an integral, atomic approach to transactions. The ability to transfer ownership of many assets, tokens, at once, in such a way that either all of them are transferred or none. I wrote about what these functions are and what opportunities they open up, among others In this article.
- TEAL language, the programming language that the Algorand team designed and built made it the native language for their platform. The language is incomplete in Turing's understanding, and this is his forte. Why? Here I am giving a number of arguments.
- Algorand Co-Chains, that is, private chains based on the Algorand protocol that can simultaneously communicate with other private chains as well as with the public Algorand chain. It is interoperability inside the Algorand ecosystem. Warning! that's not all, we'll also be interoperable soon with platforms that have a different consensus protocol, such as Ethereum.
However, what interests me most about this project is its enormous pace of development. Not only throughout the year, they managed to release 3 packages of new functionalities (the part described above), but also significantly expanded their ecosystem. This protocol can really boast of dynamic adoption. Let's take a look at a few numbers.
- almost 400 companies and the organization builds or integrates its solutions based on Algorand. In this we have a series of solutions CBDC, i.e. digital currencies of central banks.
- Algo (Algorand's native Asset platform) is listed on 60 exchanges, including Coinbase, Binance or Huobi.
- 50 different assets is created on the basis of the Algorand protocol, from StableCoins such as USDC and USDT, to real estate tokenization (Props) or DeFi solutions such as StakerDAO / Blend, or Republic Note, i.e. a token of a fundraising platform that shares profit using a token.
- The platform is currently secured by over 500 knots, globally distributed. I think this number will continue to grow after the last expansion (fast catchup)
- Pond 50 Wallet providers builds or integrates with Algorand. Exchanges, Mobile Wallets and Hardware Wallets.
- 5 x SDKS, or Software Develoment Kits, packages for developers that make the life of programmers easier by creating an entrance gate for engineers of languages such as Java, JS, Go, Python or .NET. This is the adoption factor, the delay bomb. These SDKs have been around so far downloaded over 50k timesso "a few" engineers are already using these SDKs.
- Algorand is backed by some of the industry's top curators, including Coinbase or BitGo.
- Pond 300 ambassadors in 50 countries supports, represents and develops the Algorand ecosystem by organizing meetups, hackathons, writing educational content, creating video materials or developing Infographics and translations.
- and such a flavor at the end, there are rumors that the Marshal Islands, which decided to resist theirs CBDC on Algoranda (CBDC = Digital Currency of Central Banks) may not be one CBDC considering Algorand as a target platform. Time will tell, but there are rumors that 16 different central banks experimenting with the use of Algorand for his CBDC. Promising.
This is quite a lot for the production year of the Algorand platform. Huh? Let's see what the future brings, what the next year will bring. At the moment, we know that by the end of 2020, there is a chance for onboarding 10M on-chain users, and 1M trx / day. This would make Algorand a top platform. Certainly standing out from the top ten CMCs. We'll see, I used to judge by the results 🙂
Algorand, 3 more extensions
Coming to the essence of this article, Algorand announced in August (19 / VIII / 2020) that it introduces 3 major changes to its platform. Let's take a closer look at what these extensions are:
- ReKeying, i.e. a functionality that allows users to replace the private key without having to change the public address. Changing the key provides greater flexibility in the use of the keys and opens the door to use cases such as:
- mass migration of users from other platforms. Thanks to ReKeying, large, centralized platforms can migrate their users' accounts to Algorand, create accounts automatically on their behalf, and then give them the opportunity to take full control over such an account (by replacing the private key) in a safe manner and without the participation of third parties .
- Increasing the security level accounts. For example, you can "migrate" the private key from a mobile device to a dedicated hardware wallet (such as Ledger or Trezor), without the need to create a new account and migrate funds. Conveniently, and any number of times.
- Custodians of crypto funds (Custodians) can give their users the function of keeping coins in Cold walletwhile allowing them to keep one unchanging public key.
- Change address to Mutisig, or joining a given key as a key with access to funds on a smart contract.
- This is just a selected example .. Find out more here.
- Fast Couchif you are booting a node from scratch, you have to wait for the node to sync with the rest of the network before you can make transactions. Synchronization requires the node to verify every block in the blockchain history, which can take hours or even days, depending on how long the blockchain history is. J.If you are an application developer just looking to get started with the new protocol features, this is not ideal, precisely because of the required time, but also because of the required disk space. Fast Catch removes this restriction - you can choose how many blocks back you want to download. The rest will be available as a hash, and you can rewrite the entire story if needed. This makes it easier for programmers, but also for new node operators.
- stateful Smart Contracts, i.e. a kind of smart contracts with global memory. So far, ASC1, or Algorand Smart Contracts, on the first layer, provided the benefits related to safety, speed and mega-low costs that layer-1 offers for Algorand (they are built into this layer). However, these are smart contracts with limited functionality. In August 2020 Algorand extends smart contracts with the possibility of storing a global state, which can also be available from other smart contracts. This may sound quite mysterious (the following will tell you about it best film), but in general it greatly extends the possibilities of what can be built on the basis of the Algorand platform, importantly = the possibilities of what can be built in a decentralized way. In the previous version of the protocol, for example, it would not be possible to make a decentralized exchange, or a UniSwap liquidity pool, or even a voting system. Such a voting system requires that the results of voting are stored in an unmanipulated, transparent and undeniable manner - i.e. ON CHAIN. It is now possible and easily accessible.
The topic of Smart Contracts requires a broader discussion, so I will devote another article to it. Please visit mine Tweet if you want to receive information about my written content and movies video.
The subject similar to this article is discussed in one of the last films. If you would like to complete I can see please visit my YouTube channel. I try to talk about inaccessible topics of crypto and blockchain there 🙂 Evaluate yourself, example below - Algorand straight from the underground
What else is this team working on?
The amount of innovation this band has released over the past year is astonishing. In my opinion, this not only makes Algorand one of the leading application platforms DeFi, but also under Gaming, Real Estate Tokenization or CBDC.
But it is not everything. On the technical side, we should expect a few more thick topics, about which Algorand will expand its platform in the near future. Among others
- interoperability, i.e. communication for blockchain Algorand with other blockchains such as Ethereum, Tezos or Polkadot. Interoperability is a long topic. Many try to face it. But how to do it qualitatively remains a challengethat no one has ever lived up to (qualitative in my opinion means = decentralized + fast + safe)
- We also know that the Algorand team is working to increase further network speed and the transaction finality (immutable) parameter. Currently, Algorand operates approx. 1k trx / sec at finality= 5sec. The new target is 10k trx / sec and finality = 2sec. Although for today's needs and disposal of the network 1k trx / sec is fully sufficient, we should expect that as adoption progresses, the network will require higher bandwidth.
- Network management model. The Protocol and the Platform are currently managed by the Algorand Foundation. At some stage, we should also see a step towards decentralization when it comes to Gov Model.
- Even more functional smart contracts. Currently incomplete in the sense of Turing ASC1 (Algorand Smart Contracts Layer - 1) offers very high security and a lot of possibilities. However, we know that Algorand is working on language and smart contracts complete in the Turing sense, implemented on layer-2. On which you can program any calculations and dAppsy
- We also know that Algorandi Blockstack they are working on a programming language Clarity. A language that is simple and universal enough to possibly become a target language for the blockchain area, and other platforms will opt for adoption and programming interoperability through this approach. I initially look at this topic in the video below.
Czy Clarity and ASC-2 (smart contracts on layer 2) will it be the same topic or two separate threads? We'll find out soon, perhaps in early 2021.
In conclusion ...
A series of works on the platform enables more and more advanced applications. Algorand takes its assumptions very seriously decentralization x speed x security. So far, in my opinion, they manage to maintain a healthy balance when it comes to this blockchain trilemma - however adding newer and newer extensions to the platform, this task also becomes more and more difficult 🙂 At the same time, extending the platform is a necessary and inevitable task.
Blockchain platforms not only have to catch up with the current centralized giants (such as Amazon, Google or Microsoft), but they must ultimately turn out to be many times better than them in some respects, if they are serious about displacing these giants from even a fragment of the market.
So DEVELOPMENT and improving blockchain's platforms A MUST in this race. At the same time keeping them DECENTRALIZED nature is also A MUST, otherwise, the blockachain will lose its most interesting characteristics (resistance to censorship, transparency, no possibility of data manipulation, or security). So it is a very difficult task. In my opinion, Algorand is on the right side, but the competition is also not sleeping. I watch with interest what each month brings here.