“Algorand’s consensus protocol, though, will generate a drastically higher throughput even on basic infrastructure, and in a truly decentralized way.” which is “necessary in a world in which companies like Visa process thousands of transactions per second,” Jing Chen, Algorand’s chief scientist, tells ThirtyK.
Algorand’s PoS consensus protocol also eliminates the need to resolve forks, which can occur in other systems when competing blocks from multiple users are verified.
To ensure that control is not concentrated in any individual or group, new lotteries occur for each step in Algorand’s consensus protocol. In contrast, “many existing PoS protocols have hidden forms of centralization,” Greenstein says. “They either force users to delegate their participation to a small group of delegates, or require delegates to lock up their stakes, thus skewing participation to those with more money.”
Even PoW, which aims to be decentralized, concentrates the power to control new block creation in a few large mining organizations, he adds.
Can PoS Replace PoW?
“Not only do we believe proof-of-stake protocols can replace proof-of-work, we believe they must,” Greenstein says. Therefore, Algorand will build its own cryptocurrency, and will provide an open, decentralized infrastructure on which developers may build their own apps or cryptocurrencies.
PoS in general isn’t perfect, however, according to some experts.
“While I wouldn’t rule out PoS as a solution to the energy and speed problems inherent to the PoW strategy, I’m skeptical that PoS will be the technology of choice,” says computer science professor Hein Meling at Lawrence Berkeley National Laboratory, on sabbatical from the University of Stavanger, Norway. Specifically, PoS’s greater complexity may compromise security.
Algorand says it is trying to eliminate such issues. “Development of pure PoS protocols hasn’t been viable before, but Algorand’s recent advances make it possible now,” Greenstein says.
