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Algorand is a company implementing an open source public ledger and cryptocurrency payment system utilizing the Byzantine Agreement message-passing protocol to reach consensus among network participants.

Algorand is a company implementing an open source public ledger utilizing the Byzantine Agreement message-passing protocol to reach consensus among network participants. The Algorand protocol is still in the development phase and is designed to be a blockchain-based payments platform.


The developers of Algorand, including MIT professor and Turing Award winning Silvio Micali, have raised $64 million dollars in funding from venture capital firms including Pillar and Union Square Ventures. Stock investment in Algorand comes with an option for conversion into tokens.

Consensus mechanism

The consensus mechanism enabling the blockchain operates in one of two environments; permissioned or permissionless — similar to a proof of stake protocol. This allows minimal computation to be an honest block producer. The blockchain assumes that 2/3 of the block producers are honest and not adversarial or Byzantine.

Secret self-selection

Algorand is developing an approach to decentralized consensus that relies on secret self-selection in order to determine new block generators and validators.

Users run a verifiable random function based on a seed generated in the previous block to select a leader, who is in charge of proposing the next block, and members of a committee who are responsible for voting on the validity of that block. This cryptographic lottery results in a rotating, random selection of committee members who are self selecting. Committee members run the computation to see if they won the lottery trivially, and in secret so they do not reveal their identities until they pass their message, or vote to the network with a credential in the form of a digital proof or signature. This secrecy is intended to improve network resilience against committee member corruption from a malicious adversary by obfuscating the identity of the committee until after they have propagated their information to the network.

Player replaceability

The Byzantine Agreement process takes multiple steps, introducing a vulnerability where adversaries may corrupt committee members after they have revealed themselves in the first step. Algorand seeks to solve this issue by having each step in the Byzantine Agreement process performed by a player-replacable protocol in which the committee members are swapped out at each step in the protocol — making the adversary unable to predict the committee member in any step until after they have performed their task.

Forking probability

The probability of a fork in the protocol is estimated at 1/1,000,000,000 and therefore blocks can be considered final upon validation.

Network Assumptions

Security assumes an honest majority of 2/3 of online nodes. The protocol also makes a message propagation assumption whereby all messages reach honest users in a timely fashion.


Algorand does not incentivize or financially reward honest block generators for honest creation of blocks. This is a significant departure from the strategies employed by almost all major cryptocurrencies which reward in the form of minted coins given to block producing nodes in the network.


Critics of Algorand assert the assumption of 2/3 honest nodes may not be fulfilled if honest nodes simply go offline without a monetary incentive to stay online; this is known as the lazy validator problem. Other decentralized systems have maintained network integrity without financial incentives like BitTorrent, and some non-mining aspects of Bitcoin. Given the potential monetary incentive for adversarial nodes, the robustness of non-incentive based blockchains remains an open question.

Yongge Wang with his recent paper "Another look at ALGORAND" (May 11, 2019) says it is possible to fork Algorand even with 1/3 malicious users and possibility to bribe validators easily is not unrealistic.


June 10, 2021
Arrington Capital Launches $100m Algorand Ecosystem Fund
October 24, 2018
Algorand Secures $62M

The $62M comes from a broad global investment group representing the venture capital, cryptocurrency, and financial services communities.

February 16, 2018
Algorand announces $4 million in funding

Algorand announces $4M in funding from Pillar and Union Square Ventures.

February 2018
Algorand raises a $4,000,000 seed round from Pillar and Union Square Ventures.

Funding rounds




Georgios Vlachos

Nickolai Zeldovich

Rotem Hemo

Sergey Gorbunov

Further reading



Jing Chen, Silvio Micali

Academic paper

Algorand: Scaling Byzantine Agreementsfor Cryptocurrencies

Yossi Gilad, Rotem Hemo, Silvio Micali, Georgios Vlachos, Nickolai Zeldovich

Academic paper

Algorand’s Instant Consensus Protocol – Algorand – Medium

Georgios Vlachos

Blog post

Illuminating The Dark Age Of

Blockchain: Algorand

Ninos Mansor, Omar Yehia, Ninor Mansor (Arrington Capital)

Research Report

July 19, 2021

MIT Professor Raises $4 Million to Build a Better Blockchain

Stan Higgins

News article

Documentaries, videos and podcasts


CESC2017 - Silvio Micali - ALGORAND

Oct 16, 2017

FSR Event: Blockchain & the Future of Financial Services

May 10, 2017

Prof. Silvio Micali: A New Scalable and Secure Approach to Byzantine Fault Tolerant Consensus (169)

Feb 7, 2017




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