Algorand Foundation’s E-book Sheds Light On Public Blockchain Anonymity

• Algorand Foundation researchers’ e-book explores “Pure Proof of Stake” consensus mechanism and VRF lottery.
• The Foundation’s member explains that the mechanism utilizes block proposal validation by 1000-member committees through votes.
• The member notes that anonymity in small dynamic committees safeguards against corruption, enhancing blockchain security.

Earlier today, the official account of Digital Communities Champion at Algorand Foundation tweeted the link to an e-book titled “Can a Public Blockchain Keep a Secret?” authored by researchers from Algorand Foundation, the University of Waterloo, the Columbia University, the University of Pennsylvania, the Algorand Inc. and the Boston University.

The Twitter account, HMD2V posted a screenshot featuring a list of publications co-authored by researchers from Algorand Foundation to highlight the Foundation’s commitment to blockchain development.

HMD2V identifies a common denominator amongst all the publications, which is the Algorand blockchain’s consensus mechanism, also called the “Pure Proof of Stake.” Within the mechanism, during each round, all nodes exchange their block proposals along with the outcomes of a “Verified Random Function” (VRF), which functions as a lottery ticket.

Moreover, the Digital Communities Champion noted that VRF is used across other blockchains and gave a shout-out to VRF creator and Algorand founder, Silvio Micali. Next, he begins to explain how the mechanism functions by highlighting that each node broadcasts its block proposal and corresponding VRF output to the entire network. This is followed by the network reaching a consensus on the “winning” ticket. The winning ticket further corresponds to the lowest VRF output among all the nodes.

HMD2V emphasizes that the probability of generating the winning VRF output increases with the amount of stake a node holds. This principle applies not only to block proposals but also to both committee rounds. Furthermore, attempting to forge or counterfeit a VRF output is not feasible since each output is accompanied by proof of correct execution, ensuring the integrity and authenticity of the process.

In addition, the Digital Communities Champion stresses on the network’s unpredictability and randomness in selecting winners provide significant security, making it challenging for adversaries to manipulate. Once consensus is reached, there’s no incentive for attackers to target the winner as the blockchain moves forward.

HMD2V concludes that the approach pioneered by the Algorand Foundation researchers enables the sharing and re-sharing of secrets within small dynamic committees. Participants remain anonymous until they erase their secrets, and the system can withstand up to a quarter of the participants being corrupted.

Algorand’s proof of stake consensus mechanism has previously also been recognized by Cardano founder Charles Hoskinson. Hoskinson had suggested that the blockchain should become a sidechain of Cardano, after Algorand’s CTO discussed the network’s future roadmap onTwitter.