Algorand 2.0: What this means for Layer-1 DApps

Blockchain was first mentioned in the year 2008. Since then, a cloud of passion and love for this technology has shrouded minds from all sectors around the world. Every passing minute we see new use-cases being explored, and developers coming up with amazingly innovative decentralized apps or “Dapps” as we call it, on various blockchain platforms.

The Advent

One such innovation took place within the walls of MIT, by cryptography pioneer and Turing award winner, professor Silvio Micali, when he used the VRF (Verifiable Random Function) and zero-knowledge proof algorithm to solve the “impossible blockchain trilemma” in which we have to compromise on either Scalability, Security or Decentralization. Algorand is an alternative Blockchain which has been built from scratch, from the first principles. It displays the power of cryptographic sortition and how it can make proof of stake more secure and stable by introducing the Pure Proof of Stake (PPoS). Algorand uses input and output to select the leader and the selected verifiers (SV) for each step of the Byzantine Agreement.

If you are interested in learning how Dr. Micali’s Algorithmic Randomness solves this trilemma, I recommend you read the whitepapers. 

Algorand, with a vision of a truly borderless economy, is built on 5 pillars,

  • decentralization

  • inclusiveness

  • full & fair participation

  • sustainability

  • evolving ecosystem

Algorand has come a long way since its inception and release of the first open-source code.  Since then, it has launched developer resources and SDKs to support multiple languages and has started a global university program with an aim to expand the decentralized network. The circulation of algos then followed across 10+ exchanges on a platform that delivered on its promise of security, efficiency, network protection, scalability and high network performance with blocks < 5 seconds latency.

Now Algorand has introduced new financial tools, new transaction types, and new use cases in the much-awaited ALGORAND v2.0.

The Second Generation

The key features of Algorand 2.0, are as follows:

  1. Algorand Standard Asset, which offers customizable options during an asset transaction, and enable any kind of fungible and non-fungible tokens to be issued. It also enables one to control the level of authority of an actor, thereby giving full ownership of the asset.

  1. Atomic Transfer, means the reliance on hash time-locked contracts will no longer be required and hence offers a secure way to simultaneously transfer assets among many different parties at an incredibly low cost of execution. 

  1. Algorand Smart Contract, that offers fast, secure and extremely low-cost cross-chain atomic transactions with regulated disbursements. This also has the ability to offer interfaces with oracles and other off-chain data providers.

As we know, the Blockchain revolution started with Bitcoin, with its PoW consensus algorithm as the 1st generation Blockchain, which was followed by Ethereum with its Smart Contracts and tokens as Generation 2. Generation 3, 4 and the much talked about Blockchain generation 5 are all talking about thousands of TPS and smaller block sizes.

However, the flexibility of the layer 1 smart contracts that Algorand offers will furnish added trust on the ownership concept of assets, along with the ability to regulate new use-cases making the overall ecosystem fair and secure.