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Algorand’s Chief Cryptographer: Verifiable Random Function(VRF) is Key to Solving the Blockchain Trilemma

Algorand, the blockchain protocol founded by Silvio Micali, a Turing Award-winning cryptographer and professor of computer science at MIT, is undoubtedly among the most anticipated blockchain project in 2019. Sergey Gorbunov, chief cryptographer at Algorand that aims to solve the “blockchain trilemma” suffered by existing mainstream blockchains like Bitcoin and Ethereum, shared his insights into how Verifiable Random Function(VRF) helps solve the bottleneck of blockchain at 8BTC Boost’s recent AMA (“Ask Me Anything”) event, as part of the latest episode of Geekhub Global Online. Q: What is  Verifiable Random Function(VRF) ? How does it work? Sergey:  Verifiable Random Function (VRF) is a cryptographic primitive that maps inputs to verifiable pseudorandom outputs. That is, informally, once you fix a key-pair and an input X, a VRF produces a unique pseudorandom verifiable output. VRFs were introduced by Micali, Rabin, and Vadhan in  1999. Today the primitive is used in various cryptographic schemes, protocols, and systems. (For more technical details about VRF, please refer to this blog .) Q: How is VRF used in Algorand blockchain ? Sergey: At the core of the Algorand Blockchain is a fast Byzantine Agreement protocol. However, the agreement is not performed between all users in the network. Instead, it is confined to a small randomly chosen committee of users for each round. For each block, every user in the Algorand system performs a secret self-selection based on his/her VRF secret key. If the VRF value that the user obtains is less than some threshold, then the user is selected to serve on the committee to perform an agreement for the block. Q: What are the advantages of adding VRF to the consensus mechanism? Sergey: Adding VRF to the consensus mechanism allows to scale blockchain systems to support millions or  billions of users. This is because we can randomly sample a small set representing a population to make decisions and run consensus. Moreover, it allows to support very strong adversary models, where users secretly self-select themselves. No one knows who the selected users are, until they propagate their associated VRF outputs/proof pairs and messages that they wish to sign. Many PoS blockchains only supports “static or semi-dynamic” committees. Using a VRF, we can efficiently rotate a committee for every block. Any user in the system can participate and  consensus for any block. Simply put, VRF brings  great scalability and very strong security to  the consensus mechanism. Q: In the case of multiple candidate blocks, how to quickly reach the consensus within the group? How Algorand specifically deals with this problem? Sergey: The parameters of the cryptographic sortition mechanism are set to select several candidates (e.g. 20) for every block proposer. In practice, this means that a small number of users, not only one, will have an output to their VRF functions that falls within the “winning” range to be a block proposer. Each candidate then has to propagate their candidate block and “winning ticket” for the round to the network. The candidate with the lowest “winning ticket” is chosen as the block proposer. Therefore if some candidate block proposers are not online, they will not be part of the pool of candidates considered at the end. Q: How many users are required to sign for a block? Sergey: For every block, Algorand samples  a random subset of users to run  Byzantine Agreement for that block,  so the number of users that have to sign for the block  is approximately a couple of thousands. In addition,  Algorand can support  thousands of transactions per second. Q:  What is the current status of Algorand?  What is its goal in 2019? Sergey: We are currently working on  scaling the test network and improve it for pre- launch.  After we test it  even more with the broader community,we plan to show it to the public. The initial blockchain will have the basic transactional support and will show to the developers how  they can use the platform to build  interesting applications through APIs, menus  and develop tools. Algorand does not plan to run an one-time ICO like most other projects do. Instead, we have a continuous series of auctions that will be used to sell  a part of the currency. So most capital from auctions, however, will be used towards different stabilization mechanisms,  building a community and extending the blockchain.   About Alogrand Founded by cryptography pioneer Silvio Micali, Algorand aims to address the “ blockchain trilemma” with a platform that delivers decentralization, scalability and security. It intends to empower businesses and create a truly decentralized world through its first-of-its-kind, permissionless, pure proof-of-stake protocol. In October 2018, Algoand has raised $62 million in new funding. About 8BTC Boost’s Geekhub Global Online Geekhub Global Online,a global blockchain event featuring online courses and dialogues, is developed by 8BTC Boost. The event regularly invite experienced technology companies around the world to deconstruct blockchain technology online to deliver cutting-edge, high-quality blockchain technology content to the Geekhub technology community. Community members can also participate in live interactions to explore the emerging technology.

Algo Capital to invest $100M in promising firms created on Algorand Platform

Blockchain-centered venture capital group Algo Capital has launched a $100 million fund to invest and manage considerable capital in rising disruptors built on the Algorand decentralized platform over the course of next 10 years, according to a press release CoinReport received from Wachsman, Algo C... The post Algo Capital to invest $100M in promising firms created on Algorand Platform appeared first on CoinReport.

Boston-Based Algo Capital Launches $100 Million Fund

Rolling out a $100 million fund in a bear market is a bold adventure, but from the looks of it, the Algo Capital team is excited to capitalize on the high potential of cryptocurrency and blockchain projects. Algo Capital, a blockchain-focused venture-capital group, will invest in emerging disruptors looking to build on the Algorand decentralized platform over the next ten years. Founded by MIT professor, cryptography pioneer, and Turing Award winner Silvio Micali, the Algorand protocol is looking to gain traction as a decentralized platform at a time when many platforms are taking market-related beatings. CoinCentral connected with Algo Capital Managing Partners Arul Murugan and David Garcia, and Algorand CEO Steve Kokinos. Funded with $100 million, what does the ideal Algo Capital portfolio composition look like? Is there pressure to onboard projects early so that the Algorand network can be more quickly developed? We are looking to start investing as soon as the Algorand main net is launched. This is scheduled for late Q1. In the meantime, we are in the process of conducting due diligence with several companies. We believe that adoption and users are key to creating and capturing value, so in the initial phase, we will focus our portfolio in startups with a proven product-market fit and with real traction to bring users. We will be investing in high-quality infrastructure projects, as well alongside the applications. As part of Phase 2, we are looking to invest in earlier-stage projects and work closely with incubators and venture labs across the globe. Moreover, we will have a huge exposure to Algos, the native coin of Algorand, which we will strategically manage. Of the capital invested in startups, we are looking to deploy 10% of it in Algos and the remaining (90% more) in USD. Furthermore, we are looking to use the remaining Algo holdings to participate actively in the network by running a node in the initial bootstrapping phase and staking them to generate further rewards for the fund. What does the decision process look like for funding proposed projects? Walk us through from pitch-decks to product launch. Conducting a very critical due diligence process at the current early stage of the technology is fundamental. There is currently significant noise regarding all the different applications promised by this technology. That being said, we will also focus our decision process at the beginning mainly in use cases where the current state of blockchain technology has proven usability. We are going to be extremely focused on product and not just technology. Team, product market fit, and the ability to scale will be three key aspects in our evaluation and decision-making process. In addition to the business review, we will engage in deep technical due diligence led by our CTO. Centralization vs. Decentralization in the application stack, economic model, and blockchain use will also be part of our decision process. We will have an investment committee which has to approve every investment. After the investment has been made, one of the partner in Algo Capital will be actively involved in the startup as a board member or a role that is appropriate to help them gain market traction and achieve growth. Why does Algo Capital intend on initially focusing on fintech applications for the Algorand Ecosystem? Our initial focus is in fintech applications for two main reasons. First, blockchain technology is naturally poised to significantly disrupt financial services and secondly, Algorand is a natural fit for tackling financial service use cases through its embedded financial primitives that are embedded into the protocol. This will allow, for instance, asset issuance with many specifications through the simple use of opcodes without the need to use complex and inefficient smart contracts.  We believe Algorand will power major capital markets in the future thanks to these features. How does Algo Capital separate the wheat from the chaff when looking at proposed projects. Are there absolute “must-haves” a team or technology requires for consideration? Alternatively, what are the red flags you see most often holding back blockchain projects from funding? As previously mentioned, product market fit and ability to scale are the key aspects we look for in companies. Having a strong team that can execute and deliver is going to be the absolute must-have. Major red flags for us include not having a minimum product-market fit validation, enforcement of blockchain technology to solve problems that can be better addressed with other solutions, and teams without a clear vision nor the ability to execute on it. In such a nascent industry it seems that investment funds are increasingly required to participate and guide their portfolio projects. How involved will Algo Capital be in the projects they invest in and support? All four partners of Algo Capital are former technology entrepreneurs, and our CTO has a vast and proven expertise in blockchain technology for several years. We are looking to roll our sleeves and help our portfolio companies actively in bringing customers / users and driving adoption. We look at our role as a value-add partners to our portfolio companies. Additionally, Algo Capital’s ecosystem status puts us in a privileged position to defend our investments by leveraging our close relationship with Algorand and the rest of the major players of the future ecosystem. Can you expand on what the Algo Capital blockchain laboratory will provide to developers and entrepreneurs? What advantages does the blockchain laboratory hope to give its users outside what they can achieve on their own? Our Partner and CTO Pablo Yabo is also the founder and director of Coinfabrik, one of the biggest Blockchain labs in Latin America and around the world. They have been working with different blockchains and deep tech since 2013. He is now leading a spin-off of Coinfabrik that will exclusively focus on Algorand technology. The lab will be working closely with the Algorand team and with external companies. This Lab will be called AlgoFabrik; Pablo and his team will be able to share more information about this project soon. AlgoFabrik will be a close partner to Algo Capital helping our companies navigate the technology challenges and providing technical advice to the fund in its investment decisions. AlgoFabrik’s deep insights into the roadmap and the technology development of Algorand will allow Algo Capital to timely identify important developments and trends when looking for investment opportunities. In the future, if Algo Capital is able to successfully bootstrap the Algorand ecosystem, will the fund look for opportunities to support the blockchain community outside of Algorand? Based on our underlying belief that Algorand is the right technology for business and mainstream adoption of blockchain, we are looking to deploy and manage capital for the next 10 years focusing on companies that are leveraging the decentralized economy powered by Algorand. This doesn’t mean that the companies of our portfolio will be restricted to use other blockchain technologies if that make sense for their business interests and goals. Let’s assume I’m a budding blockchain developer… Why am I am most excited to build in the Algorand ecosystem as opposed to other interoperability solution like Cosmos or Tezos? First off, Algorand is focused on not only enabling and supporting the community of developers focused on blockchain, but also the broader community of developers around the world working on a variety of platforms, languages, and programs. At Algorand, we have a vision for the future that is very different than other interoperability solutions. Second, in terms of our developer community, our focus is on simplicity.  Developers, both those who are experienced with blockchain and those who are new to blockchain, will find that we have robust developer APIs, content, and tools to ensure that building on Algorand is as clear, fast, and easy as possible.  These programs will make it straightforward for developers to both assist in transitioning legacy business processes to blockchain as well as building new layer two products on top of Algorand. (For Steve Kokinos) Coming from a long-term success with Fuze, what lesson from your experience there has best transferred over to your work with Algorand? Successful businesses have to create a balance between technical and business excellence.  At Algorand we have taken the revolutionary technology developed by our Founder Silvio Micali and a team of leading experts in cryptography, theory, mathematics, distributed systems, and engineering, and combined that tech with exceptional execution and go-to-market capability in our business team. Any company will suffer if the tech is leading edge and the business execution is only average.  We solved that at Fuze, and I like to think we have solved it at Algorand as well. (For Steve Kokinos) Alternatively, what’s a unique challenge that a blockchain based project like Algorand faces compared to other more traditional cloud-based infrastructure. Blockchain represents a fundamental shift in the way people transact and exchange value.  Like the cloud, we certainly expect that businesses will want to move various standard processes to blockchain protocols for the efficiencies it provides.   However, at Algorand, we are building foundational technology that will significantly increase the number of individuals who can access meaningful economic opportunity, and build economic opportunity in a truly borderless and decentralized economy.   The post Boston-Based Algo Capital Launches $100 Million Fund appeared first on CoinCentral.
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New Cardano (ADA) Ouroboros Research Paper Details Proof-of-Stake Sidechains from the IOHK Team

The scalability problem has remained one of the largest issues that cryptocurrencies have to resolve before going mainstream, and different projects have attempted to handle it in different ways. According to a paper recently published by a team of researchers, Cardano (ADA) might be one of the first projects to come to a temporary solution. The paper outlines the structure of a sidechain construction that is fully compatible with Cardano's Ouroboros system. It is also compatible with other PoS (Proof-of-Stake) systems, including Snow White, Algorand, and others. According to researchers, this is the first paper of this kind, and it was published by IOHK team, including Aggelos Kiayias, Dionysis Zindros, and Peter Gaži. The paper is called “Proof-of-Stake Sidechains,” and it was posted on December 31st, 2018. Cardano's Charles Hoskinson was quick to announce the news, pointing out that this marks a significant milestone in otherwise crypto-unfriendly 2018. Proof of Stake sidechains! And we got it out before the end of the year — Charles Hoskinson (@IOHK_Charles) December 31, 2018 How does the paper affect PoS systems? Simply put, sidechains are small-sized blockchains that are connected to a larger blockchain by means of a two-way peg. This connection allows the sidechains to communicate with the larger blockchain, and improve scaling, interoperability, and other features. Also, they can serve as test-chains for any and all upgrades that developers may come up with in the future. The paper proposes several innovative changes that are bettering the concept of a sidechain network. The changes in question include the addition of a new firewall, a PoS-compatible structure, a new pegging method, and a way to mitigate sidechain attacks. Generally speaking, it focuses mostly on improving security and making the network more practical and easy to use. As mentioned, it is of a massive significance to Cardano, but also to other PoS systems. Researchers have also stated that their new sidechain network construction can support secure cross-chain transfers, while it also maintains the firewall even in cases of one-sided failures. That way, all potential damage will be contained in a chain that was violated in the first place, while the rest of the network remains safe and isolated. This marks a significant milestone for Cardano, and it indicates a bright and prosperous future for the project. Meanwhile, Hoskinson has published another tweet, this time on January 1st, in which he looks back on the previous year, and what it meant for Cardano. Here's my end of year overview on Cardano in case you missed it: — Charles Hoskinson (@IOHK_Charles) January 1, 2019 In the attached video, Hoskinson talks about difficulties in creating Cardano, and making an “open document that's mostly aspirational into execution.” Most of 2017 and 2018 were dedicated to achieving this, although Hoskinson predicts that it will likely take at least three to five years before Cardano development reaches the conclusion of what the team has planned, for now. This supports the overall opinion that Cardano is still in its early days. Despite this, the coin has already grown to be very successful, and it is counted amongst top cryptocurrencies of 2018. It is still unclear what will the project look like once it reaches its final stages, although many investors see it as one of the coins of the future. While there is still no certainty when it comes to anything that is crypto-related, Cardano's progress seems to be moving ever-onwards.
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Prominent Venture Capitalist Fred Wilson Says Crypto Investors Will Not Have It Easy In 2019

The co-founder for Union Square Ventures, Fred Wilson published a blog post on New Year’s day titled “What is going to happen in 2019”. In that, he discussed varied topics such as bearish stock markets, a weakening economy, global financial issues, cryptocurrencies and more. The following statement by him set a tone for the rest of the blog post. “I believe and have been telling those around me that I think 2019 will be a “doozy.” I think we will see major dislocations in the leadership of the United States, a bear market in stocks, a weakening economy, a number of issues with the global economy including a messy Brexit and a sluggish China. All of this will lead to a more cautious stance by investors in the startup economy. And crypto will not be a safe haven for any of this although there will be signs of life in crypto land in 2019.” He thinks that we are in the process of finding the bottom of the large, liquid, and lasting crypto-tokens. However, he thinks that process could take much of 2019 to play out. In his opinion, we might see some bullish runs, followed by selling pressures taking us back to retest the lows. The bottoming out process is expected to end in sometime 2019 which will be followed by a bullish run. He added: “Specifically, I think we will see some big name projects ship, like the Filecoin project from our portfolio company Protocol Labs, and the Algorand project from our portfolio company Algorand.” The venture capitalist thinks that we will see a number of “next gen” smart contract platforms ship and challenge Ethereum for leadership in this super important area of the crypto sector. He also expects the Ethereum open source community to ship a number of important improvements to its system in 2019 and defend their leadership in the smart contract space. To conclude, he said: “There will also be pressure on the crypto sector in 2019. The area I am most concerned about are actions brought by misguided regulators who will take aim at high-quality projects and harm them. And we will continue to see all sorts of failures, from scams, hacks, failed projects, and losing investments be a drag on the sector.” Although, that is always the case with emerging technologies that allow anyone to set up shop and get going. Permission less innovation produces the greatest gains over time but also comes with the inevitable bad actors and actions.
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Algorand news by Finrazor


Algorand is a new cryptocurrency and consensus protocol. Its two core technologies are the binary Byzantine Agreement and cryptographic sortition. Algorand’s main difference from other proof-of-stake systems is the absence of economic incentives for network participants, hence the viability of Algorand is currently a subject to wide debate in the community

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Warren Buffett invests $600M, Coinbase is worth $8B, StarkWare acquires $30M, USD issues over $125M in investments, NXMH obtains Bitstamp, Algorand receives $62M, Thailand alerts against investments in ICOs, Ripple confirms the institutional investments growing, Kevin O’Leary invests $100M, Nouvive provides an investment observation, OK Blockchain Capital conducts an Investment Sentiment Survey, Steve Wozniak discusses his BTC investment

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Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust

Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust Digital currency investment group Grayscale confirmed it had successfully launched its latest fund, dedicated to Stellar’s Lumens (XLM) token, in a tweet Jan. 17. Grayscale, which now operates nine cryptocurrency funds, timed the move to coincide with a change of image for its products, renaming all its […] Cet article Grayscale Adds Stellar as Latest Cryptocurrency Investment Trust est apparu en premier sur Bitcoin Central.
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Researches from MIT, Stanford Set to Replace Bitcoin with Their Groundbreaking Crypto Project

CoinSpeaker Researches from MIT, Stanford Set to Replace Bitcoin with Their Groundbreaking Crypto Project Until now, everybody has been talking about Bitcoin, the most popular and widely used digital currency. However, Bitcoin is unable to process thousands of transactions a second. Researchers from the Massachusetts Institute of Technology (MIT), UC-Berkeley, Stanford University, Carnegie Mellon University, University of Southern California, and the University of Washington have decided to fix such a weakness and develop a crypto asset better than Bitcoin. The researchers are working together as Distributed Technology Research (DTR), a non-profit organization based in Switzerland and backed by hedge fund Pantera Capital. The first initiative of Distributed Technology Research is the Unit-e, a virtual coin that is expected to solve bitcoin’s scalability issues while holding true to a decentralized model and process transactions faster than even Visa or Mastercard. Babak Dastmaltschi, Chairman of the DTR Foundation Council, said: “The blockchain and digital currency markets are at an interesting crossroads, reminiscent of the inflection points reached when industries such as telecom and the internet were coming of age. These are transformative times. We are nearing the point where every person in the world is connected together. Advancements in distributed technologies will enable open networks, avoiding the need for centralized authorities. DTR was formed with the goal of enabling and supporting this revolution, and it is in this vein that we unveil Unit-e.” According to the press release, Unit-e will be able to process 10,000 transactions per second. That’s worlds away from the current average of between 3.3 and 7 transactions per second for Bitcoin and 10 to 30 transactions for Ethereum. Joey Krug, a member of the DTR Foundation Council and Co-Chief Investment Officer at Pantera Capital, believes that a lack of scalability is holding back cryptocurrency mass adoption. He said: “We are on the cusp of something where if this doesn’t scale relatively soon, it may be relegated to ideas that were nice but didn’t work in practice: more like 3D printing than the internet.” The project’s ideology is firmly rooted in transparency, with a belief in open-source, decentralized software developed in the public interest with inclusive decision-making. The core team of the project is based in Berlin. To solve the scalability problem, DTR has decided to develop the Unit-e with parameters very close to Bitcoin’s design, but many things will be improved. Gulia Fanti, DTR lead researcher and Assistant Professor of Electrical and Computer Engineering at Carnegie Mellon University, commented: “In the 10 years since Bitcoin first emerged, blockchains have developed from a novel idea to a field of academic research. Our approach is to first understand fundamental limits on blockchain performance, then to develop solutions that operate as close to these limits as possible, with results that are provable within a rigorous theoretical framework.” The launch of the Unit-e is planned for the second half of 2019. Researches from MIT, Stanford Set to Replace Bitcoin with Their Groundbreaking Crypto Project

BitPay CEO Says Bitcoin Is Solving Real Problems Around the World

BitPay co-founder and CEO, Stephen Pair, has recently commented that Bitcoin (BTC) is solving several issues around the world. He said that in a press release uploaded a […] The post BitPay CEO Says Bitcoin Is Solving Real Problems Around the World appeared first on UseTheBitcoin.
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Trillion Dollar Market Cap, Ethereum Chain Splits & Stellar Lumens Fund - Crypto News

In this video, Mattie gives you the latest bitcoin and crypto news. He talks about the ethereum chain splitting, BitGo CEO Says Institutional Money in Crypto Can ‘Easily’ Reach Trillions of Dollars, and a new Stellar Lumens fund. This is a daily segment! ----------------------------------------------------------------------------------- CHECK OUT OUR PODCAST: New episode every Monday and Friday! ----------------------------------------------------------------------------------- Check out Altcoin Buzz Ladies! ---------------------------------------------------------------------------------- Connect with us on Social Media: Twitter: Facebook: Telegram: ---------------------------------------------------------------------------------- Looking for the best cryptocurrency wallets? Check these out: BitLox: CoolWallet S: Trezor: Ledger Nano S: KeepKey: Read about them here: --------------------------------------------------------------------------------- References: Leading Crypto Asset Manager Grayscale Launches Stellar Lumens Trust Crypto Investment Firm Grayscale Launches Fund Dedicated to Stellar Lumens (XLM) Grayscale Tweet Grayscale BitGo CEO Says Institutional Money in Crypto Can ‘Easily’ Reach Trillions of Dollars As Company Launches Cold Storage Trading Crypto’s Billion-Dollar Theft Problem Prompts Safer Way to Trade Ethereum Chain Splits, An Estimated 10% of Miners Stay on Constantinople Ethereum Upgrade – Constantinople Hard Fork Delayed VanEck to Nasdaq: Bitcoin Market Structure Expected to Improve in 2019 Nasdaq Tweet -------------------------------------------------------------------------------- DISCLAIMER The information discussed on the Altcoin Buzz YouTube, Altcoin Buzz Ladies YouTube, Altcoin Buzz Podcast or other social media channels including but not limited to Twitter, Telegram chats, Instagram, facebook, website etc is not financial advice. This information is for educational, informational and entertainment purposes only. Any information and advice or investment strategies are thoughts and opinions only, relevant to accepted levels of risk tolerance of the writer, reviewer or narrator and their risk tolerance maybe different than yours. We are not responsible for your losses. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence and consult the financial advisor before acting on any information provided. Copyright Altcoin Buzz Pte Ltd. All rights reserved.
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