Algorand is a professor at the MIT, a Gödel Prize winner, and a Turing Award winner Silvio
A blockchain project led by Micali. The project successfully raised a $4 million seed round, with investors including well-known venture capitalists Pillar and Union Square Ventures.

Algorand has not introduced incentive mechanisms or issued digital cryptocurrencies. The project itself has a broad market space. Through technological innovations such as BA*'s consensus mechanism and crypto lottery, it has improved the efficiency of blockchain, expanded the application prospects of blockchain, and enjoyed a very high reputation in Silicon Valley.

Algorand's core algorithm

1. Cryptography lottery algorithm, which is used to ensure that the members of the consensus committee who participate in the consensus are close to completely random;

2. BA* algorithm, which is run by members of the Consensus Committee to produce the blocks that should be packaged this time.

Cryptography lottery algorithm

The cryptography lottery algorithm ensures that each user ($pk{i}, sk{i}$) is selected as a member of the consensus committee in proportion to the amount of the currency they own. That is: Assuming that the weight of each user is marked as $w{i}$(number of currency), then the total weight is $W = \sum w{i}$(total currency), then the probability that user i is selected as a member of the consensus committee will match its weight ratio $w_{i}/W$,

Algorand successfully narrowed the consensus network size and was relatively secure through encrypted lottery; the innovative BA* algorithm has no shared state between each step, making the execution of BA algorithm lighter;

But there are still many things to discuss about the Algorand algorithm:

1. Estimated timeout time is required for multiple stages, including block proposals, which is very inaccurate and unsuitable for time-consuming businesses (currently only supports cryptocurrencies);
2. There is a high demand for network connectivity, for example, it takes 11 steps to reach a consensus in the worst network situation;
3. Algorithm security depends on the security of VRFs functions;

Properties of Algorand Project

Short block generation time

The block generation time is only two steps when everyone is a benign user. If any vicious user attempts to tamper with information, five steps need to be completed. Even so, the time to generate a block is fixed (a few minutes). Here, all users do not need to synchronize their time, they only need to complete the work within their own specified time and ensure that the speed of time elapses for each user is consistent (one second in New York and one second in Japan).

Antiforking

Protocol formulation No two benign users can agree to two different messages. Therefore, there can only be one message as real message, if someone tries to double-spend attack (see below for details). In theory, it can open a new block to contain wrong information and extend the broadcast time of the previous block to infinitely long. However, due to the limitation of the first line, the generation time of each block is fixed and passed by the five-step method introduced later. Any malicious fork will be killed.

Double Flower Attack

Double spend attack (double spend attack), this term appeared when introducing 51% of attacks. Just looking at Chinese names may be misunderstood because of the multiple meanings of Chinese, but English names clearly express their meaning. A double-spend attack is spending one sum twice, which can also be called a double-payment attack.

Quick recovery from fork

If a fork occurs forcibly, the new fork will be killed by a five-step method, and the entire network will reset the time wasted by the fork and start again.

Algorand innovatively adopted the cryptographic lottery technology invented by Professor Micali, and randomly selected some users as validators to verify new blocks to achieve the goal of breaking through the "impossible triangle". Based on the password draw technology, Algorand can achieve the following goals:

(1) Low energy consumption and fast transaction processing speed. Regardless of how many users there are in the Algorand system, only 1 out of every 1,500 users will be selected by the system to perform verification computing tasks, which saves a lot of computing time than Bitcoin, and the processing speed will naturally increase exponentially.

(2) Democratization. No one can control the randomly selected verifiers, and there will be no centralized group like the "mining pool" of the Bitcoin blockchain system.

(3) The probability of a fork is less than one in one megabyte. Assuming that an average of one block per minute in Algorand is generated, this probability means that an average of forks occurs every 1.9 million years.

Why can Algorand raise 420 million yuan?

Angelic investment depends on the team. Founder Silvio Micali is a MIT professor and co-proposer of zero-knowledge proof, and won the Turing Award in 2013 for his outstanding contributions to cryptography. Due to the founder's outstanding academic achievements, Algorand attracted countless attention when it was born. A large number of articles analyzed and analyzed its consensus algorithms, and investment institutions joined. Even though there have always been many doubts about the entrepreneurship of the academic team, institutions are still unwilling to miss this project.

Algorand's first auction

On June 20, Algorand, which was a halo of "god-level project", held a Dutch auction, with the final auction price of $2.4, a 48-fold increase from the private placement price of $0.05.

The total amount of project tokens is 10 billion, and Algo will be sold first at this auction. At the same time, Algorand plans to auction a total of 3 billion tokens, which will be auctioned in five years, with 2 installments per month. The monthly goal is to auction 50 million Algo.

The Algorand main network will launch a 5-year Dutch auction with two installments per month, with a monthly target of 50 million Algoes and 600 million Algoes per year.

What is a Dutch auction?

Traditional auctions, bidding auctions, final results. Dutch Auction is a special auction form. Also known as "price reduction auction", it refers to an auction method in which the auction "target" bid is reduced from high to low until the first bidder deserves a price (to reach or exceed the reserve price).

At present, many ICO projects are gradually crowdfunding through Dutch auctions, including the initial gnosis, gonetwork, polkadot, and to Thunderbolt Network (RDN). Many people don’t understand what Dutch auction is. First, let me explain to you what Dutch auction is, the specific details of Dutch auction, and cost accounting. 

This auction method simply means that the auction price starts from high and drops at a fixed rate. Participants bid at the price they think is appropriate. When the price drops to the total amount of the current auction pool just enough to buy all the tokens of the day, the auction ends.

Take Algorand as an example, because Algorand uses this Dutch auction to the hard top and Dutch auction to the hard top.

For example, suppose a total of 100 Algo tokens are sold one day. Starting at $10, Xiao Li bid $50 to buy 10 at $5. After that, the price continued to drop, and Xiao Wang bid $40 at $2 and bought 20.

The price continued to drop. When the price dropped to $1, Xiao Ming offered another $10 to buy 10. At this time, there was already $100 in the auction pool, and the auction price dropped to $1, which was exactly the price of 100 Algos.

The auction ended that day, Xiao Li won 50 Algos, Xiao Wang won 40 Algos, and Xiao Ming won 10 Algos. Although Xiao Li offered the price at $5, his final transaction price was actually $1.

Where is the auction of Algorand?

Algorand’s Dutch auction is held on the compliance platform Coinlist, which users need to pass KYC to perform.

Coinlist is a financing platform that provides initial token issuance (ICO) for certified investors and high-quality blockchain projects, launched in collaboration with AngelList and Protocol Labs. In April 2018, Coinlist announced a $9.2 million Series A financing, with several well-known blockchain venture capital funds participating in the investment, including Polychain Capital, Digital Currency Group, FBG Capital, Libertus Capital, Blockchain Capital, CoinFund and Electric Capital. 

The initial token issuance projects on the CoinList platform are fully compliant with the securities laws, and its subsidiary CoinList Capital is also a registered investment consultant to the U.S. Securities and Exchange Commission. Not only that, the company has also launched the "ComplyAPI" service, allowing companies to conduct anti-money laundering and KYC inspections on potential investors and confirm the certification status of investors under the US securities law.

Circulating Supply is a freely tradeable Algo quantity. In the first five years of the network, the largest Algo supply will be in circulation. Although the Foundation & Team's 2.5 billion tokens are not locked, the project party guarantees that the Algorand team will not participate in more than 49% of the current circulation (preventing 51% double spending attacks).

Can Chinese participate in the auction?

Chinese investors are unable to participate in the auction due to laws and rules,

But you can participate in the Algorand ecosystem in other ways: https://tracker.algo.capital 

Contact information: ir@algo.capital 

For example, Algo Tracker Fund, the above are their URLs and emails

Other platform agency investment channels are not official channels, and Algorand cannot guarantee its safety and reliability. Please be careful to judge its risks by yourself.

What problems does Algorand's Dutch shooting solve?

     1. Pricing issues. The initial pricing of assets is no longer determined by the project party in a fixed price, but is decided by all the wide range of public participating in the Dutch auction.

    2. Issues of uneven resource allocation. Professor Micali mentioned that when traditional Dutch auctions are used in US Treasury bond auctions, only qualified financial institutions can participate. Dutch shoots based on the Internet and blockchain can maximize the scope of participation.

    3. The most criticized issue of initial token allocation for POS. Algorand distributes 30% of the total tokens in 5 years without permission, and at the same time, it uses no more than 49% of its self-held tokens to ensure the security of the network (49% will not be sold to the secondary market, because only if the Algorand system is stable and secure can the team get the maximum profit). This will be used to issue tokens on a large scale and distribute them as much as possible to avoid the problem of the wealthy people who are concentrated in POS tokens. (Algorand also uses the mechanism to provide a new token reward regardless of whether the token is online or not to avoid this problem)

Price of Algorand

The 2.5 billion tokens promised by the team and the foundation to hold are only used for project development and protection of the project's ecology, and will not be sold. ALGO's auction price is now 48 times higher than the private equity price.

Calculated by the price of $2.4 (06.20 on the day price) multiplied by the total token amount of 10 billion, its total market value reached $24 billion, surpassing Ripple's market value second only to ETH's market value.