How It WorksFrictionless evolution.

Flexibility is the key to success.

Recall that Algorand produces a new block via its hallmark propose-and-agree mechanism. At a high level, Algorand summons secretly and instantaneously a small group of users, who are cryptographically and securely chosen to fairly represent the community of all users (weighted by their holdings in the system). This representative committee reaches agreement on the new block, but in fact, it can be used to reach agreement on anything else. For instance, on a change of the protocol or a modification of the monetary policy.

We should be cognizant that change is necessary in any complex system. Traditional cryptocurrencies are static, and any “change of direction” requires a hard fork, and thus the split of the community. In the long run, fragmentation will weaken both the community and the utility of any currency.

Traditional cryptocurrencies do not have a built-in secure mechanism to reach agreement. As a result, debates on changes are quite unstructured, and whatever form of agreement may be reached, it must be reached off-chain. Thus, one may always doubt the correctness of any conclusion.

By contrast, Algorand enables the community and the protocol to evolve. Algorand is centered on its efficient and secure Byzantine agreement. After being debated, a proposed change is posted on the blockchain, and using Algorand’s consensus protocol the community votes to either accept or reject the proposal. If approved, the proposed change will take effect immediately.

In Algorand, such agreement is not implemented via a smart contract. Rather, it is directly built in in the core of the protocol.