Algorand’s Permissionless Blockchain

Algorand is an entirely permissionless and decentralized public blockchain. Users do not need the approval of any trusted authority to join the network and participate in the protocol. Anyone can use the blockchain to transact and participate in block generation. The data is public, so every participant can read every block. And every participant can write a transaction in a future block.

Bitcoin was the first permissionless blockchain and has inspired many to rethink consensus in a decentralized environment. However, the nature of proof-of-work has caused the power of block generation to concentrate into just a few mining pools. It has also caused users to separate into two almost disconnected classes—ordinary users who use bitcoin to transact and professional miners who profit from generating new blocks. The entry cost for participating in block generation has become too high for most users. On the other hand, in permissioned blockchains, the power of block generation is with a small set of authorities by design, and most users do not have access to it.

The Algorand blockchain has only one class of users. Since Algorand’s protocol is based on pure proof-of-stake, no user or group of users is distinguished to play a special role in the protocol. Every user can play any role in the protocol in proportion to their stake. All users who possess algos and are online are automatically eligible to participate in all functionalities of the protocol, including proposing blocks and voting on blocks.

A user is free to choose to only transact, without participating in the consensus protocol. However, the protocol is designed so as to minimize the cost of participation. Thus, there is no barrier for users that choose to participate. This way, users who would like to conduct high-value transactions or post high-value assets on Algorand’s blockchain do not need to trust that a small set of users will remain honest and will not censor their transactions.