- Algorand is a proof of stake protocol founded in 2017. Despite the pioneering of proof of stake occurring in 2012, Algorand claims to be the first protocol.
- The team behind Algorand has chosen to make a transparent attempt to redefine proof of stake itself.
Proof of stake (PoS) is a blockchain consensus model first introduced in 2012 by Sunny King and Scott Nadal. The pair proposed it in the white paper for the Peercoin project, which they had been jointly developing. Yet, Algorand, which launched a full seven years later, is now laying claim to becoming the first to implement proof of stake on its own platform. In this article we will examine Algorand’s claim and the history of proof of stake, in order to assess whether it can be indeed classified as the first project to implement it. Leaders of predecessor projects are understandably objecting to Algorand’s claim to be the first.
The history of proof of stake and the birth of Algorand
While King and Nadal first proposed proof of stake, it was implemented as part of a hybrid consensus alongside proof of work in the Peercoin platform. Nevertheless, proof of stake was soon picked up by other projects who took it and ran with it as their sole consensus model.
The first was Nxt, which launched in November 2013 and is still in operation today. It’s role as pioneer of the first 100% pure proof of stake blockchain is recognized in a 2014 article from Bitcoin magazine.
Next up was Blackcoin, which also used a pure proof of stake and was released shortly after Nxt in February 2014.
Since then, several other projects have used proof of stake, or variants thereof. For example, EOS and Tezos both use some variation of proof of stake, although neither is true to the original version pioneered in previous implementations. Ethereum will move to a PoS consensus as part of the long-awaited ETH 2.0 upgrade.
However only in 2019 Algorand launched its mainnet. Now the project has been causing unrest among its predecessors by attempting to lay claim to being the first proof of stake platform. The claim was called out recently by Lior Yaffe, an original developer of Nxt, who has since co-founded Jelurida, which also operates the Ardor platform. It also led to a vibrant Reddit discussion about whether Algorand’s indeed the first proof of stake or not.
So how is Algorand claiming to be the first proof of stake?
Algorand’s claim to being the first proof of stake now appears to be a question of semantics. The project has branded its version of proof of stake as “pure PoS.” This “pure” variant comes with its own strict definition, all of which was missing from the Peercoin white paper, and hasn’t been required by any predecessor project using proof of stake.
The Algorand definition of pure PoS requires lots of properties using the term “true.”
“True decentralization” means a kind of decentralization that doesn’t have anything to do with the number of wallets a token owner holds.
“True security” means no subset of tokens can endanger the system or create a fork, which is irrelevant to previous PoS implementations.
Finally, “true scalability” refers to grand words such as inclusive participation, enterprise-level performance, and adoption. As a sentence, it makes little sense.
The Algorand definition wraps up by confirming that as it’s the only project that meets this new and very narrow definition, they can lay claim to being the first “pure” PoS blockchain.
Based on the “TM” next to the term on their FAQ page, it now appears the project is even attempting to trademark pure proof of stake.
Proof of stake by any other name?
In any objective sense, this extended definition of “pure PoS” amounts to a lot of words for very little substance. Algorand’s explanation comes across as a transparent attempt to use wordsmithing to cover up the fact that they were caught out, making a claim that simply doesn’t stand up to scrutiny.
The operators of Algorand could have explained how they’ve iterated on proof of stake to try and demonstrate why their version is better while acknowledging that they weren’t the first. Given they came to the space nearly half a decade after Peercoin, Nxt and the overall concept of proof of stake, this would have been plausible and forgivable.
Instead, the team behind Algorand has chosen to make a transparent attempt to redefine proof of stake itself.
In the blockchain space, many projects ride on the coattails of their predecessors, and most are happy to admit it. Hopefully, Algorand will eventually come to acknowledge the work done by previous projects in implementing proof of stake and find a more plausible and authentic way to differentiate itself.