Introduction

Blockchain technology arose to fulfil the promise of genesis and exchange of digital native value in a disintermediated, censorship resistant, safe and scalable way.

Billions of people on the Earth (and maybe the Moon or Mars) would have the possibility of transacting without borders, barriers or discrimination within a distributed computational infrastructure that cancels out the need of trusted parties in between.

As well as exchange of digital information in the Internet era relies on Communication Protocols, the exchange of digital value relies on Consensus Protocols. Combining distributed computation, cryptography and game theory into a mathematical equilibrium Consensus Protocols are the engines that power blockchains, keeping the history of digital value unique, consistent, trustless, and tamper-proof within a distributed public ledger.

Blockchains' performances depend on their Consensus Protocols. At the beginning of this technological journey the so-called Proof of Work (PoW) consensus powered the first generation of Blockchains, with the merit of showing the existence of digital native value but at the same time facing the limitation of their own foundation.

In fact, running an interplanetary computational battle one against the other, just for the sake of validating the next block of data, takes a lot of time and enormous amount of energy. As "Proof of Work" suggests itself, showing off a commitment in the system, through the allocation of computational and energetic resources, is the core of this consensus mechanism.

However, Blockchains that run on PoW fail in fulfilling the promise of scalability, decentralisation, transaction speed, and costs, ending up relying on energey-intensive centralised computational farms.

The ultimate output of a Blockchain infrastrucuture is: reaching consensus to finalize state transitions of a distributed permissionless system in secure, scalable, and decentralized way.

The history of engineering teaches us that any technology evolves towards higher efficiency and scalability: who obtains the same useful output consuming less input resources and time survives.

Is PoW the only way to reach consensus and finalize a state transition of a distributed permissionless system in a secure way?

Is the foundational Blockchain promise doomed by the Buterin trilemma?

Here is where Algorand steps in.