Algorand

• 1. Introduction

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  Algorand spent years named as an unregistered security in lawsuits the Securities and Exchange Commission filed against cryptocurrency exchanges. On the 17th of March 2026, that classification changed. The SEC and the Commodity Futures Trading Commission jointly issued an interpretive release identifying ALGO as a digital commodity instead. ALGO is the native cryptocurrency of the Algorand blockchain, a proof-of-stake network that uses a mathematical lottery to decide who validates each transaction. Who designed such a system, and what convinced two major federal regulators to revisit their earlier position? Those questions lead back to a computer science professor at the Massachusetts Institute of Technology.

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• 2. The Founder

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  Silvio Micali, a computer scientist and professor at MIT, founded Algorand in 2017. The network's test phase opened to the public in April 2019. In June 2019, the main network launched officially. Algorand is designed to be energy efficient. The Algorand Foundation, which supports the project's development, funded research claiming the overall protocol framework is sound under certain conditions. That soundness claim rests on a single design choice: how the network selects participants to propose and validate each new block.

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• 3. How Committees Are Chosen

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  Algorand calls the process at the center of its consensus protocol "self" sortition. The procedure runs locally and privately on every node in the network, with no central coordinator overseeing who is chosen. The goal is to randomly select subsets of participants, called committees, whose votes carry weight in each round of validation. Once a committee member publishes their selection result, any other participant can verify it. No adversary can predict the result before it is published.

  Committee size for each round is not a fixed number. It is defined as a statistical expectation from a pseudo-random process, so the actual count can vary while the average stays predictable. A participant's probability of landing on any committee is proportional to the number of ALGO tokens they hold. More stake means a higher likelihood of selection. Each node's result stays private until that node chooses to reveal it, protecting the process from targeted interference. Each round of Algorand's consensus moves through three distinct steps, each calling on a freshly chosen committee for a specific job.

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• 4. Block Production and Safety

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  With a statistical expectation of 20 simultaneous proposals per round, block proposal is the first of those steps. Sortition picks a proposal committee, and each member assembles a candidate block and broadcasts it. Each proposer includes a VRF output and a cryptographic proof in their submission. These give other nodes the means to verify the proposer's committee membership.

  In the second step, the soft vote, nodes wait for an adaptive period measured by their local clocks. This pause ensures block proposals from the first step have propagated before voting begins. A fresh sortition selects a soft vote committee. That committee checks each incoming proposal to verify that its sender was a legitimate member of the first-round committee. It then runs a Byzantine Agreement process called BA* to identify the proposal with the highest random priority. Byzantine Agreement means the committee can reach a binding decision even when some participants are dishonest or unreachable. Nodes spread information throughout this process via message gossiping, broadcasting to peers directly or through relay nodes that minimize message hops and keep latency low.

  When the soft vote crosses a threshold of votes, the certify vote begins. A certify committee, again chosen by sortition, examines the winning proposal against the current state of the ledger. They check for double spending, overspending, and any other invalid account transitions. If the certify committee reaches agreement, the block is added to the ledger.

  The protocol makes a deliberate trade-off: it chooses consistency over availability. If the network cannot reach agreement within a set time, block production halts to prevent forks. The protocol enters recovery mode. The Algorand team claims that once Byzantine Agreement is restored, production resumes without any reconciliation or reorganization of the chain. Bitcoin and similar networks follow the "longest-chain principle." That approach keeps producing blocks through a network split, accepting forks as a routine outcome. Algorand's design rules that out. The network can only be forked intentionally, through soft forks or source code forks.

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• 5. From Olive Oil to Money Markets

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  In 2019, Algorand became a partner of World Chess. Two years later, the blockchain's reach extended into Italian agriculture. Italia Olivicola, Italy's largest olive and olive oil producers' organization, partnered with Euranet to implement Algorand-based technology to address olive oil adulteration. Also in 2021, SIAE, the Italian Society of Authors and Publishers, announced a project using Algorand for copyright management.

  In 2022, the blockchain hosted a series of NFTs created by Robert Irwin and the Australia Zoo. The following January, Fideiussioni Digitali, Italy's initiative to reduce fraud in bank and insurance guarantees, selected Algorand for a project addressing fraudulent bank guarantees. In February 2023, the Algorand Foundation urged users to withdraw funds from a cryptocurrency wallet called MyAlgo. The wallet had been hacked for $9.6 million the week before that warning.

  In 2024, CNBC-TV18 reported that Algorand's blockchain was being tested for digital identification to help women in India access public health programs. In June 2024, the first tokenized money market fund on the Algorand blockchain launched. When those identification pilot results are published, they will help establish whether Algorand can serve as infrastructure for government health programs.

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