There are a lot of questions and speculation here about this paper and Algorand. I would be happy to try an answer them to your satisfaction.
Some context may be helpful first, though. This paper is an innovation about one aspect of our technology. Algorand has a very fast consensus mechanism and can add blocks as quickly as the network can deliver them. We become a victim of our success. The blockchain will grow very rapidly. A terabyte a month is possible. The storage issue associated with our performance can quickly become an issue. The Vault paper is focused on solving this and other storage scaling problems.
The Algorand pure proof-of-stake blockchain and associated cryptocurrency has many novel innovations aside from Vault. It possesses security and scalability properties beyond what any other blockchain technology allows while still being completely decentralized. Our website, algorand.com, and whitepaper are great places to start to learn more.
If you learn best from videos then I suggest you watch Turing award winner and cryptographic pioneer, Silvio Micali, talk about Algorand: https://youtu.be/NykZ-ZSKkxM. He is a captivating speaker and the founder of Algorand.
Algorand's consensus per the YT video you linked is
step 1. 1 user is randomly chosen to propagate a new block (can user make up a fake block? let's assume not)
step 2. 1000 users randomly selected vote on that block and if they agree, it's DONE.
(what if 1000 users are in the same country/company, etc. how do you prevent collusion on fake blocks)
This is hilarious. So the only thing you rely on for consensus is 1001 random 'users' input weighted by stake? What happens when your network is bombed with 1000tps and you need to contact 1001 staked users for every block? There are also vulnerabilities such as the recent "fake stake" bug that affect pure POS coins which I won't go into.
Now about the article referencing Vault. I believe NANO came up with this bootstrapping feature:
> Each user account only ever stores the balances of the accounts in its assigned shard
Yes they are replicating NANO's block lattice structure using "shards" with an insecure way of trusting any future chain that includes your old tx's but gives no guarantee on the state of any other account. As I understand it, I can be fed a fake chain while bootstrapping and accept phony funds as long as my balance shows up, right? ...Assuming this feature worked without any security holes, what's to stop other coins from implementing it? You don't need an entire cryptocurrency for it, it's just a feature and if it worked everyone would be using it. The sharding problem has not yet been solved and there are coins like Ethereum that are trying really hard to make it happen.
It's really sad to see this low-quality content come out of MIT. This looks like someone trying desperately to get a piece of the Crypto pie using MIT's reputation as a get rich quick scheme. Just for kicks I looked through reddit/r/cc and found only 5 dead posts mentioning Algorand with no comments on any of them. Their website makes all these claims about "pioneering a sortition algorithm" that looks "totally legit" if you ask me.
> Vault reduced the bandwidth for joining its network by 99 percent compared to Bitcoin and 90 percent compared to Ethereum, which is considered one of today’s most efficient cryptocurrencies
1) Since when are these considered efficient? I don't think anybody in the know would say this. They're the most popular, but no means the most efficient.
Bitcoin is 250GB, so 90% of that is still 25GB to join the network, which is still ahhh enormous amount. And what's the baseline for comparison here? Were all of bitcoin's transactions replayed on an Algorand test network for this comparison? Or is this a metric from some test usage? If the latter then that's a huge issue since it grows in size.
2) On top of that you're saying it could accrue a terabyte a month in data. What type of usage is this under? Is that on current bitcoin transaction levels? 2017 transaction levels? A steady state tx/s? Is a backup of this data needed or is it throwaway and summarized in the latest blocks? If it's still needed then that's a decentralization issue because not many people will be maintaining full nodes.
3) What type of specs are affected by these changes? Can you still perform atomic swaps? That's a pretty standard requirement nowadays and would hinder the Blocknet and exchange interiperability.
Ethereum is scared or that so they are implementing some hybrid form.
Bitcoin is doomed from my perspective, because of the focus on proof of work and the confirmation times. When you realize that algorand is super fast, there is no "confirmation time", and there is no waste in energy to mine, then it is hard to back up any cryptocurrency focusing on proof of work.
> Algorand has a very fast consensus mechanism and can add blocks as quickly as the network can deliver them. We become a victim of our success. The blockchain will grow very rapidly. A terabyte a month is possible. The storage issue associated with our performance can quickly become an issue. The Vault paper is focused on solving this and other storage scaling problems.
What prevents a person from using a chain like IPFS?
Ethereum Casper PoS has been under review for quite some time.
Why isn't all Bitcoin on Lightning Network?
Bitcoin could make bootstrapping faster by choosing a considered-good blockhash and balances, but
AFAIU, re-verifying transactions like Bitcoin and derivatives do prevents hash collision attacks that are currently considered infeasible for SHA-256 (especially given a low block size).
There was an analysis somewhere where they calculated the cloud server instance costs of mounting a ~51% attack (which applies to PoW chains) for various blockchains.
Bitcoin is not profitable to mine in places without heavily subsidized dirty/clean energy anymore: energy and Bitcoin commodity costs and prices have intersected. They'll need any of: inexpensive clean energy, more efficient chips, higher speculative value.
Energy arbitrage (grid-scale energy storage) may be more profitable now. We need energy storage in order to reach 100% renewable energy (regardless of floundering policy support).
Bitcoin is software and can easily implement these features but the community is divided and can't reach consensus on anything. Lightning Network as layer two solution is pretty good from what I know.
Ethereum improvements are coming along very slowly and that's good. They're the only blockchain with active engagement by thousands of multiple parties.
Aragaon and Vault's papers might sound good, but who knows how they'll turn out in production.
Ripple only runs ~7% of validator nodes; which is far less centralized control than major Bitcoin mining pools and businesses (who do the deciding in regards to the many Bitcoin hard forks); that's one form of decentralization.
Ripple clients can use their own UNL or use the Ripple-approved UNL.
Ripple is traded on a number of exchanges (though fewer than Bitcoin for certain); that's another form of decentralization.
As an open standard, ILP will further reduce vendor lock in (and increase interoperability between) networks that choose to implement it.
There are forks of Ripple (e.g. Stellar) just like there are forks of Bitcoin and Ethereum.
> In contrast, the XRP Ledger requires 80 percent of validators on the entire network, over a two-week period, to continuously support a change before it is applied. Of the approximately 150 validators today, Ripple runs only 10. Unlike Bitcoin and Ethereum — where one miner could have 51 percent of the hashing power — each Ripple validator only has one vote in support of an exchange or ordering a transaction.
How does your definition of 'decentralized' differ?
- it is very hard to audit the chain for bugs. If someone finds a bug to create coins through thin air you probably won't notice it.
- regulations by states is made hard. If you are required to pay taxes, and you live in a society, then these things do matter.
If you want cryptocurrencies to work, we need cryptocoins that are not encrypting transactions.
Another way to think about it: if Bitcoin somehow worked without mining, that's no reason for demand or usage of Bitcoin to go down. The value of bitcoins comes from network effects and scarcity.