July 17, 2022

Algorand: The Path to a Carbon Negative Blockchain

Algorand: The Path to a Carbon Negative Blockchain. In this blogpost we will take a deep dive into Algorand's environmentally-focused ethos, examining the technology that underpins the blockchain to the enterprises that are also choosing to be built on Alogrand.

Algorand: The Path to a Carbon Negative Blockchain

Algorand: The Path to a Carbon Negative Blockchain

In a previous post, we briefly touched upon why Algorand is CC Token's blockchain of choice (hint: sustainbilitly!). Here we will take a deep dive into Algorand's environmentally-focused ethos, examining the technology that underpins the blockchain to the enterprises that are also choosing to be built on Alogrand.

The Technology

Algorand was founded by cryptography pioneer, Turing award winner, and MIT professor, Silvio Micali in 2017. Aimed at solving the blockchain trilemma of security, scalability, and decentralization with sustainability as a key focus, Silvio invented a new Pure Proof of Stake (PPoS) consensus protocol, which is the foundation of the Algorand blockchain.

The majority of blockchains are currently built on proof-of-stake (PoS) or proof-of-work (PoW) consensus. Proof-of-stake blockchains provide users who have more stake (i.e. hold more currency in the respective system) with more influence in proposing and creating new blocks. Unlike proof-of-work blockchains, proof-of-stake networks are maintained by validators, thus eliminating the need for miners. To participate, a user simply has to hold a stake in the native currency - no specialized hardware or electricity needs to be purchased. 

Proof-of-work, on the other hand, requires nodes (miners) to solve a cryptographic puzzle to find a solution with a new block proposal. The first miner to do so is provided with a reward of the underlying currency and subsequently, the block is added to the chain. This process requires an immense amount of computing power and is a key factor contributing to who 'wins'. Proof-of-work is infamous for being energy-intensive, consuming massive amounts of electricity to mine and build each block. 

Algorand's Consensus Protocol

With the pure proof-of-stake system, Algorand ties the security of the economy to the honesty of the majority of the economy. Therefore, it is impossible for a small subset of the economy to control the whole. This key difference from other blockchains is also manifested in the block building process. With Algorand, blocks are constructed in a two-stage process:

  1. A single token is randomly selected and the owner of the token is the user who proposes the next block.
  2. 1000 tokens are selected among all the tokens in the system. Owners of the chosen tokens are the Phase 2 'committee' which approves the block proposed by the first user. Once the block is confirmed by the committee, the block is propagated and attached to the blockchain.

The second phase is crucial as it mitigates the risk of malicious users on the system. It essentially eliminates the likelihood of bad actors colluding since the 1000 tokens are randomly selected, making the chances quite low that the majority of the committee selected are indeed dishonest individuals. 

A crucial question to ask at this point: who selects the committee to ensure the consensus is decentralized and secure? Here, the committee selects themselves through a cryptographically fair lottery, which cannot be altered. A user has a higher probability to obtain a winning ticket if they hold more tokens.

The above process solves the blockchain trilemma, being secure, scalable, and decentralized synchronously. Let's look a little closer:


Security is ensured via the cryptographically fair lottery, designed by the world's top cryptographers from MIT. When the selection happens, the committee members do not know each other's identity - their identity is only revealed at the moment they propagate through the network their winning ticket and opinions about the block. At this point in time, even if there was a bad actor on the system, it is too late for them to influence the majority. A key assumption that Algorand makes is that the majority of users on the network are indeed good actors.


On Algorand's system, it takes approximately a microsecond for a user to run their lottery (and all lotteries are run independently of one another). Once a user is selected as a member of the committee, they propagate to the network a short, single, computed message. This needs to be replicated 999 times over to reach the verification by the 1000 committee members, which should happen very fast. Then multiply the process by the number of thousands of protocols that run transactions on Algorand - the verification is indeed scalable!


The 1000-person committee is randomly selected to create the next block and will continue to be randomly created every time a new block is made. And there is no minimum requirement to be considered for the committee - anyone can participate in the lottery as long as they own one Algo.

Algorand's efficient PPoS consensus is a leading contributor to the blockchain's low carbon footprint. With the goal to be carbon negative and even carbon negative, Algorand has implemented the use of smart contracts to allocate a certain amount of credits into a green treasury. Therefore, any carbon footprint Algorand protocol may omit is covered by these credits.

By no means is the above examination of Algorand's technology exhaustive, rather we aim to highlight the main components of the network that demonstrate how it is revolutionizing blockchain. However, Algorand's technology is only one component that contributes to its goal of being the greenest blockchain. Let's pivot to now understand the strategic partnerships and wider ecosystem that support this ambition.

The Ecosystem

Algorand made a commitment at its inception to be environmentally focused and the fact that the network was built on a low power consumption PPoS consensus protocol has allowed them to have a small carbon footprint. This commitment has evolved as the ecosystem has grown with the ambition to make the network carbon negative. Algorand aims to do this through strategic partnerships and supporting like-minded, environmentally-focused protocols to build on the network via the Algorand Foundation.


In order to meet the goal of being carbon negative, Algorand partnered with ClimateTrade, a member of the Algorand ecosystem, to offset carbon produced by the network. ClimateTrade helps companies offset CO2 emissions and finances climate change projects by using blockchain technology to ensure carbon credits are aligned with a user's activities and that the money from the sale funnels straight to the desired project. Algorand has a carbon offset plan with ClimateTrade that helps the network monitor their offset requirement as they grow to ensure that more carbon is being removed than created by their footprint.


Algorand has become the blockchain of choice for many innovators with a sustainable focus with enterprises such as PlanetWatch, GaiaChain, Algo Cleanup, and CryptoTrees, building on the network. The Algorand ecosystem brings together like-minded users, creating a community championing environmental initiatives across all sectors. To support this flourishing movement, the Algorand Foundation was established, with the aim to establish a community of blockchain developers keen to use the platform to support sustainable endeavors.

Final Thoughts

CC Token has chosen Algorand blockchain because of its unparalleled scalability and security, along with its PPoS consensus mechanism making it one of the greenest blockchains in the world. The high caliber of growing innovations being built alongside us on the blockchain only demonstrates the power of the network. Together, we will create a greener future by leveraging the tools and community made possible by Web3.