Consensus is a process that ensures the Algorand network is secure and resilient. Users stake their Algo into consensus through nodes–hundreds of which are currently run by independent operators across the globe. The more Algo that is staked, the stronger the security of the network becomes.

Algorand leverages the pure proof-of-stake (PPoS) mechanism to achieve consensus. Unlike other proof-of-stake approaches, PPoS enables the user to maintain control of their Algo at all times.

Sophisticated cryptography including Verifiable Random Functions (VRF) and cryptographic sortition enable PPoS to maintain fairness and high security, and prevent collusion. A new block proposer and a new validator committee – both randomly selected in a private and non-interactive method out of all online users, with probability based on the users’ stake – are elected for each block.

Algorand’s PPoS approach achieves agreement on every block in under 3 seconds:

1. A VRF identifies potential block proposers, resulting in multiple “valid” block proposals from different proposers.
2. Each node that observed the block proposals propagates the “best” block – that is, the block with the lowest hash of the VRF proof.
3. Another VRF identifies a soft vote committee; that committee votes to reach agreement that the proposed block is indeed “best.”
4. Another VRF identifies a committee for certification votes; that committee votes to certify that the proposed block does not contain any violation of the protocol (i.e. double-spending, overspending, etc.)
5. The block is then written to the blockchain. 

Algorand’s staking rewards are given to users who actively contribute to network security by bringing their Algo online to participate in consensus. When an account’s proposed block is written to the chain, if the proposing account has at least 30,000 Algo then it will then be given an amount of Algo as a reward.

Rewarding block proposers is beneficial for the broader network as it incentivizes participation in consensus, driving greater decentralization and thus greater network security.

In the initial phase, staking rewards will be comprised of two components: 

1. Block fees – 50% of transaction fees will be paid out as block reward
2. Algorand Foundation-funded supplementary bonus – Starting at 10 Algo per block, this bonus will decay by 1% every 1 million blocks. The Foundation has committed to providing bonus rewards for a period of 24 months.

Anyone with an Algorand account with an account balance of at least 0.1 Algo can run a node. To run a participation node you need a system with at least 16GB of RAM, 8 vCPU, a fast SSD (100 GB NVMe or equivalent), and a good internet connection (ideally 1 Gbps). Learn more about running a node on Algorand.

While anyone can run a node as described above, there is a minimum of 30,000 Algo for a participating account to be eligible for staking rewards. This was determined via community governance vote in Governance Period 10 (GP10), and encourages would-be node runners to bring online enough stake to propose blocks regularly without encouraging a huge number of nodes with small stake to join the network, which could have performance implications.

There is a minimum of 30,000 Algo for a participating account to be eligible for staking rewards. This was determined via community governance vote in Governance Period 10 (GP10). This threshold encourages would-be node runners to bring online enough stake to propose blocks regularly without encouraging a huge number of nodes with small stake to join the network, which could have performance implications.

Users with fewer than 30,000 Algo can participate in consensus and be eligible for rewards by utilizing the various pooling and delegation applications built by the community.