Demystifying the decentralization of Algorand blockchain network: is Algorand decentralized or not?

There are several network parameters defining the decentralization/centralization of a public blockchain or distributed ledger.

For Algorand network, it is a well documented fact that the decentralization of relay nodes is the main source of criticism for its centralization/decentralization nature.

Critics often state that, because of the high financial & technical barrier to set up and run a relay node in Algorand network, the network is highly centralized in that regards.

So is it really the case?

The answer is probably "yes you are right at present, but you will be wrong in the near future".

At present, running a relay node in Algorand network will require permission from Algorand. This is intentional and a natural way to build and grow a blockchain network in its early years.

In the near future, participation in running relay nodes will be permissionless through a Permissionless Relay Node Mechanism. In fact, the Algorand Foundation has launched a community relay node program in December 2021. We should expect more of these pilot programs to be initiated until the Algorand get a clear idea what is the optimal Permissionless Relay Node Mechanism. This is systematic and scientific way to scale a technology at global level. It's a long-term process and they'll very likely get there.

It is also worth mentioning that the financial barrier will get lower and lower over the years due to several factors, such as hardware equipment get cheapter, and new technological approaches/mechanisms to be gradually added to the Algorand Pure Proof of Stake protocol to improve it while maintaining the same hardware spec. The upcoming upgrade (State-Proof to significantly and securely improve cross-chain communication and transaction speed improved 5x to 6000 tps) is an excellent example of how the Algorand team can essentially improve the network performance and security without asking for more dollar cost in terms of hardware.

The beauty and strength of Algorand blockchain network is its pure proof of stake protocol and its other core infrastructures. This is something that will help Algorand scale globally without compromising network security, decentralization, and speed/scalability. And this is something that can't be fixed easily (and in several cases, not really feasible from a technological standpoint) by other PoS networks.