Algorand (ALGO) is an autonomous smart contract blockchain platform that is known for being the world’s first blockchain that is based on a pure proof-of-stake (PoS) consensus mechanism. It was founded by Silvio Micali, a computer science professor at MIT and winner of the 2017 Turing award, with the goal of solving the “blockchain trilemma” of speed, security, and decentralization, which is curtailing most established blockchains.
ALGO is the native cryptocurrency of the Algorand blockchain and is currently trending in the crypto market, displaying a largely bullish sentiment among investors.
In this article, let us take a closer look at Algorand and explore everything you need to know about this decentralized blockchain technology.
Algorand (ALGO)
Algorand is a decentralized, open-source platform that was launched as a solution to the scalability, speed, and security limitations faced by other established blockchains. The network provides a wide range of secure, and efficient applications that promote scalability. It employs a pure proof-of-stake (PoS) consensus mechanism that enables fast and low-cost transactions. Algorand is designed with a focus on delivering fast transaction speed with minimal delays. It also has the power to process multiple transactions simultaneously, which solves the scalability issue.
The platform is completely decentralized and is safe from attacks and manipulation from outside entities. Algorand also supports smart contract executions, allowing developers to carry out complex agreements on the network itself. Its layer-1 blockchain functionality makes the system more scalable by improving the fundamental protocol.
How does the Algorand Blockchain work?
The blockchain uses relay nodes to enable efficient communication paths. The PPoS protocol allows Algorand to outperform other blockchains since it has a unique design that solves the issue of the “rich growing richer” – a case of large-scale token holders or node operators benefiting the most from price actions and ecosystem expansion. The PPoS consensus mechanism randomly selects miners at random, without depending on their size of investment in the platform.
It also uses the Byzantine agreement protocol, which decides how people can be part of the decentralized network. This allows Algorand to support a large number of users and reach a consensus on a new block that has low latency without splitting the chain. The blockchain supports only a single block to be added to the chain at a time and continuously compresses blockchain information in order to avoid data overload.
As per its technical innovation plans, Algorand is now focusing on developing Layer-2 solutions in order to expand its functionality along with its performance, interoperability, and scaling. These scaling solutions will further enhance the blockchain’s payment scalability and off-chain computing functionality.
This makes Algorand a two-tiered blockchain that is fast and supports complicated applications. Tokens, atomic swaps, and smart contracts on the blockchain are known as Algorand Standard Assets (ASA), which exist on the mainnet or Layer-1, while the Layer-2 is utilized for decentralized applications that run off-chain and employ complicated smart contracts.
Algorand Applications
Here are some of the top applications in Algorand:
- Tinyman: a decentralized exchange and Automated Market Maker (AMM) protocol that provides an open marketplace for traders, liquidity providers, and developers using the cheap and secure framework of the Algorand blockchain.
- NFDomains: Non-fungible domains are digital identity services that help in buying, selling, and managing Algorand domains.
- Humble DeFi: It is a one-stop solution on Algorand for secure, easy-to-use DeFi products.
What is The ALGO Coin?
ALGO is the native token of the Algorand platform that serves many functions within the platform. It was priced at $0.24 per token during its initial coin offering in 2019. ALGO coin is mainly used to secure the Algorand platform and to reward the ecosystem’s governors. It also serves as a staking token and helps users participate in securing the network and be selected to validate transactions. ALGO also enables payments within the ecosystem, supporting transactions and smart contracts. Holders of ALGO can also participate in the governance of the token, contributing to decision-making processes. The market sentiment around this coin is largely bullish, which shows continuing investor interest in ALGO.
Algorand (ALGO) staking
Anyone who wishes to support Algorand and participate in the network’s development can choose to stake their tokens on the blockchain. This can be done using the mobile wallet app of Algorand where they just have to deposit ALGO and stake. Validators are selected based on the number of coins they own compared to others. Delegates are rewarded in ALGO for their efforts.
ALGO holders are also eligible to participate in the governance of the ecosystem through a voting mechanism.
Algorand (ALGO) tokenomics
- Current Price: $0.3861
- Total Supply: 10 billion ALGO
- Circulating Supply: 8.37 billion ALGO
- Market Capitalization: $3.22 billion
- 24-Hour Trade Volume: $300.96 million
Is ALGO a Good Investment?
Whether you should invest in ALGO boils down to your preferred trading style, risk tolerance, and outlook. The ALGO token is available to purchase on popular crypto exchanges like Binance, WhiteBIT, Coinbase Pro, and Bitget.
Final Thoughts
Algorand is an innovative blockchain that helps developers to create decentralized applications on it. There is an Algorand Foundation that exists to manage the blockchain which can be accessed by firms or individuals who want to use it. Currently, it is not possible to mine the ALGO token using computer hardware. That being said, Algorand is not without its drawbacks. It heavily depends on proof-of-work-based platforms due to its proof-of-stake system. The technology it uses can also be a little complex, especially for non-technical and new users. New users might find it difficult to participate in the network since it requires them to invest in ALGO tokens.
Disclaimer: This is not a recommendation for investment and please do not treat it as financial advice. This is compiled based on public data and is not meant as a direct counsel for investors.