Algorand (ALGO) is an autonomous, decentralised, blockchain-based network that supports many applications. Algorand was created to speed up transactions and be more efficient compared to Bitcoin or other slower blockchains. Algorand’s mainnet was activated in June 2019. Its processing capacity reached about one million transactions per day in December 2020. Algorand was founded by MIT computer science professor Silvio Micali, the 2012 Turing Prize laureate.
Algorand is a blockchain project that was born because of existing restrictions on other blockchains: slow transactions, network congestion and transaction fees that can be particularly costly at times. As this is a recurring problem in the industry,the team behind ALGO saw an opportunity to develop a solution for this.
Algorand’s goal is to enable companies to have a blockchain solution that is easy to implement for their needs and that allows them to programme any decentralised application (dApp) in a simple way, while maintaining a very good level of security.
Unlike many other projects, where the founders are anonymous, the person behind Algorand, Silvio Micali, is a professor of the famous MIT in the United States, a university highly regarded in terms of new technologies.
This professor won the 2012 Turing Award for his contributions to securing peer-to-peer exchanges, electronic money, cryptocurrencies and blockchains. This makes him one of the best-placed people to successfully develop a highly secure blockchain solution.
Algorand allows companies to set up dApps that can operate at minimal cost and quickly (operations are validated in seconds). This is something that starkly contrasts popular blockchains like Ethereum, where slow and expensive transactions prevent the development of dApps that need to process information quickly and cheaply.
In order to operate its blockchain, Algorand uses a pure proof-of-stake (PPoS) mechanism, which sidesteps the downsides of proof-of-work (PoW) systems, while maintaining a good level of security on its network.
On Algorand, the PPoS consensus works as follows:
In addition to the PPoS consensus, Algorand also uses a ‘Decentralised Byzantine Agreement Protocol’, which can accept a number of dishonest users when validating transactions as long as honest users are the vast majority. To do this, Algorand uses two security features:
First, it is impossible for a person who wishes to act dishonestly to know which users are corrupted. Users required to certify a new block are chosen in a secret and individual manner.
Second, if the dishonest individual manages to discover the users who are called upon to verify the transactions, it is actually too late for them to try to corrupt them, since these individuals have already fulfilled their responsibilities within the consensus. When certifying a new block, users are again randomly selected, preventing further attempts at corruption.
To participate in transaction verification, users must stake ALGO tokens. When they allow a block to be added to the chain, they will receive ALGO rewards based on the number of tokens they have staked.
ALGO tokens also allow you to participate in the governance of the project. When an improvement proposal is made, it is published on the blockchain and everyone can vote with their ALGO tokens. If the proposal is approved, then the community sets a block from which this improvement will be implemented. Once this block is reached, everyone switches to this new version of Algorand.
If you want to buy ALGO, you can do so from many different exchange sites. However, please note that not all buying platforms are necessarily reliable, as many of them are… exotic, to say the least.
In order to minimise risk when purchasing ALGO, we advise you to use only a reliable exchange site like the ones we recommend. These are serious exchanges that we personally use and are satisfied with. In the case of Algorand, however, we can suggest that you purchase ALGO directly using Binance or Crypto.com, which are two sites that are fairly easy to use and allow their users to purchase ALGO.
Be careful, however, as it is not possible to buy ALGO directly with fiat money (pounds, dollars, etc.) as it is a privilege reserved for the most popular and largest cap digital assets. In order to buy ALGO, you will first need to purchase an intermediate cryptocurrency, such as BTC or ETH, and then trade these digital currencies for ALGO.
We particularly like the fact that Algorand was designed by someone who received a Turing Award, because it makes the project much more credible and is reflected in the project’s design.
All the same, Algorand is tackling an ultra-competitive market, where many other projects all have the same objectives. It is not out of the question for several cryptocurrencies to occupy the same niche, but it is clear that there will not be more than two or three at the same time.
Even though Algorand’s team is very competent, we will have to wait and see how things will evolve to find out whether the project will succeed in establishing itself in its niche or not. It is quite possible that this is the case, but other competitors are also on the move, and only the best will be able to win in the end.
To learn more about the project, why not check out our complete guide to Algorand (insert link), which explains in much more detail all aspects of this crypto project.
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