This is the era of Data and information, everything is fast; fast internet, fast web browsing, fast upload/download speed, we can send any message around the world in a fraction of seconds.
At least we have achieved certain success in the domain of information transactions, but we cannot generalize this statement regarding financial transactions, not only in our current monetary system but also in our blockchain technologies.
Algorand is trying to change this trend by its new consensus algorithm PPoS.
What is Algorand (ALGO)?
A simple transaction can takes days to clear and finalize in our current economic system. The process of making transactions is way more expensive, and we lost a big amount of money every year in all types of transaction fees.
When Blockchain came into the market, people believed that it is the right technology that will change our current financial system in near future. It gave us hope to bring a faster, cheaper, and more secured borderless economy in the world and could make our financial system more inclusive.
But with time, several issues came into existence, and one major issue that stopped our way to become an inclusive financial society was a popular term in the blockchain terminology called blockchain trilemma, which says,
“It is not possible to optimize all three qualities at one time in any blockchain.”
Most of the existing Blockchain technologies have the ability to offer any two of them.
But, Without security the block of transactions has no means, without scalability we can only transact among very small networks, and without decentralization, we can’t imagine Blockchain.
So these three properties are dependent on each other. Without it, we cannot achieve speed and we cannot minimize cost.
To solve this problem of blockchain trilemma Algorand (ALGO) was founded. It is a public cryptocurrency-based blockchain and protocol that aims to deliver decentralization, scaling, and security, all three properties at once.
It is a finance company that has the technology which can become the bridge between decentralized and traditional finance systems of the world.
It creates decentralized financial products and protocols.
some features are:
It creates and deploys Tokens, NFTs, Stablecoin, Securities, and Currencies.
It is a very cost-effective infrastructure.
Anybody can create new financial tools, protocols, and services by using Algorand.
The native cryptocurrency of Algorand is ALGO. All the users who hold this coin can automatically be eligible to participate in all processes of the project including voting rights and staking.
What does it want to achieve?
People always sacrifice scalability over decentralization and security, because these two are more important and because of this, blockchains are slow in processing transactions.
Achieving all three aspects is an impossible task that will never be done on the blockchain, everybody knows it and to some extent they have accepted it.
Algorand (ALGO) aims to solve this problem.
How can it be used?
All the popular cryptocurrencies including Bitcoin, Ethereum, etc. is using Proof-of-work (PoW) algorithms since the beginning of time, which is a proven and time-tested consensus algorithm.
Proof-of-work (PoW) is a math puzzle-solving algorithm used to create new blocks and validate transactions in the Blockchain, but it takes a lot of time to finalize and also requires highly specialized computer hardware to solve the puzzle.
One more issue with the PoW algorithm is, there are only three mining pools that control most of the validation processes in the world and most of them are in Chine.
To overcome such issues, Algorand uses a new protocol called Pure Proof-of-Stake (PPoS), in which:
Every token holds the same value.
Transactions will be final and it will stay in the system forever.
Every new block is constructed in the following manner:
A single token is selected randomly and its owner has the power to propose the next block in the system.
Each new block is generated by a new committee, 1000 people are selected among all on a lottery basis, and that 1000 people will form a committee to approve that previously selected block.
Scalability is guaranteed because it solves the problem which is facing by existing Blockchains and can scales to billions of users all over the world.
History of Algorand
Algorand (ALGO) was founded in 2017 by Silvio Micali(left), CEO is Steve Kokinos(centre) , and W. Sean Ford (right) is the COO of Algorand.
Silvio Micali was an MIT professor at that time and he was known for winning the TURING AWARD in 2012 for his work in cryptography. This award is also known as the Nobel of computer science.
The team of Algorand (ALGO) mainly consists of cryptographers, mathematicians, researchers, and developers.
What is has achieved so far?
This much projects are currently working under Algorand.
Algorand (ALGO) has the capacity to support 1000 transactions per second, for context Bitcoin supports only 5 and Ethereum supports only 15-30 transactions per second.
Currently, there are many projects under the umbrella of Algorand (ALGO). Some of them are
Circle – Global financial technology firm.
Index- world’s leading decentralized smart contract exchange.
Republic- private investing platform and technology service provider.
Archax- the first digital securities exchange to receive FCA authorization.
Meld Gold- it delivers secure, seamless access to the acquisition of gold.
The current market value of Algorand (ALGO)
Each Algorand (ALGO) is worth around $0.80 at the time of writing and is now on the #35nd position in the top 100 cryptocurrencies according to CMC.
After some ups and downs in the crypto market, its price is gradually climbing.it is listed on the major cryptocurrency exchanges of the world.
In June 2019, Algorand (ALGO) hosted an auction and earned over $60m just by selling its token at $2.40, but sadly the token didn’t last long on that price, but soon after that it gained momentum and at the time of writing it has the $2 billion market cap.
The maximum supply of ALGO is 10 billion tokens, the circulating supply of ALGO tokens in the market is about 3 billion and the total supply is around 5 billion.
In 2020, Coinbase, the major crypto exchange of the USA listed Algorand (ALGO) in his exchange.
Plans for the future
The current transaction capacity of Algorand (ALGO) is around 5000tps and it is on track to grow this number up to 400% from 5000 to 25000 transactions. If it’s become successful, Algorand will rank among the best performing cryptocurrencies in the market.
Algorand is trying to solve three main problems faced by blockchain technologies: security, scalability, and decentralization and to solve this, it uses the Pure Proof-of-Stake consensus algorithm, in PPoW honesty of the majority will decide the future of this project. There are other technologies like Fantom, Horizen, etc which uses DAGs instead of blocks to solve such problem.
The major benefits of Algorand protocol are its low computational requirements, fast agreements, low fork probability, true decentralization, and proper governance, and that makes it a truly self-made and self-reliant blockchain technology in the market.