What Is Algorand (ALGO): Everything You Need To Know Here!

Bittime - Algorand seeks to be a solution for trilemma scalability blockchain, which includes security, scalability, and decentralization. 

Many modern blockchain networks attempt to achieve these three aspects in balance, but often have to sacrifice one of the three. 

Algorand, as a leading public blockchain platform, is one of the projects that is making ambitious efforts to address this problem.

What is Algorand?

Launched in 2019, Algorand is an innovative blockchain platform designed to create decentralized applications (dapps) and financial instruments that will become the backbone of the future economy. 

Understanding Algorand and the Blockchain Trilemma

Algorand aims to address the key challenges faced by other platforms, namely decentralization, scalability, and speed, by providing the infrastructure and tools necessary for developers to create applications and assets that can be used by billions of people.

Founder and Team Behind Algorand

Algorand was founded by Silvio Micali, an internationally recognized computer scientist and professor at the Massachusetts Institute of Technology (MIT). 

Source: Wikipedia

Micali is known for his significant contributions to the field of cryptography and has received the Turing Award in 2012 for his work. 

He is one of the leading figures in the development of blockchain technology and cryptography.

The Algorand development team consists of multiple disciplines, including researchers, cryptographers, mathematicians, and software developers. 

The team is committed to creating a secure, fast, and decentralized blockchain platform, and is focused on developing applications that can be used by billions of people around the world.

Algorand also has an advisory board consisting of experts in technology, finance, and academics, who help guide the direction and development of the platform.

How Algorand Works

The Algorand protocol is divided into two layers. The first layer (Layer 1) is used to run smart contracts, handle atomic swaps, and create Algorand-based blockchain assets (known as ASAs). 

This layer is only capable of running relatively simple smart contracts. 

For added functionality, Algorand has a second layer that can run more complex smart contracts, such as those used in modern DeFi applications.

Algorand uses a consensus mechanism known as 'Pure Proof of Stake (PPoS)', which allows all ALGO token holders to participate in block production and earn rewards. 

The process of selecting participants in this consensus is called "cryptographic sortition", in which block producers are selected randomly from a pool of available nodes.

Advantages of Algorand

Speed ​​is one of the main advantages of Algorand, which is capable of processing around 1,000 transactions per second (tps), including smart contract transactions. 

This is much higher compared to Bitcoin which is only 5 tps and Ethereum which ranges between 15-30 tps. 

Algorand also offers near-instant transaction finality, making it ideal for online financial applications that require support for millions of users.

One of Algorand's unique features is the distribution of rewards from each block that is given proportionally to ALGO holders, in contrast to many other PoS blockchains that only reward validators. 

Algorand also claims that its platform is carbon neutral, producing much lower CO2 emissions compared to other platforms.

What Which is Built on the Algorand Network?

Currently, there are many products built on top of Algorand, including:

1. Reach

A platform that makes it easy to build and deploy dapps on Algorand and other blockchains.

2. Opulous

Bringing music assets to the blockchain by enabling artists to get funding for their projects through DeFi.

3. Marshall Islands

Using Algorand to create the world's first national digital asset, known as Marshallese Sovereign (SOV).

What is ALGO Token?

The native utility token for the Algorand ecosystem is ALGO. This token is used to pay for transactions and smart contract computing, as well as supporting Algorand network operations. 

ALGO also provides passive rewards to its holders, with a yield of around 5-6% APY.

Tokenomics Algorand (ALGO)

Algorand tokenomics covers various important aspects related to the use and distribution of ALGO tokens in its ecosystem. Here are some key points regarding Algorand's tokenomics and circulating supply:

Total Supply Algorand (ALGO)

Algorand has a total token supply capped at 10 billion ALGO. This means no additional tokens will be minted in the future, providing token holders with certainty regarding the scarcity of ALGO.

Circulating Supply Algorand (ALGO)

Circulating supply or circulating supply of ALGO can vary over time. 

Most of the ALGO tokens that have been minted will circulate on the market, but some are also held by the Algorand Foundation as part of their reserves. 

The Algorand Foundation regularly publishes transparency reports detailing the number of tokens they hold and how many are in circulation.

Read too How to Buy Algorand (ALGO)

Use of the Algorand Token (ALGO)

ALGO is used for various purposes within the Algorand ecosystem, including:

1. Transaction Fees: ALGO is used to pay transaction and computing fees for smart contracts on the Algorand network.

2. Participation in Consensus: ALGO holders can participate in the consensus process and earn rewards from the network.

3. DeFi and Other Applications: ALGO is also used in decentralized finance (DeFi) applications and various other applications built on Algorand.

4. Passive Rewards: ALGO holders can earn passive rewards from the network, which currently range between 5-6% APY. This provides an incentive for users to save and hold onto their tokens in the long term.

5. Token Distribution: The distribution of ALGO tokens is done proportionally to holders, which is different from many other blockchains that only reward validators. This ensures that all ALGO holders benefit from network growth.

With a clear and planned tokenomics structure, Algorand aims to create a sustainable and attractive ecosystem for developers and users.

Read too List of 4 Crypto Coins with Huge Potential: Hold 'Til They Fly!

What is Algorand Developing for the Future?

Algorand continues to expand its capabilities, with plans to increase block size by 400% and reduce block finalization time from 4.5 seconds to 2.5 seconds. 

If successful, Algorand will be one of the most high-performance blockchains, capable of exceeding the throughput of Visa's payment network, which is considered the benchmark for mass adoption.

With continued innovation and development, Algorand has the potential to become one of the leading platforms in the blockchain world, offering a solution to the blockchain trilemma that has long been a challenge for many projects.

FAQ

Algorand What Network?

Algorand is a public blockchain platform designed to support decentralized applications (dapps) and financial instruments. 

Algorand uses a consensus mechanism called 'Pure Proof of Stake (PPoS)' to achieve security, scalability and decentralization.

Who is the Founder of Algorand?

Algorand's founder is Silvio Micali, a prominent computer scientist and professor at the Massachusetts Institute of Technology (MIT). 

Micali is known for his contributions to the field of cryptography and has received the Turing Award in 2012.

What is an ALGO?

ALGO is the native utility token of the Algorand ecosystem. These tokens are used to pay transaction fees, participate in consensus, and earn rewards from the network. 

ALGO is also used in various decentralized finance (DeFi) applications built on Algorand.

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Reference

Daniel Phillips, What is Algorand? A Speedy, Scalable Platform for Dapps, Accessed December 4, 2024

Algorand.co, Website Official Algorand, Accessed December 4, 2024

Author: IN