What is Algorand (ALGO)?

What is Algorand (ALGO)?

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Algorand is an open-source, decentralized blockchain network that was launched in April 2019, using a two-tiered structure and a unique form of the Proof of Stake (PoS) consensus process.

Algorand is designed to address the three primary issues confronting blockchains today, dubbed the cryptocurrency trilemma: security, scale, and decentralization.

Algorand's consensus mechanism, dubbed a Pure PoS, binds the network's security to the honesty of the overall number of nodes.

In comparison to Delegated Proof-of-Stake, Liquid Proof-of-Stake, or Bonded Proof-of-Stake, there is no sanctioned process, also known as cutting, in place in the event of an actor misbehaving — consider liveness faults such as low uptime, or security faults such as attempting to validate the same block twice.

Rather than penalizing bad actors, Algorand seeks to make money cheating impossible for a few and money cheating for the majority foolish. If two-thirds of the vote is genuine, the protocol will function normally.

The proposal phase begins with the selection of a single token at random, and its holder proposes the subsequent blocks. However, this proposer is known to the whole network only during the propagation phase, at which point it is too late to intervene. In pure PoS, each token has the identical ability to be chosen.

A committee of 1,000 random token owners is chosen to approve the block submitted by the initial user. In comparison to typical Proof-of-Work or Proof-of-Stake blockchain technologies, this random selection of committee members renders the protocol exceptionally safe against adversary attacks: adversaries simply do not know who to target.

 

Component Algorand (ALGO)
Technologies Verifiable random function (VRF), Byzantine Agreement Protocol, ASC1 (Algorand Smart Contracts), TEAL
Market Capitalisation $8.4 billion+
Open-Source Yes
Consensus Mechanism Proof-of-Stake, Byzantine Agreement
Smart Contracts Yes
Founders/Authors Silvio Micali
Launch Date April 2019
Circulating Supply of Coins 6,331,133,983 ALGO
Maximum Coin Supply 10,000,000,000 ALGO
Mining-based Coin? No
Is Algorand a Stablecoin? No
Does Algorand have a burn rate? Yes
Does Algorand have a Whitepaper? Yes, the different whitepapers can be viewed here

Evolution and Development of Algorand

Algorand is a permissionless true proof-of-stake blockchain technology founded by Turing Award recipient and MIT academic Silvio Micali, who launched Algorand in 2017.

Algorand is made up of two entities: a corporation and a foundation.

The Algorand Foundation is responsible for ecosystem development, award financing, crypto research primitives, on-chain administration, and decentralization of the Algorand system, which includes nodes.

Algorand Inc., a private entity situated in Boston, is responsible for the protocol's basic development. The public launch of the Algorand testnet occurred in April 2019, while the public launch of the main network occurred in June 2019.

Algorand's Roadmap from launch to date is as follows:

  • Testnet release was in April 2019
  • The Algorand 1.0 Launch was held in June 2019
  • The Algorand 2.0 Launch was in November 2019
  • In December 2019, Conditional Accelerated Vesting was done
  • Algorand v2.0.2 was released in December 2019

 

What makes Algorand unique?

The features that make Algorand unique include the following:

  • A block proposal time of 0.5 seconds
  • Block finalization of 2.5 seconds
  • Finalized transactions per second (TPS) of 46,000

 

Algorand's consensus method is based on Proof-of-Stake (PoS), and it distributes validator incentives to all owners of its native ALGO tokens.

Algorand can meet the high throughput needs of extensive worldwide usage and a range of use cases due to its great bandwidth and equitable community incentivization.

Algorand is now capable of supporting decentralized application (DApp) creation and enabling scalability as a public smart contract chain that is based on staking.

Rising gas fees on Ethereum have prompted many decentralized application (DApp) programmers and decentralized finance (DeFi) traders to seek out alternate solution blockchain solutions, with some having turned to Algorand as an Ethereum-alternative for decentralized application (DApp) development and DeFi applications.

Algorand allows for the creation of new coins, and in addition, users can transfer existing tokens onto the platform when they use the ASA protocol, an innovative and robust solution unique to Algorand. 

For example, stablecoins like USDT and USDC exist as ASAs on the Algorand blockchain, where they benefit from significantly better throughput and cheaper transaction costs than on Ethereum.

Additionally, as central banks continue to investigate networks to host their central bank digital currencies (CBDCs), Algorand has emerged as a credible choice and has been selected to host the Marshall Islands CBDC.

 

What are the main uses for Algorand?

As with other cryptocurrencies, Algorand has attempted to develop an ecosystem of apps for which the tokens may be utilized. While many holders purchase and sell Algo on a speculative basis, there are many other uses for it.

The developers of Algorand want to host smart contracts that will regulate the trade of digital content or digital equivalents of physical things.

Algorand is investing heavily in the creation of “DeFi,” or decentralized finance, through its backing for smart contracts and digital products. Algorand's inventors foresee utilizing its blockchain to manage a variety of digital and “real-world” assets, such as gaming points or mortgage escrow payments.

 

What is the future potential for Algorand?

Since its introduction in 2019, the Algorand blockchain technology has benefited from global modifications.

Because of its rapid transaction completions and high TPS rate, the project has attracted the interest of governments, traders, industries, and other significant stakeholders in cryptocurrencies. Abris.io just announced a white label NFT system and an NFT platform using Algorand's blockchain.

Algorand is now listed on several notable cryptocurrency exchanges, including Binance, Coinbase, Kraken, and Huobi. Additionally, e-Money connected with the Algorand blockchain to accelerate the adoption of European digital currencies, namely stablecoins such as the eDKK, eSEK, eNOK, eCHF, and eEUR.

Algorand's early adopters can aspire for global acceptance based on its high TPS, cheap transaction costs, and innovative core design. Meanwhile, altcoins like Ethereum, Polkadot, Solana, Tezos, and Cosmos compete with Algorand for market share.

 

Price analysis on Algorand

Algorand was initially launched in 2019, and its price analysis over the past two years are indicated as follows:

 

  2019 2020 2021 to date
ALGO Price High $2.15 $0.66 $2.37
ALGO Price Low $0.19 $0.12 $0.69
Market Cap $153M $515M $13.4B

 

Price prediction on Algorand

Algorand can be used on DApps so that payments can be settled at any time. The confirmation of these transactions is done in a few seconds. This is because faster block generation times mean that the fees are the lowest.

Algorand allows decentralized exchanges to make quick and cheap trades for their users. They become more trustworthy and safer when they work with Algorand. Decentralized exchanges are so important because they give people value for their money.

The short and long-term price prediction on Algorand is as follows:

  • ALGO is predicted to reach $1.90 by the end of 2021
  • A peak of $2.3 is predicted by June 2022
  • By 2023, ALGO is predicted to reach $3.9
  • By 2024, ALGO could reach a price of $5.5
  • By 2025, ALGO is set to reach the $6.5 mark

 

Which wallets are the best option for storing Algorand?

An Algorand wallet is a piece of software where people keep the information they need to get their Algorand (ALGO) money. If you want to send money to someone else, you need to know their private key and their wallet address, also called a public key.

The best Algorand digital wallets are:

  1. The Algorand Wallet
  2. Ledger
  3. MyALGO Wallet
  4. Algorand Core Wallet
  5. Atomic Wallet

 

1. The Algorand Wallet: This is the best way to make transactions on the Algorand Blockchain. It is fast, simple, safe, and official.

This is because the Algorand Wallet was made and is run by the same people who work on the Algorand protocol. The Algorand Wallet will always be the first to offer new Algorand features to users.

Some unique features on the Algorand Wallet include:

  • The ability to transact by sending, receiving, or HODL'ing ALGO and ASA
  • Automatically earn rewards for holding ALGO
  • Optional security enhancements
  • The ability to develop applications using built-in Testnet support
  • The ability to view real-time fiat conversions
  • News updates and notifications when features are updated

 

2. Ledger: The Ledger is one of the most well-known hardware wallets, and many people say it is also the greatest and most safe. If users want to protect the coins of users, hardware wallets are the surest option to go, and the Ledger is not any different. It can completely hide the user's private keys and any personal info, making sure that hackers cannot get their hands on your money.

In contrast to Ledger Live, the Nano S and Nano X both have some support for Algorand. Users can even stake their ALGO’s right from the wallet. When using the Nano S, the user can access the MyALGO web wallet. When using the Nano X, users can gain access to the innovative Algorand Core mobile wallet.

 

3. MyALGO Wallet: It was made by Rand Labs, a group of people who specialize in Algorand technology. The MyALGO wallet is a web-based wallet. The wallet is a safe and easy way to store ALGO, and it can also connect to a hardware wallet like the Ledger to keep coins safer.

So long as the user has access to the internet, they can use MyALGO Wallet on any of the major platforms and with any of the popular web browsers. Users can even use it on their iOS and Android smartphone.

 

4. Algorand Core Wallet: If you have an Android device, you can get the Algorand core wallet from the Google Play store. If you have an iOS device, you can get it from the Apple app store. As the formal Algorand wallet, it is always being worked on, with additional features being added all the time.

 

5. Atomic Wallet: The atomic wallet is a third-party wallet that was made by the same people who made the Changelly crypto exchange. Because it has built-in support for Changelly, users can rapidly and effortlessly swap among more than 60 different types of digital money.

The Algorand coin is one of more than 500 coins that can be stored in the wallet at the same time. There are both desktop and mobile versions of the wallet that can be used to store your money.

The desktop version can run on Windows, Mac, and Linux, while the mobile version runs on iOS and Android.

 

Where can you buy Algorand?

Algorand (ALGO) can be bought on the following popular crypto exchange trading platforms:

  1. Binance
  2. OKEx
  3. Coinbase Pro
  4. Huobi Global
  5. Crypto.com

 

1. Binance: Clients may trade one cryptocurrency for another with minimum fees at Binance, a well-known cryptocurrency exchange. More than 150 cryptocurrencies are available for trading and exchanging on the market.

Binance features fast, comprehensive, and diverse trading systems which are accessible on PC, online, and mobile applications.

 

PROS CONS
Access to more than 150 crypto coins Unregulated
Powerful trading platforms are available No telephonic support
There is the option to buy crypto using a credit card No market analysis
Provides access to a comprehensive training  United States clients are not accepted
Offers 24/7 multilingual support  
Popular exchange with a high trust score  

 

2. OKEx: OKEx is a cryptocurrency exchange that uses blockchain technology to provide financial products to traders all over the world. They provide a web platform and a mobile app for exchanging digital assets.

 

PROS CONS
Offers advanced trading platforms across several devices Unregulated
Offers 24/7 customer support US clients are not accepted
Traders can choose from a wide range of advanced trading tools A limited selection of tradable instruments offered
Beginner traders have access to comprehensive educational materials  

 

3. Coinbase Pro: Coinbase Pro has more sophisticated charting features and tools, as well as a wide range of order types. It also charges low fees for high-volume traders in the US and the EU.

Coinbase Pro has a lot of tools and features that make it a good choice for experienced crypto traders and investors. Beginners might want to think about a Coinbase account or another exchange.

 

PROS CONS
Offers low transaction fees for high-volume traders and active traders Not suited for beginner traders
Interactive features which cater for experienced traders Only offers crypto trading in some regions
Once cash has been deposited traders have access to instant transactions Hawaii residents are not accepted
Strong security and regulatory compliance guaranteed  

 

4. Huobi Global: Blockchain service provider Huobi Global Limited has been in business since 2013. It provides trading platforms for over 234 different crypto assets. They have a daily trading volume of over $9 billion and provide up to three times leverage for spot trading.

 

PROS CONS
Offers several intuitive trading platforms US clients are not accepted
There are a good selection of education material offers Unregulated
Low minimum deposit requirement Only offers crypto trading, no forex trading or stock trading
Customer service is available 24/7  
There is a vast range of crypto coins that can be traded  
Well-known and high level of trustworthiness  

 

5. Crypto.com: Crypto.com is an electronic cryptocurrency exchange situated in Sai Wan, Hong Kong. It is renowned for being among the quickest and most secure cryptocurrency exchanges globally. The Exchange began operations in June 2016 and has already expanded to over 10 million customers.

 

PROS CONS
Educational resources offered Standalone trading tools are not offered
Provides more than 100 crypto coins Unregulated
Offers a powerful proprietary trading platform A limited selection of retail investor accounts offered
24/7 customer support offered  

 

Does Algorand use coin burns?

Yes, Algorand has burnt a certain number of coins.

Algorand Foundation confirms early redemption auction coins would be burned. The Algorand Foundation has confirmed that the “token burn” procedure linked with its August Early Redemption scheme has been completed. Therefore, about 19.9 million ALGO have been removed from circulation forever.

 

What is Algorand’s largest Competitor?

Solana is the largest competitor of Algorand.

Algorand employs an innovative Proof of Stake (PoS) consensus process known as Pure Proof of Stake (PoS).

Although consensus is reached by just participant nodes, the Algorand blockchain is administered by about 100 relay nodes. All of which are now being operated by the Algorand Foundation, Algorand Inc., Algorand's early backers, and the project's numerous university partners.

Algorand can handle 46,000 transactions per second with a near-instant resolution because of its centralized design.

Meanwhile, Solana employs an innovative Proof of Stake (PoS) consensus technique known as Proof of History (PoH).

Although Proof of History (PoH) is not a consensus process in the strictest sense, let us pretend it is for the sake of simplicity. Blocks are timestamped in Proof of History (PoH) by a validator node that is chosen depending on its stake. Anyone may become a validator node, and Solana presently has around 1,000 validators.

While the Solana blockchain is protected by all validator nodes, transactions are distributed among a smaller group of up to 150 validators known as Solana Clusters.

This centralized architecture enables Solana to execute between 45,000 and 50,000 transactions per second with near-instantaneous finality, with a theoretical maximum TPS of 65,000.

Due to Solana's speed, it will suffer similar transaction history storage difficulties as Algorand in the future. Solana's answer is to store this data using Arweave.

Other differences between Algorand and Solana include:

  • Algorand's native currency. It is utilized for staking, transaction fees, and, as of October, governance. But for now, this governance is still restricted.
  • Solana's currency is SOL. It is utilized for staking, transaction fees, and on-chain governance for Solana, although none has yet manifested.
  • The Algorand wallet software has more than 100,000 downloads on Google Play. Solana has at least five million users based on the number of downloads of his phantom browser extension wallet.

 

What is the Staking Process involved with Algorand?

Algorand employs Pure Proof of Stake, a kind of Proof of Stake (PPoS). PPoS is a highly distributed PoS consensus process that requires just 1 ALGO token to participate and secure the network.

Algorand's Proof-of-Stake consensus process pays validator incentives to all ALGO holders. Because of its high throughput capacity and equal community incentives, Algorand can handle the high throughput demands of global usage and a wide range of use cases.

 

What can Algorand smart contracts do?

Algorand, a staking-based public smart contract blockchain, can now host decentralized application development and provide scalability.

Rising Ethereum gas prices have prompted several DApp programmers and decentralized finance (DeFi) investors to explore alternatives, with some resorting to Algorand as an Ethereum alternative.

It also lets developers generate new tokens or move current assets to the Algorand ecosystem via the ASA interface. For example, USDT and USDC are ASAs on the Algorand blockchain, which has greater throughput and cheaper transaction costs than Ethereum.

Algorand has also been set to host the Marshall Islands CBDC, as central banks continue to study networks to house their central bank digital currencies.

Concerning security, basic Algorand smart contracts (ASC1) run as Layer-1 Algorand Smart Contracts (ASC1), maintaining the same degree of security as the consensus mechanism.

Algorand's second layer is for smart contracts and DApps. This network split between Layer 1 and Layer 2 allows Algorand to execute transactions quickly. Simple payments can be handled faster on Layer 1 since complicated smart contracts are off-chain.

 

Is Algorand a Good Investment?

Yes, Algorand is a good investment for the following key reasons.

Algorand shifted the paradigm because it is widely known for its cross-blockchain compatibility. Developers can use Algorand to create digital currencies or smart contracts. This can be done on the 1st layer of the network, designated for this unique purpose.

Layer-1 cryptocurrency technologies are genuine blockchains, but Layer-2 cryptocurrency technologies incorporate an abstract operational model that aids in the efficiency and scalability of Layer-1 assets.

Algorand is a cryptocurrency system that is gaining traction due to its smart contracts and use cases, with engagement in value-added activities is becoming increasingly important for bitcoin users.

 

What is the supply and distribution of Algorand?

Algorand has a fixed supply of 10,000,000,000 ALGO with a circulating supply of 6,331,133,983 ALGO.

  • Fixed or maximum supply can be defined as the total number of coins that can ever be in circulation.
  • Total Supply refers to the number of coins that have been mined, including the missing coins that are no longer in circulation or that have been lost.
  • Circulating supply simply indicates the total number of coins that are in circulation.

 

Is Algorand a viable Alternative Coin?

Yes, Algorand is a good alternative coin in terms of:

  • Hacking – Algorand has not experienced a successful hack.
  • Security – Algorand has robust security features and innovative security protocols.
  • Transaction speed – Algorand can process 46,000 TPS
  • Technology – Algorand uses innovative technology, including Verifiable random function (VRF), Byzantine Agreement Protocol, ASC1 (Algorand Smart Contracts), TEAL.
  • Potential Investment – Algorand shows a significant amount of potential as the adoption and use of smart contracts increases.
  • Popularity – Algorand is part of the top 50 alternative coins in the market
  • Future Uses – Algorand's programmable blockchain means that it has several future uses.

 

What are the differences between Algorand and Bitcoin?

Bitcoin is the original cryptocurrency that functions on a Proof-of-Work consensus mechanism, which is considered extremely detrimental to the environment because of its energy consumption.

In addition, Bitcoin has slower transaction speeds and is constantly struggling with scalability issues. Algorand uses a two-tiered blockchain. The foundation layer allows for smart contracts, asset generation, and atomic exchanges.

This network split between Layer 1 and Layer 2 allows Algorand to execute transactions quickly.

 

  Bitcoin Algorand
Price change 20/21 +400% +280%
Market Cap $800 Billion+ $8.4 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #1 – Original Crypto #23

 

What are the differences between Algorand and Ethereum?

Algorand has been dubbed a token that has the potential to threaten Ethereum's position as the largest and most significant alternative. Here are some distinctions.

Increased costs on Ethereum have prompted DeFi developers to resort to Algorand for application development. Algorand's transaction costs are often cheaper than those of the Ethereum network.

Both Algorand and Ethereum 2.0 produce new coins using a proof-of-stake mechanism. However, members in the Algorand network require just one ALGO currency. Meanwhile, Ethereum 2.0 demands 32 ether, a far higher entrance hurdle.

 

  Ethereum Algorand
Price change 20/21 +880% +280%
Market Cap $460 Billion+ $8.4 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #2 #23

 

What are the differences between Algorand and Dogecoin?

One of the biggest distinctions between the two currencies is supply. Dogecoin has an infinite supply. The coin may expand indefinitely without a cap. 

Algorand has a limited supply which means that over time, as supply diminishes, demand may increase, which will cause ALGO to appreciate.

In addition, Dogecoin is used as a medium of exchange, while Algorand is a programmable blockchain where smart contracts and DApps can be built and launched.

 

  Dogecoin Algorand
Price change 20/21 +7,300% +280%
Market Cap $22 Billion+ $8.4 Billion+
Past Hacks None None
Popularity High High
Altcoin Rank #12 #23

 

What are the differences between Algorand and Neo?

Neo utility is currently inferior to Algorand's and is anticipated to remain so for the near future. This may explain its lower user popularity despite being older than Algorand.

NEO tokens are cheaper to transmit than ALGO, but their transaction speed is around 20 times slower. Less decentralized than Algorand, Neo. This means NEO is less reliable than ALGO but not necessarily less secure.

 

  NEO Algorand
Price change 20/21 +160% +280%
Market Cap $1.70 Billion+ $8.4 Billion+
Past Hacks None None
Popularity Medium High
Altcoin Rank #69 #23

 

What are the differences between Algorand and NFTs?

Nonfungible tokens (NFTs) are digital currencies that have no resemblance in features or value. However, Algorand is fungible, meaning one ALGO has the same worth and attributes as another.

 

What are the differences between Algorand and Solana?

Solana gains adoption and collaborations faster. Algorand has the extremely innovative and excellent tech, but the momentum Solana is gaining is hard to match.

To become a participating node on Algorand, just stake using the native Algorand Wallet mobile app. ALGO staking incentives are now approximately 5% per year, with no lock-up time. Attempting to manipulate the Algorand network will not result in a loss of stakes.

Due to these factors, about 52% of ALGO's total supply is now staked. Strangely, ALGO's stake supply exceeds its circulation supply, but more on that later.

A validator node on Solana requires no minimum stake. To put up a Solana validator, however, requires substantial hardware and technological know-how. Delegation is also available with Solana's Phantom browser plugin wallet.

 

  Solana Algorand
Price change 20/21 +9,300% +280%
Market Cap $54 Billion+ $8.4 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #5 #23

 

What are the differences between Algorand and Cardano?

The distinction between Algorand and Cardano is that Algorand was created to use other technologies with pure proof of stake, whereas Cardano was created to address difficulties relating to operability and simplicity of development.

 

  Cardano Algorand
Price change 20/21 +2,100% +280%
Market Cap $42 Billion+ $8.4 Billion+
Past Hacks None None
Popularity Very High High
Altcoin Rank #7 #23

 

How can a blockchain be considered sustainable?

Some coins use less energy than Bitcoin. Why? Because Bitcoin uses a ‘Proof of Work' method that requires massive quantities of computations (and consequently computing power).

Other currencies that do not need mining, like those that employ block-lattice technology, consume significantly less energy than those that do.

Global finance decision-makers and climate campaigners can work together to promote blockchain as the most sustainable road ahead for a green, digital financial future.

 

Is Algorand a sustainable blockchain?

Yes, Algorand is a sustainable blockchain.

Algorand is a carbon-neutral network that does not entail mining. For a further reduction in environmental effect, it was built to be energy efficient from the start. According to Micali, the proof-of-stake algorithm “drives power consumption to virtual nil.”

 

Which other blockchains are using a Carbon-Negative Network?

Other blockchains that use a Carbon-Negative Network include:

  • Celo
  • Burstcoin
  • Nano
  • Elrond
  • Enjin
  • Wax
  • Nori
  • ClimateCoin