What Is Algorand (ALGO)?
ALGO is the native token of the Algorand crypto platform. Algorand is a permissionless public blockchain. It supports a huge variety of scalable and efficient decentralized applications. If you’re interested in the current Algorand price, check out the ALGO price chart above.
The project's main goal is to use the blockchain platform to create a borderless economy. According to the project, a borderless economy is one in which everything of value can be exchanged completely frictionlessly between two or more parties.
Apart from that, it also aims to solve the scalability issues of other blockchains. One of the major issues facing the blockchain industry is finding the ideal mix between security, decentralization, and scalability, which is what Algorand is trying to do.
It’s important to note that Algorand never forks. It means that the Algorand blockchain cannot be altered in any way, and that neither a soft fork nor a hard fork can occur. This contributes to Algorand’s continued speed, stability, and protection against malicious network attacks.
Algorand employs a unique Pure Proof-of-Stake (PPoS) algorithm. It is based on the Byzantine consensus. The amount of tokens each user has invested in the system determines how much of an impact they have on the decision to create a new block. To propose blocks and cast votes on proposed blocks, users are chosen anonymously and at random. Every online user has the opportunity to be chosen to vote and make a proposal.
Besides, PPoS does not require users to set aside a portion of their stake in order to participate in the process of consensus. Thus, it does not limit a user's capacity to spend their stake. Algorand stakers are allowed to use their stake whenever they choose because it’s not locked in a staking pool.
The use of such a consensus mechanism reduces the need for unnecessary electricity use. In addition to that, it enables the processing of a considerably higher number of transactions per second without compromising decentralization.
The Story of Algorand
The Algorand network was founded by Silvio Micali in 2017 at MIT (since the founder is an MIT professor himself), but released to the public only on June 19th, 2019. On the same day, an Algorand ICO was held, during which the ALGO price was $2,4. It was organized as a Dutch Auction, meaning that the price was meant to decrease during a certain time period. The ICO resulted in over $60 million that was dedicated to the development of the Algorand crypto project.
Apart from being a founder of Algorand, Silvio Micali is also a professor of computer science at MIT. Besides, his work in the fields of secure two-party computation theory, electronic money, and various blockchain or crypto protocols earned him the Turing Award in 2012.
The Purpose of ALGO Coin
ALGO is the utility token of Algorand. The token is scalable and really fast. It allows users to complete transactions in roughly 3.3 seconds, no matter if it’s the first transaction of the day or the millionth. Besides, ALGO transactions are really low-cost compared to some other crypto assets.
The main use cases of Algorand tokens are the following:
- ALGO is used to secure the PPoS consensus mechanism used in the creation process of each block;
- ALGO is used as a payment method for transactions on the Algorand blockchain;
- ALGO is used as a governance token, providing users with the ability to participate in the decision-making processes.
The Tokenomics of ALGO
The maximum supply of ALGO coins is 10 billion. During its initial ICO, 25 million tokens were distributed. Overall, the project seeks to distribute 600 million coins in an auction that is planned to occur every 5 years until the max supply is reached.
Algorand announced a 200 million ALGO staking incentives program in August 2019. In order to get rewards, users had to register their wallets before the 1618450th block was created, which happened by the end of August. Those who managed to do that had to undergo the KYC (Know Your Customer) process in order to receive their rewards.
However, this program was stopped in April 2022, and staking rewards were replaced fully with governance rewards. That said, a new staking program is planned to launch in Q4 2024.
If you want to buy Algorand coins, just be aware that the ALGO price is subject to fluctuation. Similar to how the prices of the majority of crypto assets are affected, the Algorand price is also impacted by a variety of factors that affect the whole crypto market.
The London Bridge
Despite promising low-cost transactions, minimal latency, and excellent scalability, Algorand has had trouble luring liquidity to its ecosystem. As the Algorand Foundation announced in February 2022, it will implement the London Bridge on the Algorand network. The foundation has dedicated $10 million for that.
In essence, the London Bridge is a trustless bridge that would provide Ethereum compatibility to the Algorand network. The bridge would allow Algorand to link various decentralized applications (dApps) to its blockchain this way drawing in more liquidity.
Algorand chose to do that specifically with Ethereum since it has one of the most developed dApp ecosystems. However, in the future, Algorand plans to connect to even more blockchains, which would eventually allow it to establish a strong and stable DeFi ecosystem.
