Cryptocurrencies and blockchains have been around for over a decade. To ensure they can still give users relevant services, they need to be frequently updated and improved. One of these new and improved innovations is Algorand (ALGO) cryptocurrency.
A blockchain network designed by MIT professor Silvio Micali in June 2019, Algorand is made to improve upon the limits of cryptocurrency networks like it. These improvements then allow you to explore the blockchain features and use them for your needs.
To know more about this groundbreaking crypto in detail, join us at Cryptoshimbun as we discuss ALGO and why you should invest in this cryptocurrency today in the sections below.
What is Algorand?
Algorand is a cryptocurrency blockchain that aims to improve the speed and security of crypto transactions and the decentralisation processes of blockchains. Like many decentralised networks like it, Algorand has its own cryptocurrency named ‘ALGO’.
Currently valued at $0.8634/token, ALGO is ranked the 29th most valuable cryptocurrency with a market cap of $5 billion. It’s used to both pay for fees in the network to create programs and allow users to vote in various updates in the system.
Algorand achieves these by utilising a proof-of-stake mechanism unique to the network.
How Algorand works
The Algorand blockchain runs on a Proof-of-Stake (PoS) consensus mechanism. This means that anyone with the network’s cryptocurrency, ALGO, can take part in decision making when updates and block validation processes are active.
To decide who gets these voting powers, a random group of investors are arbitrarily selected by the Algorand network heads to briefly validate and approve transactions for every brand-new block within the chain.
If you’re chosen as an approver/validator and your tenure becomes over, your batch is then replaced by a new group as new blocks within the chain are made. Because of this process, no one group of people can dictate what happens in the network, making it decentralised and safe.
So long as you have ALGO tokens in the wallet, you can become a member of these validator teams. Once you do, you can speed up the approval/validation processes within the blockchain network since there are no high requirements to be met.
Then overtime, as more members join the Algorand blockchain and widen the range of possible validators, the transaction processing rates become better.
Features to expect in the Algorand crypto network
Now that you know what Algorand is and how it works, below are some of the features you can enjoy by being a part of this network.
Some people have always been hesitant about cryptocurrencies since mining them consumes a lot of energy and environmental resources. This especially applies to the proof-of-work consensus mechanism where miners race one another to solve mathematical problems and validate transactions.
Fortunately, this is not an issue in this blockchain since it uses the aforementioned Proof-of-Stake mechanism where validators are chosen beforehand and work is distributed.
As a result, energy is conserved since this process doesn’t require as much energy when compared to solving complex maths problems.
Faster transactions than Bitcoin
Bitcoin is the most famous and well-invested cryptocurrency token, but it is not the fastest way to transact with. Due to this, any transactions that need to be accomplished immediately are placed on waiting lists. This is because in Bitcoin, the network only processes 7 transactions per second (TPS).
Learning from Bitcoin’s problems, Algorand creators made sure this won’t be a problem in their network. Thanks to their proof-of-stake system, Alogrand’s blockchain network famously makes 1,000 TPS and processes transaction finality in less than five seconds.
Build your own content within this network
In this blockchain, not only can you do crypto transactions, but also develop whatever you can think of such as crypto blockchain networks with local tokens and decentralised apps (dapps).
This means two things: firstly, web developers can build their own cryptocurrency blockchain networks on top of Algorand, making the process easier and more efficient. they can also create their blockchains’ respective native tokens.
Second, decentralised apps means software that offers a variety of different and highly-secured services to various niches such as businesses. This gives you better business opportunities as your software creations help more people out.
Minimal transaction costs
It’s not ideal to spend your hard-earned cryptocurrencies paying for large transaction fees. When investing in Bitcoin, you’d need to spend a minimum of 0.00056 BTC ($24) to 0.00072 BTC ($31) per transaction for yours to be added to the high-traffic crypto network. This high price is because of the intensive Proof-of-Work processes miners have to undergo to approve and validate your transactions.
Fortunately, the Algorand network uses the aforementioned Proof-of-Stake process that’s not as expensive to accomplish. Because of this, the transactions within this blockchain only costs 0.001 ALGO ($0.860631).
Blockchain rewards are split with everyone
For crypto miners, the greatest benefit they can enjoy is receiving cryptocurrency as payment for their hard work. As they continuously validate blocks within the chain, they mine new tokens in the network and get paid for doing so. However, since these validation processes are challenging, not all investors want to be a miner.
In the Algorand blockchain, everybody earns a little extra! Whether you’re a miner or an investor within the chain, tokens valued at 5-8% are given to everyone in the Algorand blockchain.
Occurring every 10 minutes, this generous process is made to inspire users to take part in Algorand staking platform and accelerate the path to decentralisation. To enjoy this benefit, you will need to store your ALGO tokens inside a non-custodial wallet. That way, whenever new blocks are created and validated within the network, you’re immediately paid off.
Use for essential activities
Through this blockchain platform, you can do the following essential activities:
- Process payment transactions
- Settle healthcare expenses
- Settle real estate expenses
- Back-up your essential data.
So should you choose to take part in this blockchain network, not only can you enjoy incredible benefits and features, but you can also do the necessary activities you need to do on a regular basis.