There is no doubt that more people are interested in cryptocurrency than ever before. This is partly because of the simplified and detailed instructions that guide potential Cryptocurrency investors and assure better chances of success.
The rise in investors has also pushed creators to create new, diverse, and better digital currencies in one way or the other. We shall look at a relatively new digital currency that is taking the market by storm. It is known as algorand (ALGO). We shall look at the finer details of this new digital currency and help you understand it better.
What is Algorand?
Launched by Algorand Foundation in 2019, this young currency on the block is said to overcome the three principal deficiencies of the original and most common cryptocurrencies. It is a product of MIT computer scientist and professor Silvio Micali.
It has been thought that this not-for-profit company has succeeded, where many have failed because it was worked on by some of the brightest minds from top-tier universities like UC Berkley and MIT. The company also has branches and accelerator programs that have contributed to the perfection of algorand, namely the Asia and Europe Algorand Accelerator programs.
What Shortcomings Has Algorand Overcome?
Apart from serving as part of the blockchain, it also works as a digital currency. Many users have been drawn to buy algorand due to its overcoming shortcomings witnessed in other digital currencies. Other features set algorand apart, such as;
- Transaction finalization speed is one thousand transactions per second (TPS), which is quite helpful for a network that prioritizes payments. Its five-second TPS towers over other cryptocurrencies, including Bitcoin, with its nine-minute TPS.
- The users enjoy better security from the pure-proof-of-stake mechanism that decentralizes and randomly recruits the participants at a given time.
These two features cover the tri-issues that have marred other digital currencies by increasing speed and conquering security shortcomings using the decentralization consensus mechanism.
How Did Algorand Overcome the Blockchain Shortcomings of Other Cryptocurrencies?
The pure-proof-of-stake (PPoS) is the golden key focus of algorand and has been pivotal in its superiority. How was this achieved?
- The collaborative use of the Byzantine Agreement mechanism and pure proof-of-stake prevents the addition of two blockchains simultaneously. This system created an incorruptible path that assures speed.
- Algorand uses a two-tiered design that works fast to run complicated applications. Tier 1 creates Algorand Standard Assets to sustain the algorand ecosystem by representing existing and new tokens. Tier 2 helps this blockchain to handle smart contracts at the same speed as large payment networks.
- The system reduced the chances of an enemy targeting a user using cryptographic sortition that allows the users to elect to become committee members.
- A two-thirds stake of honest users is sufficient to allow algorand to create weighted users and manage dishonest users.
- The blockchain technology used helps increase scalability by giving different users in the committee a step of its protocol.
What are the Benefits of Algorand?
By overcoming core problems that have plagued its competitor digital currencies, algorand has set itself above the rest. As it picks considerable speed, it is essential to note some of the benefits this Cryptocurrency provides. These merits are;
- As a blockchain technology, algorand has stopped forking, thus preventing interference with final transactions.
- The use of relay nodes allows token users to communicate better and also conveniently vote for changes.
- The miners are selected randomly regardless of their investment, reducing the chance of rewarding the most affluent stakeholders.
- Blockchain information is constantly compressed, which reduces the data burden on the algorand users.
- When you buy algorand, you are also doing your part to keep carbon emissions low since this digital currency, unlike its competitors, is carbon-negative.
What is the Current Algorand Price?
Despite being relatively new to the market, algorand has quickly shot up to the 34th position in the most valuable coins as tracked by CoinMarketCap. Algorand has a maximum supply of ten billion; thirty percent of this is rewarded to users who maintain and improve the network.
Having a rocky entry saw the price of algorand vary majorly to a reported high just slightly above two US dollars and a low of ten cents. There are three billion tokens in circulation. Based on its impressive features, the ecosystem is set to develop more as more users participate.
Is Algorand a Threat to Ethereum?
Many Cryptocurrency users have bated algorand as a worthy competitor in the alternative coins scene, especially for the leading altcoin, Ethereum. Some of the reasons why algorand may be a threat to Ethereum are;
- Low transaction fees on algorand attract DeFi developers, further enhancing this digital currency to the detriment of Ethereum.
- Ease of entry for participants on algorand works to its benefit. This is because users need one ALGO to participate in the network versus the thirty-two ether required by Ethereum to participate.
As algorand works with a decentralization mechanism, the future looks bright for this digital currency as the next best altcoin.
How and Where Can You Buy Algorand?
Initiate a buy order for ALGO on a suitable trading platform such as Coinbase, SoFi or Kraken using your local currency. The ALGO can be stored in a self-hosted wallet.
Does Algorand have Demerits?
Even the best digital currencies have their demerits, and algorand is not any different. The current issue is that despite the ground-breaking improvements in solving the three main downsides of other cryptocurrencies, its uptake is still relatively low.
This lack of users may eventually lead to the devaluation of algorand. Users seem a bit skeptical to fully immerse themselves in algorand because of its lack of a clear path to future gains and inability to reach its initial sale price.
Having the correct information is vital before choosing any Cryptocurrency, and the information above puts you in a better position to decide. As listed above, the workings, benefits, and demerits of algorand will help you opt-in or otherwise on this new and revolutionary approach to digital currencies.