Algorand is a Proof of Stake Blockchain with a fast network and inbuilt layer two solutions that help it scale without any external scaling solution. It was developed by Silvio Micali, an MIT professor and a Turing Award winner.
Silvio Micali developed the Algorand Blockchain in 2017. Algorand Inc handles the technology, and the Algorand Foundation runs the blockchain. The former, Algorand Inc, is a private company based in Boston and overlooks the core development of the Algorand Protocol. Algorand Foundation overlooks Governance, Funding, Rewarding, Ecosystem Growth, and Cryptographic Research.
Algorand was brought into existence to address a few problems and assumptions of Bitcoin. They are:
- Wastage of Computational Power: The Bitcoin protocol requires huge computational resources. One Bitcoin Transaction consumes as much electricity as required by an average US Household in over 50 days.
- The concentration of Power: Due to increasing difficulty, it is almost impossible for a small-time miner with a desktop to contribute to the network without incurring losses. This shifts the power to big players who dominate the current bitcoin mining landscape. Such domination goes against the spirit of decentralization.
- Delayed Block Verification: Only after several blocks have been generated, i.e., 6 to 7, can one be sure that a particular block has been added to the blockchain.
The ALGO cryptocurrency is the native token of the Algorand blockchain.
Algorand was founded by a team led by Silvio Micali, a distinguished Massachusetts Institute of Technology professor. Micali is a professor of Electrical Engineering and Computer Science. His research is primarily concerned with cryptography and information security. For his efforts in the field of cryptography, he received the Turing Award.
What is so special about Algorand?
The unique thing about the Algorand blockchains is its architecture which uses a dual blockchain layer. It is designed to be a blockchain similar to Ethereum but with faster transactions and greater decentralization.
The problem with Bitcoin and Ethereum was that they could not achieve a decent speed of transactions though being secure and decentralized. Binance’s BNB Blockchain achieved speed and security but is not decentralized. This problem was called the Blockchain Trilemma.
Algorand solved the Blockchain Trilemma of achieving SPEED, SECURITY, and DECENTRALIZATION, all at the same time through its unique consensus algorithm.
A consensus algorithm is a method for validators to agree on which transactions are legitimate and which ones to add to the blockchain.
Algorand has a unique consensus algorithm that uses two layers of a blockchain. It is called as Pure Proof of Stake consensus mechanism. Here, you do not explicitly need to stake coins to become validators. Anyone, even with a Raspberry Pi, can operate a node and become a validator.
A fun fact about Algorand is that it rewards anyone who holds ALGO coins. That’s it! No staking or lending is required need to hold them. The rewards are 4-6% APY.
The base layer(Layer 1) supports smart contracts, tokens, and NFT creation. It basically does all the simple tasks. The nodes(validators) chosen to verify any given transaction are chosen randomly. Only a handful of nodes verify any given transactions(say 24-35%) rather than making consensus across all nodes.
The inbuilt Layer 2 supports all the heavy lifting, such as bigger dApps, and complex smart contracts. It can also process 1000 transactions per second(TPS). But the Layer 2 is off the chain. To make it more secure, snapshots(work samples) of Layer 2’s works are sent to Layer 1 to verify them, adding the on-chain level of security.
This allows Algorand to process transactions faster while also being secure.
Tokenomics is a very important aspect you should consider if you are willing to invest in any cryptocurrency.
Cryptocurrencies with a limited supply are deflationary, meaning their value will increase if all factors remain the same. For example, Bitcoin is deflationary, with a max supply of 21 million coins.
Cryptocurrencies with an unlimited supply are inflationary, meaning they will lose value over time if all factors remain constant. For example, Ethereum.
Algorand is a deflationary cryptocurrency due to its limited supply (10 Billion Tokens). This is necessary as the new tokens which are to be rewarded(for Governance and nodes) are to be minted and not collected as transaction fees. This helps keep transaction fees lower.
Read More on Inflationary and Deflationary Cryptocurrencies.
The following are the basic Tokenomics of Algorand:
- Max Supply: 10 Billion
- Circulating Supply: 7.32 Billion (2 Sep 2022)
- Market Cap(as of 2 Sep 2022)at current price: $2 Billion at $0.29.
- Fully Diluted Market Cap at the current price(2 Sep 2022): $2.9 Billion
Note: Fully Diluted Market Cap is the market cap if all the coins are in currency supply at the current price.
Governance takes place over three months periods and is taken care of by the Algorand Foundation. Each governance period consists of the following:
- A sign-up phase
- A voting phase
- A rewards phase
You need to sign up during the first phase at the Governance Portal to be able to become a governor.
Why should I participate in the Governance?
The Governance mechanism controls the future of the blockchain. As an AGLO holder, your voice matters to everyone in the system.
Further, the rewards in Governance are also quite attractive. The last few cycles saw a 10.02% – 14.05% APR yield for governance participation.
The Algorand Foundation oversees the governance of the Algorand Ecosystem. It collaborates with several other institutions, developers and students to help make the algorithms even better.
The foundation is led by a Board which consists of Kieron Guilfoyle(Chair), Phillip Taverne, Staci Warden(also CEO), Pino Persiano, and Christopher Bowring.
Other senior executives are (list non exhaustive):
- Staci Warden(CEO)
- John Woods(CTO)
- Deirdre Halligan(COO)
- Harpal Singh (CFO)
- Shamir Ozery(Head of Web3)
- Adriana Belotti(Governance Program Manager)
- Ryan Terribilini(Head of Ecosystem Funding)
- Piergiacomo Palmisani(Head of Gaming)
- Min Wei(Global Head of Ecosystem Growth)
- Michael Teh(Head of Finance)
- Massimo Morini(Chief Economist)
How to buy Algorand?
Now, if you are willing to buy Algorand, let me tell you how you can do it with the least effort and when is the correct time to buy.
You can buy Algorand from centralized exchanges for cash via credit card, P2P, or Bank Transfer, or you can use Binance swap for crypto that you already have.
Buy from Centralized Exchanges via Bank Transfer, P2P or Credit Card
Log in to a centralized exchange such as Binance or Coin DCX. These are the two tnally use.
- Login to your account on Binance, CoinDCX, or any exchange of your choice.
- If you are using Binance, click on Buy Crypto (with your preferred payment method) on the top left. Select your currency, select the crypto you are willing to buy, and finish your payment.
- If you are using Coin DCX(for Indian users), transfer your funds to the exchange by IMPS. Go to Trade on the top menu and click on Spot. From the left panel, choose ALGO and fill in the details of the ALGO amount that you want and complete the transaction using Transaction Password.
Best Wallet for Algorand
The best wallet for Algorand is the Pera Wallet. However, you can use Metamask or Coinbase wallet too.
For best results and unhindered trading for small users, exchange wallets are best because if you transfer small amounts of tokens to wallets, there is a minimum threshold and a fee.
However, if you still wish to have your ALGO in a wallet or if you have decent funds in ALGO, you should use a software wallet.
- Metamask is the most popular software wallet that is available for iOS, Android, and as a Chrome Extension.
- Pera Wallet is considered the best wallet for ALGO by Algorand itself. It is also endorsed on their website.
- You can also use Coinbase Wallet, another popular non-custodial wallet by Coinbase.
Algorand Price Analysis and Prediction
It isn’t very intelligent just to buy a cryptocurrency without any analysis of its price. Every cryptocurrency’s price fluctuates in certain patterns. We can identify these patterns through different methods, such as Technical Analysis and On Chain Analysis.
To get the most benefit out of your money, make sure you buy as low as you can. We use technical analysis to identify such points where there is an upside.
Read the Latest ALGO Price Analysis and Prediction here:
11 Sept 2022: Algo Price Analysis.
How many Algorand coins are left?
As of now (2 Sep 2022), there are 2.68 Billion (2,678,458,141) Algo coins left to be minted.
What is the purpose of Algorand?
The purpose of Algorand is to present a scalable, secure, and decentralized blockchain, thereby solving the issue of Blockchain Trilemma.
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