Now that the industry of cryptocurrency is on its way to massive mainstream adoption, the problem of scalability remains unresolved. For instance, despite being ranked 1st among the cryptocurrencies in the market due to its market cap, Bitcoin can only process 7 transactions per second. This is extremely slow when compared to Visa, completing 1,700 transactions in just a second on average.
To address the problem, digital currencies that focus on scalability, efficiency and speed are now emerging left and right. This includes the Algorand cryptocurrency—a blockchain protocol that aims to be secure, decentralised and scalable at once.
Curious to know more about this innovative digital asset? Continue reading below for more information!
A quick look into Algorand cryptocurrency
Founded in 2017 by Massachusetts Institute of Technology (MIT) professor Silvio Micali, Algorand is a cryptocurrency and blockchain protocol that focuses on scalability. It is an open-source and permissionless blockchain ecosystem, aiming to bridge the gap between traditional and decentralised finance. The platform has also collaborated with the leading exchange sites in the market such as Binance, Coinbase, Ledger and FTX, among others.
What makes Algorand a better option than other cryptocurrencies is its speed and efficiency. Since it was originally designed to focus on payments with a goal of near-instant finality, it can process up to 1,000 transactions per second (TPS).
How it works
Unlike most cryptocurrencies like Bitcoin which operate on a proof-of-work (PoW) network, this digital asset uses a consensus algorithm called proof-of-stake (PoS).
So, what makes proof-of-stake (PoS) different and superior? Within the blockchain network of Algorand, only several miners will be rewarded with ALGO cryptocurrency (the network’s native token) after they have successfully contributed their computer’s processing power onto the blockchain. However, the miners are randomly assigned, making it fair and square for all the participants involved. Because of this network’s design and mechanism, Algorand offers its top-notch speed feature.
In addition, the platform uses a variation of PoS called pure proof-of-stake which requires low minimum staking for users who wish to participate in the network. You are only required to pay 1 ALGO to enter the platform which is a lot cheaper than Ethereum’s 32 ETH minimum stake.
Since Algorand cryptocurrency operates on staking, it can handle various decentralised applications (dApps) throughout the network with better performance. This is the reason why some crypto investors have shifted from Ethereum to other blockchain alternatives like Algorand and Solana due to lower gas fees and reliability.
Should you buy and invest in Algorand?
There’s no denying that major cryptocurrencies like Bitcoin, Ethereum and Dogecoin are taking the world by storm, attracting new investors to enter the world of digital assets. However, there are lesser-known cryptocurrencies like Algorand that can compete in the market since it has always been focused to solve the crypto trilemma (security, decentralisation and scalability).
So, why should you invest in Algorand cryptocurrency, especially when you’re a novice investor? Here’s why:
Lesser energy consumption
One of the reasons why a huge chunk of the general public is still hesitant to participate in the crypto ecosystem is because of its detrimental effects on the environment. Even though you’re not exactly a fan of digital assets, it’s hard to avoid the criticisms against mining Bitcoin and its required level of energy, with each transaction consuming up to 1,173 kilowatt-hours of electricity.
However, Algorand cryptocurrency boasts of its concern for the environment by developing a public blockchain that operates on proof-of-stake. With this, the electricity consumption required for mining tokens almost drops to zero, making it the ideal option for crypto investors who want to go green.
The platform has also partnered with ClimateTrade—a carbon credit marketplace that allows blockchain companies to monitor and offset their carbon emissions, helping them achieve a zero carbon footprint.
Algorand has all the three main features you’re looking for—trustworthiness, speed and transparency. For instance, if you want to transfer your ALGO funds to another wallet, the system can process the transaction in just under 4.5 seconds.
This means that you won’t have to worry if your payments have been transferred. And since the blockchain was developed for the sake of scalability, billions of participants joining the network will not affect the processing time in any manner. No more waiting time!
A brilliant founding team
A cryptocurrency’s success along with the technology that powers it will never be possible without its founding team. Luckily, the Algorand cryptocurrency is developed and monitored by a founding team consisting of professionals that are experts in their respective fields.
This includes Silvio Micali, the founder of Algorand. He has unparalleled expertise when it comes to secure protocols, cryptography, zero-knowledge and pseudorandom generation, to name a few. Micari is also known to be the co-inventor of various protocols such as the Verifiable Random Functions and probabilistic encryption, giving birth to the foundations of modern cryptography the world knows today.
Another part of the Algorand team is Sergey Gorbunov who is the head of the cryptography department. He also works as an assistant professor at the University of Waterloo, focusing on various aspects of foundational cryptography and blockchains. In fact, his dissertation on utilizing advanced cryptographic protocols through lattice-based cryptography has won awards.
Algorand cryptocurrency: Addressing the blockchain trilemma
Although cryptocurrencies and blockchains have made lots of developments all over the years, many digital assets are still falling behind when it comes to speed and scalability. This is why it’s slowly becoming one of the most sought-after cryptocurrencies because of how it addresses the blockchain trilemma. With that, it now ranks as the 25th crypto with a market capitalization of US$6,089,354,136 as of writing.
Just like Solana and Polkadot, it is also considered to be one of the Ethereum Killers—offering cheaper gas fees and faster network performance for decentralised app developers. In fact, in the near future, Algorand aims to process 3,000 transactions per second, making it one of the most efficient payment options.
For more updates on the Algorand blockchain network, stay tuned here at BTC Post!
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