What is Algorand?
Algorand is among various new projects seeking to expand the possible use cases for cryptocurrency by reducing the time it may take transactions to final and accelerating the transaction speeds on the network. It was officially launched in 2019 and aimed to achieve these attributes through different decisions that deviate from how the cryptocurrencies have typically been designed.
Algorand distributes the ALGO cryptocurrency introduced to its economy with a new block to everyone who has a certain amount of currency in the wallets. Algorand also helps the users create smart contracts and tokens that can represent the existing and new assets.
Why Algorand has value?
Algorand is quite a new public blockchain, and people may not have seen much of the testing under real-world market conditions. Many people find it valuable when they look at its technical specifications because it may become the blockchain of choice for the developers who would like to design and launch new types of decentralized applications.
For investors, Algorand is a viable part of the cryptocurrency portfolio if they believe in proof-of-stake blockchains, as this lowers the cost of participating in the blockchain operation. Therefore, it may ultimately prove to be successful in the market.
Algorand Foundation is a non-profit organization overseeing and funding the protocol development. It says that 10 billion units of ALGO cryptocurrency will be created. Algorand maintains a block explorer, and this keeps an official count of the circulating supply.
The foundation expects the schedule of distributions to be completed within the five years of the protocol launch.
- 3.0 billion
This is the estimate of the ALGOS to be injected into circulation in the first five years.
- 1.75 billion
These are the estimated participation rewards that will be distributed over time.
- 2.5 billion
This is the number of the relay node runners that will be distributed over time.
- 2.5 billion
For Algorand Foundation and Algorand Inc.
- 0.25 billion
These are the end-user grants to be distributed over time.
Critical properties of Algorand protocol
- Low computation requirements
With the Algorand protocol, one doesn’t need high energy-consuming mining farms.
- Fast agreement
The entire community agrees on the next block, and it confirms transactions with latency on a minute order while scaling to many users.
If the token holders wish to participate in the consensus, they can delegate their tokens.
- Meager fork profitability
As soon as the new block appears, the users can rely on it. If the network is temporarily partitioned, Algorand makes sure that the users have no divergent views of the confirmed transaction.
As we have seen a high fee in the Ethereum network, there was a need for a decentralized and smart contract platform that can scale. Algorand can meet the perfect trifecta of being fast, decentralized, and secure. Although Algorand has a long way to go before it is to rival Ethereum’s adoption, this technology is right. At the same time, its token distribution model is a great way to incentivize people to invest in the project.