The cryotocurreny market is now booming with opportunities. Just like when Bitcoin came to existence back in 2010 and perpetually conquered the market in a decade, a wide variety of new assets and tokens are now emerging to have a share in the future of digital financial markets. Among these projects, some have a clear, promising roadmap which makes them fascinating assets to invest in. Kind of a déjà vu for when Bitcoin was struggling in its early days. Algorand might be one promising project. Learn more about it here, and you might decide to be one of its early investors on Bitunivex.
What Is Algorand?
Algorand is a blockchain protocol developed in 2017 by renowned Italian computer scientist, Silvio Micali, offering highly customizable smart contracts (ASCs) in a decentralized network. Algorand is composed of a research foundation known as Algorand foundation and a private company in Boston, monitoring core developments of Algorand protocol. The cryptocurrency native to Algorand is called ALGO.
The consensus algorithm used in the protocol utilizes a byzantine agreement that leverages proof of stake. Through this agreement, a consensus is achievable without a central control unit, as long as the stake in malicious hands is negligible in contrast to the stakes in non-malicious hands. Algorand aims to tackle fundamental technical complexities such as scalability, security, and decentralization through its visionary team of academics with computer science and cryptography backgrounds.
Key Design Features of Algorand
- Pure proof of stake algorithm ensures that users can choose a new block based on the number of stakes in the system. In other words, a user’s influence on the choice of a new block is proportional to the number of ALGOs they hold.
- To propose a block in the Algorand network, users are secretly and randomly selected to participate in the Algorand consensus protocol. At every round of block selection, new participants take part in the protocol. This replacement of participants helps maintain network security and integrity because the network selects a new set of random users at every step.
- Algorand system has achieved complete decentralization. All nodes are run by diverse, randomly selected users worldwide, with no central control unit monitoring or modifying the events.
- Algorand network is an open-source environment in which no particular set of skills or hardware is essential to take part in block consensus. Any user online in possession of ALGO can automatically read the blocks or write transactions in future blocks.
A Deeper Dive into the Algorand System
Consensus consists of three steps: proposal, confirmation, and finally, writing the block into the system. The steps are proposed, soft vote, and certify the vote.
The network selects accounts during the initial phase to propose a new block for the system. In this phase, nodes loop through their forming accounts. Suppose the network finds a participating online account. In that case, Algorand’s VRF performs a quick check-up to determine whether the account is eligible to propose the block. The process is very similar to a weighted lottery. The account with the most stakes (ALGOs) has the highest chance of block proposal.
Once the network selects the proposing account, the algorithm moves on to the next phase, the soft vote phase. In this section, the algorithm makes sure only one block is certified since the network circulates multiple proposal messages among different system nodes.
After that, the network double-checks the proposed block in the certify vote phase. A new set of random users form a committee and check for over-spending, double-spending, or potentially problematic signs in the proposed block. If the block is validated, it gets voted again as the chosen block.
Token Supply Overview
ALGO is the native cryptocurrency utilized in Algorand networks. The distribution of this token is as follows:
- 25% of all token supply goes to team foundation and investors
- 30% of all token supply is on sale for the public
- 25% of all token supply compensates Node Running Grants
- 17.5% of all token supply goes to participation rewards
- 2.5% of all token supply goes to end-user grants
During two separate private sale events held by Algorand. Inc in February 2018 and October 2018, equity investors helped raise a total of $66,000,000 for early-stage development purposes.
As for public sale events, a series of auctions distributed ALGO tokens. During the first auction in 2019, a total of 25,000,000 tokens were sold for $2.40, raising $60,000,000 as capital. Algorand will continue to hold annual auction events, aiming to distribute a total supply of 600,000,000 ALGO per year until 2025.
As reported by Algorand, Inc. in 2019, the company allocates 52% of all funds derived from token distribution to research and development. About 18% goes to community and marketing purposes, and the remaining 30% flows into the general and administrative areas of the network.
Algorand Roadmap and Business Development
Every 3 to 6 months, Algorands seeks to deliver big protocol upgrades to enhance the project’s integrity. On top of that, Algorand is an open-source network and accepts contributions from users. Thanks to its low-friction upgrade capability, the network delivers new releases without disruption.
The Vault system is one of Algorand’s future capabilities to separate recent transactions from account balances, enabling vault to delete old states.
Pixel is another upgrade to be presented by Algorand, enabling users to sign a common message in a digital signature scheme, guaranteeing security and speed.
Furthermore, Algoran’s Atomic swaps will make cross-chain and intra-chain atomic swaps possible and instant.
Algoran’s post and sale trades will enable sellers to post their property along with price and terms. As soon as a buyer notices the offer and accepts it, Algorands makes the trade, even without involving the seller.
Algorand has been cooperating with different networks and commercial partners such as Syncsort, TOP Network, OTOY, Asset Block, and Flipside Crypto and is looking forward to extending its network in the future.
Community and Social Links
Algorand aims to facilitate the adoption of the chain by providing clear documentation, forums, campaigns, and tools. Algorand claims to have a new approach to blockchain, with full transparency and security and a speedy decentralized network that scales up to the needs of billions of users. Algorands is constantly seeking to expand across the globe through different campaign programs and ambassadors worldwide who contribute to the network expansion in many ways. Algorand’s website provides a more detailed and full report of its ambassador program and related social activities.