What Is Algorand?
Algorand is a decentralized and open blockchain system, which boasts almost instant transactions and a capacity to accommodate billions of users on its platform. Algorand’s founder is Silvio Micali, a Gödel Prize holding MIT professor and Turing award winner, who aimed to create a platform that would be truly decentralized, scalable, and secure. Algorand attempts to overcome both the challenges of lack of transparency, access, and accountability inherent to centralized economies and the technical hurdles that inhibit other blockchains from realizing these goals. ALGO is the cryptocurrency of the Algorand blockchain.
All of the available ALGO tokens, amounting to 10 billion, were created at the launch of the blockchain. As of June 2020, Algo supply was allocated as follows: 2.5 billion in sales to the community, 1.9 billion in incentives and ecosystem support, 3.1 billion to early relay node runners (program closed), 2.0 billion to Algorand Inc, and 0.5 billion to the Algorand Foundation. The sales plan for 2020 is up to 150 million tokens.
One of the things that make the Algorand platform standout is its use of the PoS (Proof of Stake) consensus protocol as the basis for new block generation within the blockchain. Each active user is potentially able to participate in the formation of a new block, with the probability of this depending on the share of the tokens owned by the user. The Algorand consensus protocol randomly selects users to propose and vote in order to generate new tokens. The reward period is 500000 blocks.
ALGO can be purchased with Ethereum on such cryptocurrency exchanges as Binance, Kucoin, and Huobi.
Pros and Cons of Algorand
Advantages of ALGO
- Speed of transactions: payments are processed in under 4.5 seconds.
- Capacity: Algorand is built in such a way that it can accommodate billions of users.
- A borderless economy: Algorand seeks to create a platform that would accommodate users from any location.
- The PoS consensus protocol, unlike PoW (Proof of Work), does not require users to possess top-tier mining equipment, avoids "wasted" effort by those who did not get a chance to participate in new block formation, and promotes honesty among the majority of users.
- Algorand’s potential has been recognized internationally, with the Marshal Islands declaring their intention to use the Algorand protocol for their digital currency
Disadvantages of ALGO
- Algorand community is fairly small at the present moment (there are currently about 6,5 thousand total subscribers of r/algorand/ and r/AlgorandOfficial on Reddit, 29,148 Twitter followers, and 1,845 followers of the Algorand page on Facebook).
- ALGOs are subject to high inflation, as the total number of coins is 10 billion.