Predominantly, blockchain projects revolve around three core concepts: decentralization, scalability, and security. However, these core concepts have also become well-known as the “blockchain trilemma,” where at least one aspect of the blockchain platform has to be compromised to accommodate the other two. In 2019, Silvio Micali, an MIT professor and recipient of the Turing Award, proposed an answer to this challenge in the form of Algorand. Asking yourself what is Algorand? Let’s delve into it.
What is Algorand (ALGO)?
Algorand is an open-source, decentralized blockchain network with ALGO as its native currency. Algorand solves the trilemma with its permissionless access, internally designed Pure Proof-of-Stake protocol built on Byzantine consensus, instant verifiability, and a transaction management system with high scalability.
The Boston-based project revolves around the concept of “democratic” user participation. Unlike Bitcoin and other cryptocurrencies that use mining-based Proof-of-work algorithms, Algorand proposes upgraded Proof-of-Stake and self-validating transactions.
Connecting your Algorand Address to ZenLedger For Your Crypto Tax Forms
- To import your Algorand transactions into ZenLedger for your crypto tax forms, all we need is your public address.
- Select the proper blockchain or wallet from the dropdown list.
- Paste your address into the address field in ZenLedger.
- Select if the wallet is based in the USA or not.
- Then hit ADD COIN button
Since we have covered what is Algorand, let’s get to how does Algorand works.
How Does Algorand Work?
As we are aware that Algorand uses its distinctive “pure-proof-of-stake” protocol instead of resource-intensive proof-of-work protocol, new blocks are generated a lot faster and transactions are confirmed quicker as well. Whoever holds Algorand cryptocurrency, ALGO, are randomly selected to validate and approve the transactions so that new blocks are added to the Algorand blockchain.
As per the network’s developers, this process makes the blockchain decentralized, global, and secure. In the same vein, the more Algo a user holds, the more likely they are to be selected to verify transactions. It also enables the Algorand blockchain to approve and process transactions in mere seconds unlike minutes with Bitcoin.
What is Algorand Trying to Achieve?
Algorand has set a bunch of goals for itself which heavily relies on the successful implementation of its technologies and concepts. One of those goals is to build a blockchain that offers a borderless economy. Algorand’s scalable, secure, and decentralized distributed ledger is looked at as a bridge that can connect organizations to untapped markets. Predicated on its one-of-a-kind consensus algorithm, the Algorand blockchain delivers immediate transaction finality devoid of forking or uncertainty. This also means that once a block is created and added to the chain, it remains there indefinitely and cannot be changed or deleted.
Anyone can join the Algorand open-door platform without any approval from a gatekeeping authority. Using its open-source software, a wide range of users including individual investors, small business owners, and large organizations have access to its permissionless blockchain. The only requirement for joining the Algorand network is moderately powerful computing resources. Contrary to permissioned blockchain where a user’s innovation potential is hampered, Algorand users can freely offer new market applications on the grounds of ownership records publicly available on the blockchain. This takes scalability to a whole new level and helps create new markets.
What is Algorand Used For?
Algorand blockchain’s public version is primarily designed for developers to build new applications fueled by cryptocurrency. Currently, the platform is used in copyright, microfinance, real estate, and more. On top of these additional features, Algorand’s cryptocurrency, ALGO, is used to protect the consensus used in building each block. At the moment, the token is used to pay for every transaction but soon, ALGO will be responsible for the growth of the Algorand ecosystem. For those who are in favor of voting as part of governing, ALGO tokens will be provided as a reward. This extraordinary nature of ALFO allows it to become the key pillar of the Algorand network, and at the same time, a secure and efficient way of buying something as simple as a cup of coffee.
Apart from this, Algorand developers are all set to host smart contracts on the platform that is capable of managing the exchange of digital property. An example of this is ANote Music, which will allow many publishers and investors to buy and sell royalties and rights on the Algorand network. Moreover, Republic, an investment platform, used the Algorand blockchain to distribute dividends to investors.
How to Buy Algo Cryptocurrency?
Owing to Algorand’s technical specifics, it is most likely to become the platform of choice for developers to launch new decentralized applications or dApps. Similarly, investors are seeing ALGO as a viable part of their cryptocurrency portfolio as the proof-of-stake protocol is making the cost of participating in a blockchain’s operations quite cost-effective. All this indicates that ALGO can become a leading cryptocurrency in the future. So, if you wish to buy ALGO then here’s how you do it:
- Choose a cryptocurrency exchange or trading platform of your choice such as Binance, Coinbase, SoFi, Kraken, or others.
- A few trading platforms ensure safe storage of cryptocurrencies while a few cryptocurrencies may require you to download a hot or cold wallet to store your tokens. In this case, ensure that you have the required wallet.
- Deposit sufficient funds in your selected crypto exchange or trading platform to buy ALGO
- Purchase the required amount of coins.
Even though Algorand is a relative newcomer in the blockchain landscape, it has proven its mettle as a powerful platform with excellent tech innovation, real-world use cases, and developer support. Its consensus mechanism and equitable coin rewards structure are pioneering a new standard in the blockchain space.