Algorand update: ALGO Live price, price chart, news and markets

Algorand is a new public blockchain that has not yet undergone extensive testing in real-world market conditions. Its technology is innovative and unique.

What Is Algorand?

Algorand is an open-source decentralized blockchain network that employs a two-tiered structure and a distinctive form of the Proof-of-Stake (PoS) consensus mechanism. This design allows for faster transaction speeds and achieves finality. Unlike other blockchains, Algorand distributes block rewards to all ALGO coin holders, offering an opportunity for all ALGO holders to earn rewards instead of just block producers.

How Does It Work?

Algorand stands out from other blockchains due to its use of PPoS, a consensus algorithm that incorporates a Byzantine agreement protocol. This unique feature ensures that if a node is compromised, the staked native token ALGO owned by participants in the network is automatically safeguarded through the use of unique keys.

Bitcoin's consensus mechanism, proof-of-work (PoW), requires a significant amount of energy and computing power for creating and validating new blocks. PPoS, on the other hand, enables the creation and validation of new blocks in a faster and more efficient manner. This is achieved by randomly selecting ALGO holders to validate and approve each block in the chain, with a new committee being selected for each new block.

Through the PPoS protocol, only users with substantial holdings of ALGO have the potential to engage in malicious activities that may compromise the security of other users. However, since the system relies on codependency among participants, engaging in malicious activity would also negatively impact the ALGO holdings of the majority. Therefore, such malicious activity would not be rewarding for any majority holder.

Algorand can process up to 1,000 transactions per second, and all transactions are final and instantaneous. The network also features a fixed supply of 10 billion tokens, which adds an inflation-resistant mechanism to the network. However, a majority of these tokens are currently locked up and have not yet been distributed.

Outstanding Features

The Algorand protocol aims to address three significant challenges faced by most blockchains: security, scalability, and decentralization. Termed as the "blockchain trilemma," Algorand claims to provide solutions to these problems.

Security

The Algorand protocol ensures security against malicious attacks, making it suitable for transactions, holding high-value assets, and building secure enterprise applications. It maintains security on both the network and consensus protocol levels, offering protection for individual users' accounts.

Scalability

The Algorand protocol has the capacity to handle a high number of transactions per second, making it a more scalable solution compared to Bitcoin or Ethereum. Unlike Bitcoin, Algorand's consensus protocol eliminates the need for computational power to solve cryptographic problems. The protocol's computation cost per user is primarily used for generating and verifying signatures, as well as counting operations. According to Algorand, the network can scale to millions of users and sustain a high transaction rate without imposing significant costs on participating users.

Decentralization

Algorand is a fully decentralized network without a central authority or a single point of control. Transactions are verified by participating nodes, and each node has an equal say in decision-making. This decentralized approach makes Algorand a highly decentralized system. Every network participant has the opportunity to be a part of the committee that approves each block, as the selection process is random and confidential. The committee's composition is not fixed, and its nodes are operated by individuals from various locations around the world.

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