What is Algorand
Algorand is a high performance blockchain based on next generation technology that implements a Proof of Stake protocol as well as pseudorandom functions. The project has been called by many as “Blockchain 3.0”, as it is able to solve the well-known problem of scalability found in Bitcoin, while maintaining decentralization and security.
Founded by MIT professor Silvio Micali, Algorand stands out from other high performance blockchains because of the credibility of its founder. The performance, security and openness of the decentralized network are the best features of Algorand’s consensus mechanism. Algorand transaction throughput competes with traditional financial and payment systems.
The Algorand consensus algorithm is called “Pure PoS”, with network security tied to the honesty of the majority. Compared to other Proof-of-Stake protocols, this has no sanction mechanism or slashing should bad actors misbehave. Instead of bad actors being punished, Algorand chooses to make it impossible for cheating by a minority to affect the safety of the majority. So long as 2/3 of the users are honest, the protocol will continue to work just fine.
Blocks are constructed in 2 phases in Algorand. Blocks pass through lotteries known as “cryptographic sortition” which enables quick finality. The days of waiting for 30+ confirmations and more hours to ensure the completion of transactions will be gone.
- Proposal phase: In this phase, a token is selected at random and the next block is proposed by owners. However, it is only at the propagation stage that the proposer becomes known to the entire network. At this point, it is too late to interfere.
- Voting round: A committee made up of owners of 1000 random tokens is selected to approve the block that the first user proposed. This differs from the fixed committee system found in most Proof-of-Work or Proof-of-Stake blockchains in that the random selection of members of the committee make the protocol highly secure against attacks because they simply won’t know who to target.
The ALGO Token
On June 2019, Algorand held a Dutch Auction ICO where over $60 million was raised, and 25 million tokens were sold at $2.40 each. This ICO happened at the same time as the launch of the Algorand mainnet.
However, Algorand says they are just beginning and will auction off 600 million tokens yearly through the same Dutch Auction system. 10 billion ALGO will be the total token supply.
Unfortunately for those who took part in the ICO, the summer of 2019 has not been great. ALGO’s price as of September 1, 2019 was $0.393337, which puts the token at number 47 with a market capitalization of $113 million.
Silvio Micali, a professor at MIT and recipient of several prestigious awards, founded Algorand and has put together a team of business and academic experts. Algorand is unique: it is not like other projects, consisting mostly of entrepreneurs at the helm. Instead, it is composed of researchers and scientists and due to connections with MIT, most of the team are based in Boston.
Here is a brief bio of members of the team:
Silvio Micali: Founder of Algorand, MIT professor who is an expert in cryptography, secure protocols and pseudo-random generation as well as overseas research and security with Algorand. He co-invented several protocols, including Zero-Knowledge Proofs, Verified Random Functions and Probabilistic Encryption.
Steve Kokinos: Steve is the CEO of Algorand and former CEO at Fuze — an enterprise communication platform — and brings a wealth of business and entrepreneurial experience to Algorand.
W. Sean Ford: He is the COO of Algorand, has been CMO at LogMeIn and has several years of business experience.
Keli Callaghan: Keli heads the Marketing department at Algorand. She comes to the company with many years of experience in marketing and customer support. She has worked in this role at Avid, where she chaired collaborative marketing efforts with Microsoft.
Sergey Gorbunov: Sergey is Algorand’s Head of Cryptography. He is a prize-winning researcher and Assistant Professor at the University of Waterloo with particular interests in cryptography and to some extent in blockchain protocols, computer networks and secure large scale systems.
There are other people who are currently working on Algorand, although the number is not large.
As well as the Algorand team, the Algorand Foundation is the governance and research organization behind the development of the Algorand platform.
Buying & Storing ALGO
The greatest volume of ALGO trading is found on Hotbit. It is also listed on Binance, Huobi, OkEX, CoinEX, Coinbase Pro, MXC, Bit-Z, BitMax and Bilaxy.
A healthy, well distributed volume is available across these exchanges, reducing the reliance on one particular exchange. Each of the exchange also has strong order books.
To store ALGO, Algorand provides a mobile wallet which is available for Android and iOS devices. Another wallet Coinomi supports ALGO tokens and can be used as a desktop wallet.
At the moment, many leading crytocurrencies back Algorand, including AlgoCapital, USV, Pillar, Applied Crypto Ventures,Lvna Capital, Continue Capital, 11°11 Ventures, Braindchild, Foundation Capital, Hex Capital and many more. In October 2018, the company secured over $66 million in equity funding.
EOS is a blockchain-based protocol that aims to build a decentralized blockchain capable of processing free and fast transactions while eliminating transaction fees. It also allows for the building of smart contracts which will enable developers to release dApps.
Nano is a low-latency payment platform that uses the smallest of resources in providing individuals with their own blockchain. These users provide the computational power needed to verify transactions, allowing processing of transactions without fees.
Ethereum Casper Protocol:
Casper is the Ethereum hard fork that seeks to convert Ethereum into a Proof-of-Stake blockchain and drive mass adoption. The aim of Casper is to provide enhanced scalability and combat centralization risks as well as end energy-inefficient mining.
Unique / Key Features Against Its Competitors:
- Algorand uses a Byzantine Consensus-based protocol.
- Transactions on Algorand transactions are confirmed in less than 5 seconds, and transferred money is available immediately.
- Algorand is fully decentralized. A consensus is needed for every decision and this is also subject to the will of the majority. All transactions are treated equally, no matter the size.
- Algorand selects a node randomly by its stake to create a new block. Individuals that are randomly selected then vote on the new block. This method is fast, secure, trustless, highly scalable and without miners.
- Token distribution is by a unique approach of Dutch Auctions.