Algorand is a decentralised, open source blockchain that runs on a two-tier platform with a unique proof of stake mechanism. This platform helps increase speed and finality of transactions. Rolled out in 2019, Algorand proposes to achieve these functionalities by deviating from the norm – the way cryptocurrencies are traditionally meant to function.
The Basics Of ALGO
Its native cryptocurrency, ALGO, was created by Silvio Micali, a computer scientist and professor at MIT. It was built to establish an open economy in which everyone can take part. Algo performs similar tasks as paper money, but because it is essentially a digital currency, it can achieve these functions without the limitations of paper currencies.
ALGO can be used to purchase and sell services and goods, both retail and e-commerce, but unlike paper currencies, the transaction is instant. Once it leaves the buyer’s wallet, it reached the seller’s immediately at nearly zero cost. It can also be used to wire funds to others, instantly.
There are no delays, forms, or banks exchange. Each ALGO transaction is recorded on the parent blockchain, which makes it easy to verify past activities. The ALGO also benefits significantly from the unique aspects of the Algorand blockchain such as speed. Transactions can happen in under 4.5 seconds.
The Algorand blockchain
The Algorand blockchain also offers scale as it is built to be used by billions of people. It is also trustworthy; it was designed in a way to prevents forking – splitting into more than a single chain.
At the launch of ALGO cryptocurrency, more than 10 billion units were made, which is the immutable and fixed maximum supply. As of last year, about 16 percent of the supply has been released into the market through inaugural action of 2019, and also through community reward.
Unlike paper money, the ALGO allows users to manage all their money through a digital wallet. Digital wallets offer enhanced security and easy reach of money whenever necessary. There are various kinds of wallets that can be use used with ALGO. Some are designed to be used on the phone, a desktop or hardware wallets that let users store their cryptocurrencies securely offline.
ALGO’s Protocol Structure
The parent platform Algorand offers a unique blockchain architecture configured in two tiers. There is a base layer that supports creation of assets, atomic exchanges and smart contracts between different assets. These processes happen on a single layer of the ALGO blockchain, ensuring security and compatibility.
On the layer 1 of the Algorand blockchain, users are able to generate ASAs that represent new or current tokens. This is almost how ERC-20s work on an Ethereum blockchain.
The other layer is meant for dApp and sophisticated smart contract development. This kind of bifurcation is the reason ALGO transactions take place very fast.
The Future of ALGO
Analysts believe that the price of the ALGO may rise and even surpass its initial highs. Short term sentiments indicate ALGO is somewhat bullish. If this trend continues, ALGO might reach the $10 mark by close of 2022. The start of 2022 might see some fast growth, possibly $15.
The unit price might go even higher, possibly reaching the $25 mark. However, this is only possible if the market remains bullish and the cryptocurrency gets beyond psychological resistance.