A Complete Guide on Algorand: Can it Drive Crypto Adoption Faster?
In the past week, Algorand prices have been plummeting, leading to severe losses to Algo holders. Unfortunately, this episode is part of a series of price plummets that have struck them. In just the first three months of its inception, Algo price fell from $3.28 to $0.37 (at the time of writing), taking a hit of a 88% price reduction.
Why did Algo’s price plummet? Many crypto enthusiasts made speculations on the reasons for this drop and what is happening in Algorand. One potential reason is there are too many tokens in circulation. In just the first three months since its introduction in the market, Algorand sold over 25 million tokens. The long term plan is having 10 billion Algo tokens in circulation.
When using the launch price of $2.4, Algo’s valuation goes even higher than ether at launch time. The high valuation and the 10 billion tokens are far too much for the retail market to absorb fully. This article looks at the benefits of the Algorand blockchain and why it’s expected to drive crypto adoption.
Algorand technology is a trusted platform with a proof of stake consensus mechanism which offers high speed, security, and full participation in a decentralized network. Algorand’s blockchain has a highspeed throughput with transaction speed exceeding 1000 transactions per second.
Its latest technology, Algorand 2.0, is a protocol upgrade that expands the range of Dapps and other processes hosted by the Algorand platform. Here are some of the enhancements in Algorand 2.0:
- Standard Assets– ASA are blockchain assets that have customizable options directly in the layer
- Atomic Transfers– These are very secure transfers with immediate transaction settlements even for multiparty transactions in the layer
- Smart Contracts in Layer 1– ASC1 are stateless smart contracts with numerous possibilities for governed operations.
5 Features of The Algorand Platform
Algorand is wholly decentralized, which means there is no single authority controlling access to all transactions. There’s a unique committee of users who are randomly selected to validate every block. This random selection of users ensures full decentralization, transparency and security, and accuracy of every transaction.
The platform is public and open to all; therefore, anyone can easily use it. This platform has no class differentiation; thus, any user can read any blockchain block and get the opportunity to write a transaction in future blocks.
There is low participation cost since the platform requires little processing power and the right resources to join. All online users who have Alog tokens are eligible to participate in block consensus.
Algorand Pure Proof of Stake
Algorand Cryptographic Self-Selection Sortition
There is no specific group of people charged with proposing blockchains in Algorand. Instead, all users are continuously self-selected to participate in the protocols. In every new block, preparation is done for a new set of users to participate in the next block selection.
In Algorand, the power is in the hands of the users holding a stake. Every user receives some rewards proportional to their stake for every block that is committed to the chain. These rewards encourage users to join the platform and accelerate the path to decentralization.
The Byzantine agreement protocol in Algorand is highly efficient. It reaches a consensus on a new block as fast as a block gets propagated in the network. It can sell to billions of users at a high transaction rate but still maintain low costs to participating users.
Algorand Use Cases
Pocket Network is a decentralized infrastructure platform that focuses on developing P2P applications supported in the network. Algorand using its algorandSDK will be the first blockchain to tap into the Pocket’s API protocol. This protocol connects developers to a decentralized network of operators, thus lowering the barrier to blockchain application developments.
Algorand is also in collaboration with Circle stable coin. The stable coin has a fiat backing with the USD coin being its main fiat enabled coins. Therefore, customers will quickly move funds between traditional banks and the digital world on the Algorand blockchain.
World Chess has chosen Algorand for all official chess ratings. The company is in talks with them to develop new gaming opportunities for chess players worldwide.
Algorand has seen severe losses since its inception in 2019. However, investors will see its worth in the long run given time. The highly secure blockchain, which has introduced high technologies, can be a future driver to Algorand’s growth.
The self-selection feature will guarantee users the safety and security of their transactions, thus making more people want to invest with them. The plummeting prices, however, if not dealt with as soon as possible, will scare investors away.
The management team is committed to structuring protocols to ensure the investor’s safety, liquidity, and growth soon. The last word remains that the Algorand blockchain will drive faster adoption of cryptocurrency globally, because of its uniqueness.