Introduction

Algorand (ALGO) is a green public blockchain that aims to address the scalability problem of blockchain systems without compromising their security. Algorand is using pure Proof of Stake (PoS) consensus mechanism and claims to be the first blockchain to have “immediate transaction finality.

Algorand was built with the environmental effects of blockchain systems and cryptocurrencies in mind. By partnering with ClimateTrade, a platform that offers funds to carbon-offsetting projects around the globe, Algorand tries to compensate for its carbon footprint.

The Algorand ecosystem consists of crypto and blockchain applications in various fields such as Decentralized Finance (DeFi), Non-fungible Tokens (NFTs), blockchain oracles, and blockchain bridges to name a few.

ALGO is the official cryptocurrency of the Algorand blockchain and is used by users and developers to pay transaction fees on the network.

In this article, you will learn about the foundation of the Algorand blockchain, its fundamentals and details, and how the ALGO token is used within the ecosystem.

What is Algorand (ALGO)?

Algorand (ALGO) is a Proof of Stake (PoS) blockchain that is primarily focused on addressing the main issue of blockchain systems – scalability. Algorand claims to be the first blockchain that offers “immediate transaction finality” to its users.

Algorand is using a Byzantine Agreement (BA) protocol which allows it to provide high security on the consensus level. Users will be eligible for minting new blocks and getting rewards based on the amount of staked tokens.

Algorand community members can also propose their changes which will be then voted upon. The Algorand consensus algorithm is built in a way that allows users to reach an agreement on any matter, either a suggested change or a new proposed block of transactions.

Algorand also supports the development of smart contracts and developers can develop their decentralized applications on the Algorand blockchain. AlgoKit is the development kit provided by the Algorand Foundation which allows developers to set up their development environment and start coding in less than 10 minutes.

Since its creation, Algorand has tried to offset its carbon footprint to stay a green and environmentally friendly blockchain. The blockchain has partnered with ClimateTrade, a platform that offers funds to carbon-offsetting projects, to offset its relatively small carbon footprint.

Who created Algorand (ALGO)?

Silvio Micali, an MIT professor and a member of its Electrical Engineering and Computer Science Department, founded Algorand in 2017. Micali is a reputable member of the cryptography and computer science field and had achieved multiple awards including the Turing Award of the Gödel Prize and the RSA prize.

Launched in 2019, the Algorand Foundation is responsible for the development and growth of the Algorand ecosystem. The Algorand Foundation has launched the Algorand Centres of Excellence (ACE) programme and the Algorand Blockchain Club for Students (ABCs) to help university students and blockchain and crypto enthusiasts with their educations and research in the field.

How does the Algorand Blockchain work?

The Algorand blockchain offers a few innovative features:

Cryptographic Sortition: on each round of the block selection, the user will be selected from a new group of users in a secret and private manner. No one knows who the selected user for block production is until the block is broadcasted to the network. This feature protects the users from attackers and malicious actors.
Network Architecture: Algorand has two types of blockchain nodes to ensure high throughput and decentralization. Relay Nodes are used for fast communications while Participation Nodes are responsible for proposing new blocks and confirming the new ones.
Immediate Transaction Finality: once a block is proposed and confirmed on Algorand, the transactions within the block are considered final. This is due to the fact that, unlike Proof of Work (PoW) blockchains, there is no chance of two valid blocks being proposed at the same time.
Vault: Fast Bootstrapping for the Algorand Cryptocurrency: as a blockchain compression technology, Vault helps Algorand with its storage cost by decreasing the cost through transaction expiration or distributing the cost across the network through sharding while the security of the system stays untacked. It also helps the new nodes to join the network in a fast and easy manner by not inquiring them to check all the existing blocks on the chain..

What is the key utility of ALGO?

ALGO is the official cryptocurrency of the Algorand blockchain. Users and applications use the ALGO token to pay transaction fees on the network. ALGO is mainly used for:

Paying transaction fees on the network
Buying NFTs and other blockchain-based items
Helping with the network governance

ALGO has a token supply of 10 billion which will be distributed to the community, node operators, network participants, and Algorand Foundation over time. Algorand also publishes reports on the vesting process of the token to stay transparent with its community.

You can check out the latest Algorand Transparency Report here.

Where to buy ALGO?

In addition to offering Algorand (ALGO) for trading on various cryptocurrency exchanges, including DIFX, they also provide a comprehensive guide on how to buy ALGO for interested users. On DIFX, ALGO is available as an ALGO/USDT pair, enabling users to conveniently trade the cryptocurrency.