The recent increase in the Decentralized finance (DeFi) protocols, dApps, and Non-fungible tokens (NFT) platforms are creating huge traffic on the Ethereum network which is hosting more than 80 percent of similar apps and platforms.
The consequence of this has led to the arousal of problems like security risks, huge gas fees, and reduced scalability. These are proving to be a hindrance to the growth of decentralized applications especially during the wake of forthcoming Web3 developments.
As larger industries foray into the market and side with tokenization and begin their operations in the DeFi world, the necessity for increased scalability, secured and sole decentralized protocol will arise.
One such Blockchain technology that has a huge potential is Algorand which is a proof-of-stake (PoS) technology.
Further details of Algorand are below:
Introduction to Algorand
Algorand is a pure proof-of-stake Blockchain that does not require permission and aids in ensuring full participation, security, speed inside its decentralized network.
This proof-of-stake (PoS) system operating in the Algorand network chooses committees amidst the participating holders in a random manner, and after validation approves the upcoming block in the chain.
Silvio Micali, a Computer Science Professor at MIT (Massachusetts Institute of Technology) and awarded the Turing award in 2012 founded Algorand. He developed the VRF (Verifiable Random Function) which is a unique cryptographic tool to achieve this randomization.
What is VRF?
The Verifiable Random Function chooses accounts in a pseudo-random way and the voting power of the accounts depends on their online stakes. Every message is signed cryptographically and VRF authenticates it.
Algorand’s primary objective is to eliminate the three technical hurdles that decrease the chances of Blockchain adoption including scaling, security, and Decentralized network. It provides the framework for a variety of apps like Crypto networks, dApps, and Crypto tokens.
Important features of this network are:
Enhanced speed in transactions and efficiency.
Zero carbon PoS agreement protocol.
Advanced smart contract potential.
The number of transactions currently processed by Algorand is 1300 per second and is targetting to reach 3000 transactions per second in the future.
Fundamentals of ALGO coin
Algorand Blockchain’s native cryptocurrency is ALGO. The total circulating supply of these ALGO tokens is 10 billion and out of these, 65% are being circulated at present.
It can be utilized similar to a fiat currency and can also be used as micropayments and a mode of payment with other additional features.
ALGO is on the list of the top 25 cryptocurrencies.
Short term analysis of ALGO
After a powerful pick-up in June 2021 from 0.67$ to 2.99$, ALGO experienced remarkable consolidations and alterations. ALGO is currently placed at a preceding daily level of 1.24$. Falling from this level will result in ALGO heading to .786 retracement maintenance at $1.17. Still, it needs to switch the $1.46 resistance to showcase sustainability and momentum.
Future of Algorand
2021 turned out to be a great year for Algorand. It forayed into a whopping $2.5 billion partnership with Hivemind Capital to provide network and technological framework to the fund.
Algofi – DApp launched by Algorand serves the ecosystem’s two major functions – Tinyman and Algomint. Tinyman is a DEX based on Algorand and Algomint is a digital assets minter. One of the major competitors of Ethereum is Algorand due to its core functions.
