What Is Algorand (ALGO)?
A Beginner’s Guide
Algorand is one of a number of newer projects seeking to expand the possible use cases for cryptocurrency by accelerating transaction speeds and reducing the time it takes transactions to be deemed final on its network.
Officially launching in 2019, Algorand seeks to achieve these attributes through decisions that deviate from how cryptocurrencies have traditionally been designed.
Most notable is that Algorand distributes the ALGO cryptocurrency it introduces into its economy with each new block to everyone who holds a certain amount of the currency in its wallets.
Algorand further enables users to create smart contracts (programmatic agreements for building decentralized applications) and tokens that can represent both new and existing assets.
Such features were successful in attracting a diversity of venture investors to early private sales of ALGO conducted to fund the development of the platform.
Who created ALGO?
Created by computer scientist and Massachusetts Institute of Technology (MIT) professor Silvio Micali, Algorand is perhaps rare in that it was started by an established academic who already had a distinguished career at the time of its launch.
Micali, for example, is the recipient of a 2012 Turing Award, a notable accoldate in the world of computer science, for his work with his collegue Shafi Goldwasser.
According to the Association for Computing Machinery, which awards the honor annually, Micali is credited with helping make cryptography a more “precise science” through work that formalized basic notions about some of the essential building blocks of the field.
Micali would go on to author the Algorand white paper with Stony Brook University professor Jing Chen in 2017. This foundational work has been developed by other academics and cryptographers in white papers available on the project’s official website.
This work is funded by the Algorand Foundation, a Singapore-based corporation founded to advance the technology and which received an allocation of ALGO tokens for its efforts.
Why does Algorand have value?
Algorand is a new public blockchain, meaning its technology, while novel, has not yet seen much testing under real-world market conditions.
Users may find the ALGO cryptocurrency valuable should they believe Algrorand’s technical specifics will make it likely to be the blockchain of choice for developers who want to design and launch new kinds of decentralized applications.
Investors may also see Algorand as a viable part of a cryptocurrency portfolio should they believe that proof-of-stake blockchains, which lower the cost of participating in a blockchain’s operation, will ultimately prove more successful in the market.
The Algorand Foundation, the non-profit organization overseeing and funding development of the protocol, says that only 10 billion units of its ALGO cryptocurrency will ever be created.
Algorand maintains a block explorer, which keeps an official count of its circulating supply.
A schedule of distributions, which the foundation expects to be completed within five years of the protocol’s launch, can be found below:
Overall Token Distribution:
Estimated algos to be injected into circulation (initially via auction) over the first 5 years
Estimated participation rewards (distributed over time)
Relay node runners (distributed over time)
Algorand Foundation & Algorand, Inc.
End user grants (distributed over time)
The Algorand Foundation has also published additional details about how payouts work and the time in which users can expect to receive new funds for their participation in the blockchain.
What is Algorand used for?
The public version of the Algorand blockchain is primarily designed to enable other developers to create new kinds of applications fuelled by cryptocurrency.
The platform has been used in real estate, copyright, microfinance and more. A more detailed summary of use cases can be found on the Algorand Foundation’s official website.
The code for Algorand is open-source and can be cloned, copied or otherwise used in private or permissioned blockchains.
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Now you're ready to take the next step and buy some ALGO!