Various leaps have been made moving forward with blockchain technology, it is not a new concept or something that is in development but has passed the rudimentary review period, and it is now a fully functional and adaptable concept out there. You might not consider cryptocurrency or blockchain technology as something that has real-life use cases, but given the present evidence, there are far too many.
On the contrary, you have to admit that there is some potential there and a clear pathway for changing our world of finance for good. Multiple blockchain systems have been introduced since the dawn of decentralization that began with Bitcoin debuting in 2009.
These blockchain systems use the same consensus algorithm for the sake of validating transactions and interacting with various nodes that interlink with each other forming a complete infrastructure to not only validate transactions but lend processing power to the whole network. These blockchain technologies might be used for minting new tokens, scaling your business environment, staking your crypto for the sake of earning a wholesome profit, or even using the present infrastructure for that very blockchain system to launch your own token with either ICO or IPO or whatever suits you best.
Algorand is a new blockchain technology that was founded back in 2017. It brings forward a whole other concept of decentralization that was not known to the crypto market until its launch. However, the mainnet of this blockchain, along with the ALGO token, was launched further along in 2019.
The role of this blockchain is not to present itself as a payment method that people can interact with for the sake of conducting transactions but as a suitable solution adhered to the scalability-related problems that various other blockchain systems out there are having. Algorand is able to not only scale the present blockchain solutions out there but at the same time correct the errors that emerge within their consensus algorithms.
If you have got the ALGO token, then you are welcome to stake your token into an already thriving pool of various other people doing the same. If you get the green light, then you will be able to verify transactions and validate new blocks within the Algorand blockchain environment. The thing with validators is that the situation has not been deemed open for everyone so that anyone with an Internet connection and the will to validate transactions could take part in doing so.
There is a strict committee that makes sure that only authentic and significant individuals are selected for the task. To make sure that the final blockchain for the Algorand remains unaltered, not prone to manipulation, and interoperable.
If an error occurs within the validation of a particular block or a block is presumed bad, then a completely new user will be assigned as a validator to that particular block to avoid any and all discrepancies. The decentralization of power is a concept on which this blockchain environment rests and finds its roots. Here every user within the Algorand environment has an equal amount of chance to become a validator.
However, this transition doesn’t apply to the consensus. Because the Algorand environment is used for network-based transaction fees and earning of blockchain-based rewards. If you care to buy the native token of the Algorand platform, then you can do so on any particular blockchain out there while getting the most incredible present rates when it comes to conversion.
A Brief Introduction to Algorand
As stated above, Algorand is nothing but a blockchain network that was founded back in 2017 by a computer scientist from MIT. The mainnet for Algorand got launched in 2019 along with the basic or native cryptocurrency that people can buy, stake or trade actively from any crypto exchange out there.
The very purpose of Algorand is to improve the scalability issues of other blockchain systems out there while at the same time supporting smart contracts and their execution in real-time. Algorand is a public network that is completely decentralized and works on the ethics of pure proof of stake blockchain consensus with kindle support from customized layer one blockchains.
These blockchain systems could be used to create customized blockchain solutions that are enabled to serve specific purposes or instances of enterprises or other users out there. The technology of this blockchain entity is extremely useful for financial services, enterprises that are involved in financial aspects that belong to orchestrate in a decentralized manner along with the creation, maintenance as well as execution of smart contracts.
Foundation of Algorand
The very foundation for Algorand is a completely nonprofit organization that got launched in 2019, and it is in charge of not only funding but developing the Algorand network. Many attributes of this foundation are also closely tied with developing the community for Algorand, its research, and making sure that the governance-related issues are tackled primarily and with prominent due diligence.
The foundation has played a great role not only in the education of developers who are actively working to develop and maintain the network of Algorand along in making them eligible to work on various independent projects that are going to accelerate the development of Algorand along with its use case in the financial world.
Working of Algorand
The pure difference that Algorand carries from various other blockchain systems out there is the consensus algorithm that it uses for the sake of conducting or validating transactions and subjecting them to particular blocks. The name of this consensus mechanism is pure proof of stake consensus. This protocol allows the main network to be able to validate multiple transactions in a quick manner without having to split the decentralized economy any further than it is already being stretched.
When talking about the competition that is the proof of stake consensus algorithm is only helpful in validating a small number of transactions because it just can’t bear the load of thousands or millions of transactions being plummeted down the throat of the network without having the necessary resources to execute each and every one of them. That is why proof of state blockchain systems are going to choose the small number of validators for the task who have the largest stake within the pool so that most of the validation work would go to them, and the rest of the validators would just be left to scrape off any menial transaction that is thrown their way.
This is by any chance not an ideal solution to the blockchain systems at all, which is why the pure proof of stake provides a solution that is based on quality and merit rather than giving the huge chunk of transaction validation to the highest available stake within the midst of many other validators having done the same.
The pure proof of work consensus algorithm that Algorand uses allows for the choosing of validators and miners who randomly formed the pool, which means that anyone who has initially staked their token into the mining pool could get selected for the sake of validating transactions and adding them to their dedicated blocks but for the sake of person to get picked as a validator a participation key is required, and it is generated when they stake a certain amount of crypto token into the dedicated blockchain environment.
The chances of being chosen randomly are proportionated with the overall stake that the participant has subjected into the mining pool; the more, the better. It statically confirms that a holder that has only a small claim or stake within the mining poll would have an incredibly smaller chance of getting picked rather than when it comes to its giant holder who has kept quite a fair amount of token into the pool. There would be no minimum stake if you were thinking about that as a set of the requirements that, when fulfilled, will allow you to get picked by the algorithm.
The algorithm doesn’t care for how many tokens you have subjected into the pool; if it is your turn and the whole thing just comes together at the very last minute, then surely you will get it; it doesn’t mean that you have to invest a huge amount of money before into the blockchain environment of Algorand. There are no validators who are permanently chosen or have the authority to just continue validating transactions because it doesn’t work that way.
Every participant that has taken part in the mining pool would get the chance by the algorithm, and then a certain number of transactions would be assigned to them, which they have to validate in a given time frame. This takes away the monopoly or any chance of it forming or coming before the developers in the future because when only a handful of validators are present, and they are given the upper hand in contrast to many other participants within the pools, it could lead to ultimate chaos. Algorand keeps the whole thing running efficiently and properly by making the whole system of choosing a validator for validating transactions completely and utterly decentralized.
To give you a clearcut idea of just how the whole thing falls into place, you would have to assume a situation where a new pool is being generated. Now within the pool, multiple users are staking their crypto and, in return, are getting a participation key; as soon as they get the key, they would ultimately become the participation nodes. The communication that takes place between the nodes happens through secure Algorand nodes.
The next thing that is done by the blockchain is to understand and explore the present amount that each and every user has staked into the mining pool. Once it is done, a new algorithm completely randomly is going to choose the validators, which is not entirely based on just how much crypto they have staked into the pool. Once the validators get selected, their identity is wiped clean from the blockchain environment that can be approached by the public and is kept an utter secret.
This ultimately helps in securing the Algorand blockchain and keeping a tight check over the malicious activity that bad actors are known to perform. Multiple proposals are being filtered as the process continues, and only the best validators who either have a history of validating transactions in the past with those who just happen to click with the initial screening profile of the system are chosen and made validating nodes. This is just how the whole system works, neutral, elegant, transparent, and completely interoperable.
Algorand is surely going to help the blockchain systems in the present to come around the restrictions that they have at the moment while addressing their needs forward into a digitally powered future. With all of that being said, one shouldn’t miss out on the potential use cases of the ALGO token for the Algorand blockchain, as it has real-world value while providing you with a handsome return on your investment. It doesn’t matter if you have staked your position now or for an unlimited amount of time; if you have delegated your crypto in a secure wallet, you will continue to get certain rewards and a handsome return on your investment. More information is present below;
Potential Use Cases of ALGO Token
The ALGO token is just like any other crypto token out there belonging to a dedicated blockchain environment; therefore, it has some incredible use cases. Just like holding Bitcoin, Ether, or XRP, you can hold on to the ALGO, stake it, or get around trading the token at a later stage when the prices are right or have leaned in your favour.
You can use the native token of Algorand for the sake of paying transaction fees that are validated over the same network. The Algorand network enjoys minimal fees when it comes to validating transactions as compared with Ether or XRP, for that matter. That is why if you’re interested in saving some money in terms of the transaction, then the best avenue would be to get all your assets over the network and then make it to whatever blockchain system or crypto exchange of your choosing. This token will also provide you with a chance to be able to stake your token into a definitive mining pool and get the opportunity to be selected as a validator for the Algorand network.
This way, you would be tasked with validating transactions and subjecting them to their definitive blocks while at the same time getting some sort of compensation or reward in return. You can place your token into a non-custodial wallet if you don’t have the imminent need to use it in the future and, while doing so, get a chance to earn handsome rewards with each and every block that gets added to the blockchain in a successful manner.
If you don’t want to mess around with mining or validating transactions and neither do you wish to use Algorand for the obvious purpose of saving transaction fees, then you would find that placing your crypto in a non-custodial wallet is the best use you can draw from this situation. It is as if you are investing your asset into a savings account that is going to continue to generate loads of money for you while your original amount remains intact and perfectly available.
You won’t have to deal with a decentralized app or any such interface for the sake of availing of this feature. You can do so while signing up with the Algorand network and selecting the type of transaction you want to commence into using the network.
There you can manually add the number of tokens that you are comfortable staking at the moment and, at the same time, dictate the period for which you would be locking up your assets to start some earning. Smart contracts can make the whole game pretty easy for you by automating the whole assembly; you don’t even have to manually add tokens under the chain or whatever interface that you were earlier instructed to do, as smart contracts would automate the whole process and take care of everything from start to finish.
There are multiple projects that are advertised by Algorand from time to time; some of them are new while some of them are recent or essentially, people are working on them, which will provide them with the required information for the sake of getting any sort of exposure to the project. This way, you will have all the nice aspects of using the native token of Algorand while having a clear-cut idea about what specific entries or elements you need to choose for the sake of making the best of this situation. It might be a bit early to jump onto the Algorand wagon, but it is surely not late, and if you were planning on becoming an active member of a blockchain entity that has a lot of scopes when it comes to growth and becoming a clear cut standard in the near future then your search should end with Algorand.