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Algorand — here’s why crypto lovers are so bullish on this ‘Ethereum Killer’

Cryptographic project behind
ALGO token May not be well known Bitcoin, Ethereum, Cardano also Solana — At least in the Indian crypto ecosystem — but it’s one of many notable projects today. At the time of writing Argo Tokens were traded at
WazirX At £ 110, which moved between £ 132-140 during the recent recession of cryptocurrencies, unlike the larger currencies that recorded a significant depreciation. Tokens are ranked 40th on the exchange.

It is also one of the few projects with its own investment department called Borderless Capital. A Miami-based venture capital firm announced on November 30 a new $ 500 million fund to invest in the Algo DeFi ecosystem.

What is Argoland?

Like all other public blockchain platforms, Algorithm
Distributed network.. However, it aims to solve the “blockchain trilemma” and addresses three major issues facing the ecosystem today: speed, scalability, and security. Launched in 2019 by Turing Award-winning computer scientist and MIT professor Sylbio Mikari.

Blockchain trilemmaSEBA Bank AG

Unlike Bitcoin, Micali created Algorithm as a payment-focused network, but with the ability to handle even more transactions (1,200 transactions per second (TPS)), the “Instant Finale”. Add “Riti” to the network, which is set to reach about 3,000 TPS after the next update. By comparison, Bitcoin can handle less than 5 TPS, while Ethereum can handle about 13 TPS.

Algorand — That's why crypto enthusiasts are so bullish on this “Ethereum Killer”
Silvio Micali, founder of ArgolandWikimedia Commons

This is an important feature.It is one of the biggest obstacles in today’s crypto space because it helps to achieve scalability, and some pegs ALGO
Ethereum Killer‘. Visa and Mastercard’s existing payment systems can handle 1,700 and 5,000 transactions, respectively. A hindrance to scaling crypto apps is the fact that transactions can take a long time to process.

It also uses a “pure proof of stake” (PPoS) consensus mechanism. This means that only selected groups of miners will be rewarded for lending computing power to complete a transaction. This is the same system currently used by Cardano and Solana, and Ethereum is heading to reduce gas charges on the network.

Speed ​​and low transaction fees are prerequisites for making a public blockchain network a real payment system that can be scaled at the world level.

Algorand also has inflation in the sense that it has a limited number of ALGO tokens on the network. Supply is limited to 10 billion ALGO tokens, of which 3 billion will be in circulation during the first five years, including 25 million auctioned at launch. The remaining 1.75 billion will be distributed to miners as rewards over time, and 2.5 billion will be allocated to relay nodes (a type of mining node supported by Algorithm).

An additional $ 2.5 billion has been booked with the Algorithm Foundation and Algorithm Inc, which operate and maintain the network, respectively. The final 2.5 billion will be distributed to end-user grants.

How does Argoland work?

Yes, Algorithm uses a proof of stake (PoS) consensus mechanism, but the mining protocol of the Algorithm network is quite different from what you understand about PoS. Instead, the network works with what is called the Pure Proof of Stake (PPoS). This is a more egalitarian approach than PoS and aims to avoid the phenomenon of “getting rich”. Basically, PoS rewards the miners with the most interests, while PPoS randomly selects miners regardless of their interests in the system.

There are two types of nodes in the network: participating nodes and relay nodes. The relay node acts as a network hub and its role is to maintain connectivity between all other nodes in the system.

Participating nodes are the nodes that actually provide the computing power to validate transactions, and these are the most rewarding nodes. Participating nodes use relay nodes to communicate with each other and maintain their ledgers.

With Algorand, anyone can run a relay or a participating node, but the participating node will be rewarded for the work, but the relay node will not be able to “mining” ALGO. Instead, the Algorithm and Foundation provided a reward mechanism for relay nodes. This will be vested in 2-5 years. They run virtualization software called the Algorithm and Virtual Machine (AVM) to connect to the Algorithm network.

But that’s not the only internal behavior of the network. The Algorand network has its own way of managing smart contracts. This is a feature of the top blockchain network that allows you to build decentralized apps (DApps).

“Smart contracts make blockchain programmable. Like vending machines, smart contracts establish well-defined procedures for transferring assets. For example, Alice buys a token issued by Bob. I want to send coins to Bob’s smart contract. The contract code counts the coins and probably confirms that Alice is in the qualified investor’s contract database before putting the correct number of tokens into Alice’s account. Transfer. The exchange is transparent. Alice can inspect the code of the contract and the code will be executed without Bob’s participation. “

Excerpt from Silvio Micali’s blog post

A secret source that makes South African rand an alternative to Ethereum

Algorand processes smart contracts in two layers, on-chain and off-chain. At Layer 1, the system allows smart contracts to be executed “on-chain” in much the same way as Ethereum. This means that all smart contracts are adding traffic directly to the network, and too many of them can slow down the network.

To avoid this, Algorithm also offers Layer 2 smart contracts, which run “off-chain”. This means that smart contracts do not add traffic to the network, but run outside of that range before being added to the blockchain ledger.

What is AVM?

As mentioned earlier, an Algorithm virtual machine is software that runs on all nodes on the Algorithm network, both relay nodes and participating nodes. AVM includes a stack engine that evaluates smart contracts on the Algorithm and network. AVM evaluates all the logic in the smart contract and decides whether to execute them.

Algorand claims to be carbon neutral, if not carbon negative

No, Algorithm doesn’t work with magical green power supplies. There is no reason why miners wouldn’t use green electricity to power their infrastructure, but the Algorithm and Foundation have promised to offset the network’s carbon dioxide emissions through a partnership with the Spanish environmental foundation Climate Trade.

To create a carbon negative network, Algorithm and ClimateTrade have decided to implement a sustainability oracle. It notarizes the carbon footprint generated by Algorithm’s on-chain transaction with a certain amount of blocks. Algorand uses smart contracts to lock an equivalent amount of carbon credits and put the same amount into the green treasury to offset carbon dioxide emissions.

Is Argoland an Ethereum killer?

This is not really a “yes” or “no” answer. However, there are pros and cons, but the big pros are the fact that Algorithm is faster than Ethereum and there is no concept of gas charges. The minimum transaction for Algorand is 0.001Algos, which depends only on the size of the transaction.

Algorand Standard Asset (ASA) is also similar to the ERC-20 token. Both are because you can build smart contracts. However, while the ERC-20 always adds traffic to the Ethereum network to increase gas charges, ASA smart contracts can also run off-chain, reducing transaction charges.

In addition, the bridge between the ASA and ERC-20 allows applications built with Algorithm to communicate with applications built with Ethereum. That is why currencies such as tethers and USDC can be transferred to ALGO at 1000 TPS.

The unwavering price of Algorithms on exchanges like WazirX is a good sign that cryptocurrencies are running on a strong foundation.

Argoland and CBDC

As mentioned earlier, the biggest advantage of Algorithm is that it can solve the blockchain trilemma. In short, it is one of the best networks to power the Central Bank’s Digital Currency (CBDC), as is currently being developed in countries such as India. The Republic of the Marshall Islands chose Argoland earlier this year to power its currency. 16 other such CBDC projects are also underway.

Disclaimer: This is a sponsored post in partnership with WazirX. Do your own research (DYOR) before deciding to invest in assets, cryptocurrencies, or anything else.

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