In this episode of the BeInCrypto news, host Jessica Walker takes a look at Algorand. It aims to be an ecological and effective solution to the blockchain trilemma; a fast, secure and decentralized network. It also hopes to be a solution for stablecoins and governments to launch their own CBDC blockchain. Additionally, Algorand can create and distribute tokens, create NFTs, and hold stablecoins, among other things.
How does Algorand work?
Algorand is a relatively new platform created to allow developers to create decentralized applications with low fees and high transaction speeds. Like Ethereum, Avalanche, or Matic, Algorand offers a framework where people can build whatever they want.
While Algorand projects like Nano can handle 1,000 transactions per second, others like Cosmos, for example, can run 10,000 transactions per second. For reference, Bitcoin can handle 7 transactions per second, and by signing up, Ethereum can handle 30 transactions per second. Perhaps ultimately it could be the protocol that will dethrone legacy global payment processors.
Algorand was founded in 2017 by Silvio Micali, who many believe is the father of the key components of the blockchain. Micali’s research interests include cryptography, zero-knowledge technologies, secure protocols, and inexpensive mechanism designs. Turing Prize-winning professor, Micali is known for being one of the most eminent mathematicians and computer scientists of the past 50 years.
And as its official website says, Algorand “creates technology that accelerates the convergence of decentralized and traditional finance by enabling the simple creation of next-generation financial products, protocols, and value exchange.” As founder, Silvio oversees all research, including theory, security, and crypto finance related to the decentralized blockchain. He has also been an active member of the MIT faculty since 1983.
Algorand’s team officially launched their mainnet in late June after raising $ 66 million in funding. It promised a pure proof-of-stake blockchain that is fast, secure, and truly decentralized. This gave the protocol an initial market capitalization of $ 24 billion.
One of Algorand’s main use cases is its ability to create stablecoins. This is how a popular network for stablecoin and CBDC issuance is also shaping up. Earlier this year, the Marshall Islands announced the Marshallese Sovereign (SOV) as one of the world’s first national digital currencies. nation partnered with Algorand to develop the currency.
re have also been reports that officials from El Salvador have met with Algorand’s team to work on a “stable currency.” Thanks to a partnership between a Canadian company with crypto foundations called Stablecorp, the Canadian dollar stablecoin called $ QCAD will soon be available via the Algorand blockchain. Stablecorp says that the speed of the Algorand blockchain will allow QCAD to find more use cases.
Speaking of partnerships, notable partners include Frontier, a chain-independent DeFi aggregation tier that has received a grant from the Algorand Foundation to grow the Algo DeFi ecosystem. Another is Opulous, the “first decentralized financing offering (DeFi) backed by music as an asset class.” Cryptocurrency asset security platform Curv has also joined Algorand. It will integrate the network into its resource-independent technology infrastructure, while Algorand will benefit from Curv’s custodial solutions.
What is the future of Algorand? In early 2021, there was a growing interest in Algorand due to its ability as a platform for stablecoins. This is particularly because they are becoming increasingly integrated into traditional financial channels. Algorand chain has also proven to be a viable host for CBDC implementations, given its fast, cheap, and secure transactions.
To date, more resources such as USDT and USDC have already been implemented in Algorand. refore, it is only a matter of time before more cryptocurrencies start operating on this forward-thinking blockchain network. Furthermore, with such a massive transaction speed, recorded at 46,000, Algorand promises to be much faster and more scalable than Bitcoin and what Ethereum is today. By adding similar functionality to the Ethereum ecosystem, there really is no limit to what people can build on top of it. Although we think they should focus on one use case and try not to become anyone’s master and handyman.
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