Algorand (ALGO) – cryptocurrency review
The developers of the project claim that they are the first to realize true PoS. An unprecedented level of scalability, decentralization and blockchain security has also been announced.
Work on the project is led by Algorand Foundation, a limited liability company. Registration completed in Singapore.
Algorand identified the key goal as creating a blockchain that brings real benefits to the economy. According to the team, this will increase the efficiency of existing financial institutions and open new markets that cannot exist without a decentralized, unlimitedly scalable instrument.
The main work on the project has already been completed. Over $ 60 million of investments were attracted, taking into account the cost of the ALGO token and the issue of tokens, the project may enter the TOP-3 in terms of capitalization in the coming years.
Pure Proof of Stake Feature
The PoS algorithm has been used for a long time and allowed to move away from the energy-consuming PoW, made it possible to mine a wallet. Users are rewarded for participating in transaction verification.
Typically, PoS is implemented by one of 2 methods:
- DPoS – validators are chosen by the community, and the ‘weight’ of the vote is tied to the wallet balance. Then, the selected nodes are involved in transaction confirmation and actually control the network;
- BPoS (Bonded Proof of Stake) – a certain deposit is frozen for a while, in case of violations by the validator, it can be fined.
Both approaches to implementing PoS are not without drawbacks. The main one is the high requirements for potential validators; most network participants cannot claim this role. Maximum – vote for this or that node. PPoF (Pure Proof of Stake) solves this problem.
In PPoF, any participant who has ALGO in their account can be selected as a validator. The amount of crypto in the account only affects the likelihood that they will choose it. At any time, you can get out of the list of those who want, neither insurance deposits nor guarantee payments are needed.
This increases safety. A potential attacker cannot even guess who will become a validator, but it’s impossible to crack all network participants.
What is a Vault
The team developed a special blockchain compression algorithm and named it Vault. Due to this technology:
- Hosts do not store information about old transactions. Each network transaction is valid only for a limited period of time (it is determined by the place in the blockchain where this transaction may appear). The account balance is not directly tied to past transactions; accounts with a zero balance can be deleted without consequences for the network;
- The load on the nodes is reduced. Vault uses adaptive sharding, while account status data is stored on several nodes, nodes do not need to store information about all accounts at once. Due to the fact that the Merkle tree is used, any node can check any transaction. Adaptive caching of the upper levels of the Merkle tree occurs. Due to this, with an increase in the number of accounts in a logarithmic dependence, the cost of throughput also increases.
To add a block to the blockchain, the following conditions must be met:
- Transactions in the block should not expire. To verify this condition, the number of the first and last blocks is included in each transaction, where it can appear on the blockchain;
- No account after adding a block should be with a negative balance;
- All transactions in the block should not have been added to the blockchain before;
- All transactions are correctly displayed in the Merkle tree.
Forks are not possible on this blockchain.
The coin immediately attracted attention. Listing has already taken place on Binance, KuCoin, Huobi, OKEx and several smaller caliber sites.
As for the course, the listing took place in June 2019. At the time of preparation, the crypto price dipped below $ 2 for 1 ALGO token – a standard situation when some holders merge cryptocurrency after the start.
Algorand looks like a reliable project, primarily because of the team working on it and a good idea. Successfully completed private token sales only reinforce this impression. We also note the technical component described in detail – it’s understandable, due to which developers are going to gain a foothold in the market. For this, the project is even forgiven for the lack of a coherent roadmap.