Algorand (ALGO) – All you need to know

What is Algorand?

Algorand is a decentralised alternative to the internet. Fuelled by its native cryptocurrency, ALGO, it was created as a competitor to the Ethereum blockchain. The ALGO coin is used to process transactions on the platform and can be held in a wallet to earn rewards.

Anyone who holds ALGO in a cryptocurrency wallet earns interest on their coins every time a new block is added to the Algorand blockchain. There is a central store of tokens used to pay these rewards, fund innovation, and attract new developers to build on the platform.

Algorand was formed by MIT professor Silvio Micali in 2017. Micali has won the Turing Award for his contributions to cryptography and computer science, and his involvement adds a level of gravitas to the Algorand project.

How does Algorand work?

Algorand works by using a blockchain to store and manage transactions. New transactions are added and approved as long as a majority votes in favour. The ALGO coin acts as a governance token to fuel the whole process, as the majority is determined by the amount of ALGO tokens in circulation.

Adding new blocks in this way is the main difference between Algorand and energy-intensive blockchains like Bitcoin. Using tokens to vote stands in contrast to Bitcoin’s mining process, which requires a lot of computer power and energy to create new blocks. Thus Algorand is a lot faster and more democratic, as it spreads the power out among coin holders rather than focusing it in the hands of those with the most powerful hardware.

If you invest in ALGO you have a few options of what to do with it. You can be an active holder and put it to work as a governance token, you can store it in a wallet and earn interest, or you can trade it on a cryptocurrency exchange.

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