What is Algorand (ALGO)?
Algorand is a blockchain that has gained a lot of notoriety since its launch. Algorand
's cryptocurrency, ALGO, is therefore very popular among crypto traders. The value of the token has therefore already gone up since its launch, as has the number of applications running on Algorand's blockchain. Below you can read what Algorand is, how it works and where you can buy and store Algorand (ALGO).
What does Algorand do?
Algorand is a public blockchain that supports smart contracts. This means that anyone can join the blockchain's network, or use what the network has to offer. The network of a public blockchain needs to be scalable enough to avoid problems that many other blockchains run into.
Thus, because Algorand offers support for smart contracts, developers can build their own decentralized application (dApp) on Algorand's blockchain
. It is also possible for developers to develop their own token on the blockchain. For this, developers and users can pay with ALGO tokens.
The blockchain was only launched in 2019, but since then it already has a fairly large number of users. This is because the team behind Algorand has optimized the blockchain to process transactions quickly. A transaction made on Algorand can be processed at about the same speed as a transaction made with Mastercard or Visa.
Because of this high speed for transaction processing, Algorand can be seen as a serious competitor to Ethereum
. After all, both blockchains are suitable for the development of applications and tokens. However, Algorand seems to be a lot faster and more scalable, but has not yet proven itself on a large scale, as Ethereum has.
Pure Proof of Stake (PPoS)
Algorand uses the Pure Proof of Stake (PPoS) consensus mechanism. This mechanism determines the way nodes in the network interact with each other. For example, all rules are defined in this mechanism, and computers check each other for compliance with these rules.
This mechanism is based on the Proof of Stake (PoS)
mechanism, which is known for its energy efficiency. The difference is that PPoS uses a special randomness for choosing validators. This makes the blockchain a lot more durable than, say, Bitcoin or Ethereum, which use Proof of Work (PoW).
Algorand's cryptocurrency: ALGO
Algorand has its own cryptocurrency: ALGO. ALGO's total supply is fixed at 10 billion coins. Thus, there will never be more than 10 billion coins in circulation. In Algorand's block explorer, you can see how many ALGO coins are currently in circulation. The Algorand Foundation, the organization behind Algorand, issues the tokens according to a certain schedule.
The ALGO tokens are distributed in the following way:
- 3 billion - Will be put into circulation over 5 years;
- 1.75 billion - Reward for participation;
- 2.5 billion - Reward for nodes;
- 2.5 billion - For the Algorand Foundation and Algorand Inc;
- 0.25 billion - For users.
ALGO can be used for several functions. For example, the gas fees on the network are paid with ALGO. The nodes therefore receive their rewards in the form of ALGO tokens.
Anyone has the option to discontinue ALGO, since Algorand uses a consensus mechanism based on Proof of Stake. You can also stake ALGO at Coinmerce. Further on in this article you will read how to do that.
Where can you buy Algorand (ALGO)?
You can create an account here
. After you have created an account, we will verify your account. Once the verification has been successfully completed, you can log in and purchase ALGO tokens,
Where and how to store Algorand?
When you purchase Algorand from Coinmerce, ALGO coins are moved directly to the wallet associated with your Coinmerce account. The coins in the wallets of Coinmerce users are kept in cold storage for the most part. So you don't have to worry about the security of the wallet.
It is also possible to store your ALGO coins in your own hardware wallet. To do this you will have to send the coins from your Coinmerce wallet
to the address of the hardware wallet. For this you will pay fees charged by the blockchain. Coinmerce has no influence on these costs.
Where can you stake Algorand (ALGO)?
Algorand uses Proof of Stake, which allows anyone to set up their own validator in the network of this blockchain. Staking on Algorand's blockchain allows you to earn an interest on the ALGO tokens that you stake for a certain amount of time. Setting up your own validator requires technical knowledge, which makes it quite difficult to get started with staking.
You can therefore also stake Algorand at Coinmerce. You can do this quite easily from your own wallet if you already have ALGO tokens in there. It is also possible to stake on the coin page of Algorand by buying ALGO tokens with iDeal, Bancontact or other payment methods. In both cases, you will need an account at Coinmerce.
Algorand staking at Coinmerce can earn you 4% interest per year. You have the option to choose for how long you want to stake, as Coinmerce offers flexible staking, and will need to use a minimum of €10 before you can begin to stake. The proceeds you earn from staking Algorand will be moved to your Coinmerce wallet.
Algorand is a blockchain that can be used to develop decentralized applications and tokens. Transactions made with this application or tokens are processed in about 4 seconds. This low processing time is partly due to the consensus mechanism that Algorand uses: Pure Proof of Stake (PPoS).
This consensus mechanism also allows users to stake ALGO. This allows you to earn interest on your ALGO tokens. You can buy and stake Algorand on the Coinmerce platform.