Algorand blockchain will get ‘instant permanence,’ meaning, the transactions can never be challenged, changed, or reversed. When the ‘consensus mechanism’ on the network approves a transaction, it is immediately regarded irreversibly final and put to a block.
This feature will dramatically increase the network’s scalability, one of the three major challenges. Algorand is a lightning-fast blockchain that can make transactions at 1,300 transactions per second (TPS) and might rise to 3,000 TPS soon.
The algorithm can instantaneously make payments to anyone. There are no wire transfers, paperwork to fill out, banks or exchanges, and no delays. Instead of taking days to move money around, the Algo can do it in less than 4.5 seconds – and the Algo is already in the receiver’s wallet, ready to use right away!
How does Algorand work?
The blockchain works majorly on the Proof-of-Stake (PoS) mechanism. However, the mining techniques are very different from what you might anticipate from a PoS network. Instead, the network runs on a program known as pure-proof-of-stake. In essence, while PoS pays miners with the highest stake, PoS chooses miners at random, regardless of their investment in the system.
There are two types of nodes in the network: participation nodes and relay nodes. The relay nodes act as network hubs, keeping the link between Algorand and the rest of the system’s nodes.
Participation nodes are the people who give computational power to validate transactions, and they are the ones who get the maximum rewards. The relay nodes are used by the participation nodes to interact with one another and make note of the ledger.
Features that fuel the growth of the network
- Smooth Transactions – Algorand crypto could be used for all network transactions, allowing transactions to be executed in a swift manner with ease and affordably.
- High Scalability– The blockchain system used by the network allows it to execute thousands of transactions per second with low latency and cost, which makes it simple for businesses and individuals to adopt Algorand.
- Secure– Cryptographic technology enables the network to preserve data privacy while achieving a high-security level. These solutions enable users to remain private while preventing the manipulation of blockchain transactions.
- Turing- Proof– The Algorand blockchain is Turing complete, which means it can run any program. It makes it simple to create smart contracts and decentralized applications with little to no programming effort.
Is Algorand better than Ethereum?
Algorand manages smart contracts in two layers:
On Layer-1, the solution permits smart contracts to operate ‘on-chain,’ identical to how Ethereum does. Meaning that each smart contract adds traffic to the network, and having too many of them can cause the network to slow down.
To circumvent this, Algorand also enables layer-2 smart contracts, which are executed “off-chain.” This means that the smart contract does not add traffic to the network; instead, it is run outside and then published in the blockchain ledger. It is no secret that Algorand is faster than Ethereum.
The Algorand blockchain ensures that it does not fork. Forking is a problem in blockchains that emerges when a blockchain breaks into many chains. There’s a chance you won’t know if your payment went through if this happens. There can never be forks using Algorand, so you can guarantee that your Algo is where it should be.
What is the future of Algorand?
The Algo is one of the most reliable, secure, and speedy crypto-currencies available today. The Algo will be one of the most important crypto-currencies in circulation once the goal of a Seamless Economy becomes a reality.
The Algorand serves a variety of other purposes for the Algorand community. It is a high-performance crypto-currency. It gives more information on how the Algo powers the Algorand economic and financial ecosystem, how it makes transactions (simple and complex) safer, and how it can release the store of value.