What Is Algorand Blockchain and How to Buy ALGO?

Algorand is a blockchain platform that provides efficient and sustainable solutions using a pure-proof-of-stake consensus algorithm. Its unique approach to blockchain technology makes it a popular choice for businesses, developers, and investors. In this article, we'll explore Algorand's features, tokenomics, and how to buy its native cryptocurrency, ALGO.

What Is Algorand?

Algorand is a blockchain platform that utilizes the proof-of-stake consensus algorithm to enable efficient, secure, and decentralized transactions and smart contracts on its network. Algorand enables a broad range of decentralized applications to function on its blockchain. Algorand ensures that these applications are secure, scalable, and efficient, which are crucial properties for the success of real-world applications.

Algorand blockchain addresses some of the issues encountered in traditional blockchain networks, such as the Bitcoin blockchain. Bitcoin‘s proof-of-work approach to block generation poses challenges, such as the potential for forks, slow transaction confirmations, and anonymity for money laundering. In contrast, Algorand's pure-proof-of-stake (PPoS) approach aims to solve the scalability, speed, and security issues of public blockchain platforms. PPoS selects miners at random, avoiding the "rich growing richer" problem associated with PoS.

Overall, Algorand Blockchain is used for a variety of use cases, including financial applications, supply chain management, and digital identity verification, among others.

How Does Algorand Work?

Algorand's network operates through two types of nodes: participation and relay nodes, which use Algorand Virtual Machine (AVM) software to connect to the network. The AVM's stack engine evaluates smart contracts, which are handled in two layers: on-chain and off-chain. While on-chain smart contracts function similarly to Ethereum, Algorand's off-chain layer 2 smart contracts do not increase network traffic. Participation nodes validate transactions and receive rewards, while relay nodes function as network hubs.

Algorand's two-tiered blockchain design enables creation of Algorand Standard Assets in layer 1 and supports off-chain execution of complex smart contracts and decentralized apps in layer 2, resulting in a high transaction throughput similar to large payment networks.

Algorand also employs the proof-of-stake consensus mechanism where users who stake a certain amount of ALGO to validate transactions and create new blocks. ALGO is also a utility token for transaction fees and minimum balance deposits on the network. Development progress can be tracked on Algorand's GitHub.

What Is ALGO Token?

The Algorand blockchain has a native cryptocurrency called ALGO, the cryptocurrency serves as a utility token for transaction fees and minimum balance deposits, and can be staked by users to participate in consensus and earn rewards. The token is used to govern the decisions made on the Algorand blockchain network through a democratic process called decentralized autonomous organization (DAO). 

In the Algorand blockchain, the benefits of block creation and validation are distributed among all ALGO holders instead of exclusively awarded to block miners. Algorand doesn’t support proof-of-work mining to validate blocks of transactions like Bitcoin and other PoW blockchain. This unique protocol architecture encourages participation in the ALGO staking and promotes decentralization. ALGO rewards are distributed approximately every 10 minutes to incentivize participation.

ALGO Tokenomics

When the Algorand blockchain was created, 10 billion ALGO tokens were minted. As of September 2022, around 6.9 billion ALGO tokens are in circulation, distributed through a range of ecosystem support and community incentives. The Algorand Foundation holds the remaining tokens in secure wallets, with the following allocation:

ALGO Statistics (June 2023)

Features of Algorand Blockchain

1. Smart Contracts and Algorand Virtual Machine: Algorand features the Algorand Virtual Machine (AVM) which supports smart contracts with Turing-complete languages, larger program sizes, more state, and opcodes. It runs on every node in the Algorand blockchain and offers developers the ability to write smart contracts in Python or Reach. The AVM executes smart contracts and smart signatures, enabling developers to take advantage of powerful functionality. The execution is scalable, fast, and secure, with reduced risk and low cost. The platform offers comprehensive development resources and examples of different complex custom dApps for Smart Contracts.
2. Algorand Standard Assets (ASA): The Algorand Standard Assets (ASA) offer a standardized Layer-1 mechanism to represent various types of assets on the Algorand blockchain. These assets can be fungible, non-fungible, restricted fungible, and restricted non-fungible. ASAs are fast, secure, and have low execution costs due to Algorand's transaction fees. They provide easy and simple asset issuance for developers and enterprises, have universal interoperability of all assets, and can be used for asset tokenization, third-party asset issuance, democratizing access to investments, and disintermediating cross-border transactions.
3. Atomic Transfers: On the Algorand blockchain, Atomic Transfers provide a trustless solution in Layer-1 by simultaneously transferring several assets among multiple parties securely. Unlike traditional economies that rely on a trusted or legal framework, Atomic Transfers group many transactions together and execute all transactions or none of them. Atomic Transfers offer a truly atomic execution without the need for escrow or hash time-locked contracts, which is smooth, fast, and low cost due to Algorand's transaction fees. They support all Algorand assets and allow multi-party transfers.
4. High Transaction Speed and Scalability: Algorand blockchain is highly scalable and has high transaction speed, with a block proposal time of 0.5 seconds, a new block finalization time of 2.5 to 4.5 seconds, and a maximum capacity of 25,000 transactions per block, resulting in a throughput of about 6,000 TPS. 
5. Low Transaction Fees: Unlike Bitcoin and Ethereum, Algorand does not utilize gas fees. However, transactions on Algorand require a minimum fee of 0.001 Algo based on their size.
6. Sustainable: The Algorand blockchain network is a highly sustainable process with a negative carbon footprint due to its energy-efficient design.
7. Developers-Friendly: Algorand offers a developer-friendly ecosystem with initiatives like the Algorand Standard Assets framework for token development, which simplifies decentralized applications (dApp) development. The Algorand platform is open-source, which gives developers the opportunity to contribute to Algorand development.

ALGO Token Value

The value of ALGO coins is determined by supply and demand, with the supply capped at 10 billion tokens. The demand for ALGO is influenced by the growth of the Algorand ecosystem, adoption, interest from investors and utility. ALGO's value comes from its scalability, security, and sustainability. As the Algorand ecosystem grows and the demand for ALGO increases, its value is expected to increase.

How to Buy ALGO Tokens?

CoinEx is a global cryptocurrency exchange, trusted by 5+ millions of users worldwide with 100% reserve. With its 700+ tokens supported, including ALGO, users can now trade easily and seamlessly. To purchase ALGO on CoinEx, follow the steps below.

1. To begin trading on CoinEx, you must first create an account.
2. After logging in, deposit funds into your CoinEx account using one of the supported cryptocurrencies or deposit methods supported by the exchange.
3. After depositing fiat or cryptocurrency into your account, you can trade for ALGO coins. Go to the ALGO trading page, choose a trading pair, and specify the amount of ALGO tokens to purchase.
4. Purchasing ALGO is a straightforward process once you have located the appropriate trading pair. Simply select the relevant pair, specify the desired quantity of ALGO, and trade the paired token for ALGO.

With these simple and straightforward instructions, you can buy ALGO on CoinEx in a simple manner.