Algorand (CRYPTO:ALGO) was created in 2019 by mathematician and MIT professor Silvio Micali, who was looking for a way to improve blockchain technology by making it decentralized, secure, and scalable. Algorand is a permissionless blockchain network that utilizes a form of proof of stake validation known as pure proof of stake. Permissionless means that anybody who possesses ALGO tokens (the native cryptocurrency of the Algorand blockchain) and is online can participate in the network by serving as a validator for transactions without using a large amount of computational power.
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A proof of stake leader
Micali wanted an alternative to the proof of work method utilized by Bitcoin, which is energy-intensive as blocks become more difficult to solve over time. He felt it was prohibitively expensive for individuals to participate in the network as it requires a large number of dedicated computers to solve each block. Proof of stake means that validators for transactions are selected in proportion to their holdings of the given cryptocurrency. Major digital assets using proof of stake include Solana (SOL), Polkadot (DOT), Cardano (ADA) and Ethereum (ETH), which just moved from proof of work to proof of stake. Algorand differs from other proof of stake assets as a ‘pure proof of stake’ token. Micali views pure proof of stake as an improvement upon proof of stake in that proof of stake protocols can be “monopolized” by large users with large amounts of the given currency, creating a “rich get richer” cycle which takes away from true decentralization. In contrast, validators in a pure proof of stake protocol are selected randomly, regardless of how much of the ALGO cryptocurrency they hold.
Reasonable market capitalization
Since its launch, it has grown to become a $12 billion asset, making it the 20th largest cryptocurrency by market cap. ALGO is up 550% over the past year, but it is…
