In this review, I take you through Algorand, the pure proof of stake blockchain that’s aiming to deliver decentralization, scale, and security for all participants.
Firstly, I’ll provide an overview of Algorand, then explain how to safely buy Algorand’s ALGO tokens and store them securely in a supported wallets. Plus, I’ll also explain how to stake Algorand ALGO tokens to earn rewards.
What is Algorand?
Algorand was launched in mid-2019 and is a public cryptocurrency blockchain and protocol that aims to deliver decentralisation, scale, and security for all participants.
They use a permissionless proof-of-stake protocol called “Pure Proof Of Stake” for validating blocks into its chain. Unlike Proof of Work (used by Blockchain) or Proof of Stake, Pure Proof of Stake ensures full participation.
Every token holder with at least 1 ALGO in their account can choose to participate, in which they can be randomly chosen to propose and add new blocks to the chain. The more tokens you hold, the more likely you are to be chosen. Users can choose to participate by declaring their availability or if they’d prefer not to, they can simply stake their tokens and earn rewards like they would with Proof of Stake.
What is Pure Proof of Stake?
Pure Proof of Stake enhances security as the token holders are chosen at random and an attacker doesn’t know which ones they are beforehand. It also promotes decentralisation because anyone can participate and you don’t have to solve any complex mathematical problems like a miner would with Proof of Work.
It also offers speed with fast transaction processing, finalising block in seconds with throughput on par with large payment and financials networks. Plus, very low transaction costs
Who Are Algorand?
Algorand is a Boston-based project which was created by Silvio Micali. A Turing Award winner, computer scientist and Massachusetts Institute of Technology (MIT) professor. Micali is joined by a team of blockchain experts and researchers.
The Algorand Foundation is in charge of the project and reported that Algorand managed to raise $60 million from their public sale in June 2019.
What is the Algorand ALGO token?
As with most blockchain’s Algorand also has its own native token $ALGO. ALGO is used as a transfer of value on the network and powers the Algorand Protocol.
Algorand Tokens/Standard Assets
As well as their own Algorand ALGO token, there are other cryptocurrencies also running on the Algorand blockchain, known as Algorand Standard Assets (ASA). These are similar to the likes of an ERC20 token that run on the Ethereum blockchain.
These ASAs can include fungible assets (such as currencies, stable coins, utility tokens, etc), non-fungible assets (unique assets such as tickets, etc.), restricted fungible assets (such as securities), and restricted non-fungible assets (such as licenses, certifications).
The Algorand Standard Asses are fast and secure as they are built directly into Algorand’s Layer-1. Plus they are low cost to execute due to Algorand’s minimal transaction fees.
Algorand’s “Atomic Transfers” offer a secure way to batch transactions to allow groups of transactions to be submitted at one time. During this transaction, if any of the transactions fail, then all the transactions will fail.
This allows for several use cases, including payments to be made to multiple recipients, and can be used in decentralized exchange, enabling trades without going through a centralized exchange.
Where Can You Buy ALGO Tokens?
There are many exchange platforms where you can trade for Algorand’s ALGO token. Below are some of my personal favorite exchanges. However, you can check out a full list of available exchanges on the likes of CoinMarketCap or CoinGecko.
Binance Exchange is one of the largest crypto exchanges in the world by trading volume with the lowest fees in the indursty at just 0.1%.
With Binance you can trade for ALGO, using cryptocurrencies and stable coins such as BTC, USDT, BUSD, BNB and TUSD.
The ALGO token was listed on Coinbase in July 2020 and was the fastest a token has ever been listed on exchange. With Coinbase users can buy, sell convert, send and receive or store ALGO in all Coinbase Supported Regions.
Plus you can also watch videos and earn ALGO through their Coinbase Earn feature.
Crypto.com is a one-stop-shop for crypto that launched in 2019. The exchange enables users to trade crypto to crypto, with low fees and deep liquidity.
How to Store ALGO?
Once you have purchased or traded from your ALGO tokens, it’s important to store these in a supported wallet. Keeping your tokens on an exchange is not recommended as it is a far more likely target for hackers. Plus you don’t have control over your assets without access to your private keys.
Below is a list of a few of my top ALGO-supported wallets. However, there are more available such as the likes of the Atomic Wallet or MyAlgoWallet.
The Algorand Wallet is the official wallet, built by the team that that built the Algorand Blockchain. The wallet, which is available as a mobile app for Android or iOS devices allows you to securely manage your Algorand assets while earning rewards.
With the wallet you can send, receive, or HODL Algos and Algorand Standard Assets. Plus you can automatically earn rewards, just by having Algos in your accounts.
Algorand wallet also allows its users to create accounts within the Algorand Wallet that are backed by a Ledger hardware wallet. Giving you increased security with your private keys never touching your mobile. Plus all transactions from your Ledger-backed account will require authorisation.
With Ledger you can manage your Algorand and the Algorand Standard Assets directly within Ledger Live. Meaning that you’re ALGO or ASA tokens are stored safely offline and away from any potential harm.
Plus ALGO rewards can also be claimed via Ledger live.
If you’re looking for a free wallet to store your ALGO tokens, the Exodus desktop wallet supports these tokens. With Exodus, you can send, receive, stake and exchange with the ALGO wallet.
The Exodus wallet is also available for Android and iOS meaning you can keep a track of your portfolio on the go.
How to Stake ALGO?
With Algorand there is no delegation required. Meaning that all you need to do is hold 1 ALGO on your address to start earning rewards. Usually, with cryptocurrency staking, you need to become a validator or delegate your tokens. However, with Algorand they really simplify the process.
To start earning you simply deposit your ALGO into a supported wallet and your ALGO will automatically accumulate over time.
The rewards you receive are automatically claimed whenever the next operation takes place on your address. This can be either the sending or receiving of some ALGO.