When the vast majority of the population is unbanked, what are people to do when handling their money? For 60% of adults in sub-Saharan Africa, this is the unfortunate reality largely due to a lack of identity documents.
FlexID is stepping in with funding from Algorand, a blockchain protocol, to offer a solution. They aim to make a decentralized identity network. If you’re puzzled by this, do not fret.
Let’s take a step back and answer the question “what is Algorand?” Read our guide below to get the skinny on this emerging crypto.
What Is Algorand?
All Heading
Algorand is an open-source blockchain as well as a digital currency—ALGO. Much like Mastercard or Visa, Algorand praises itself for being able to process transactions rapidly.
If someone asks you, “what is Algorand?” you can respond with “it’s often seen as a direct competitor to Ethereum.” This is largely due to its ability to host many blockchain-based projects, other types of crypto, and the use of smart contracts.
The cryptocurrency consensus mechanism used in Algorand’s case is Pure Proof of Stake (PPoS). ALGO is capped at 10 billion coins.
Understanding Algorand
When pondering “what is Algorand?” you can see it as a scalable platform with the ability to finalize transactions immediately in a decentralized fashion.
This is done via relay nodes enabling paths of efficient communication. We also see participation notes getting in on the mix to vote and confirm new blocks.
Algorand vs Ethereum
One key difference between Algorand and Ethereum is that Ethereum uses Proof-of-Work (PoW). Soon, Ethereum will transition to Proof-of-Stake (PoS).
Algorand beats out Ethereum in the block time department by only taking about 4 seconds to process.
Algorand Ecosystem
There is a slew of projects in the decentralized finance (DeFi) space with Algorand. There are other types of crypto such as stablecoins and digital fiat.
Mining ALGO
You won’t be able to mine ALGO due to its PPoS consensus mechanism. It uses validators instead of miners for the operation of the blockchain network.
Buying ALGO
If you’d like to buy Algorand, you are free to do so. After purchasing, we recommend moving the funds to a non-custodial wallet for safe keeping.
You can do this either by downloading a wallet or picking up a cold storage wallet. Hot wallets are meant for everyday use while cold wallets are used for long-term storage.
Building Blocks
Now that we’ve answered the question, “what is Algorand?” what do you think? Time will tell how this blockchain and cryptocurrency hold up.
With any cryptocurrency investment, we advise you to do your own research (DYOR) and stay well informed. Study up on the team, community, and road map. Once you have a clearer picture, you’ll be able to make a wise decision.
As the cryptocurrency market changes rapidly, you’ll want to keep up. Lucky for you, you’re already in the right place. Check out our other posts to pique your interest.
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