Suppose you want to introduce a friend into the wonderful world of cryptocurrencies and you want to send him a small amount of money, just to show him how it works and to get him experimenting. But which coin would you send him? Of course you're inclined to introduce him to the granddaddy of them all, but Bitcoin (and as of lately Ethereum) isn't viable for small transactions anymore due to their high fees.
Lightning Bitcoin could help out, but the Lightning Network isn't really stuff for a crypto 101 lesson. You could take one of Bitcoins numerous forks, such as Dogecoin instead. But would you want your friend to get his first impression about crypto from some obscure memecoin that somehow managed to stick around? Or, arguably worse, from a coin promoted by Roger Ver or Faketoshi?
Ultimately, it comes down to personal preference of course. For my part, I have never been a big fan of Proof of Work. That's why I always keep a few ALGO on my phone, just for the purpose of giving some of them away for free to people who want to learn about crypto for the first time. I think it's the perfect coin for beginners. The official Algorand wallet is a lightweight mobile app that is not overly complicated and can serve as a good introduction to private keys and seed phrase security. Thanks to 1000 TPS and 5 second block intervals, the money arrives almost instantly at transaction fees that cost only a fraction of a cent.
It is also for that reason I have made it a personal habit to use ALGO for exchange-to-exchange transactions whenever it allows me to save on fees. But the real kicker is that the Algorand wallet automatically stakes the funds, which is my first lesson in crypto investments. Being able to watch your funds grow in real time as you earn staking rewards is, in my opinion, the coolest feature of Algorand for beginners. Advanced users who have a Ledger Wallet can also stake their coins on Ledger Live as of recently.
The Technology
Now, of course I know that being an introductory coin for crypto greenhorns isn't the raison d'être for Algorand. Under the hood is in fact one of the most ambitious smart contract platforms I have seen so far. The Algorand team has kept on improving their blockchain since it launched in June 2019. Over the months, the chain has received upgrades, giving it the ability to execute atomic transfers and smart contracts at layer 1.
Thanks to Algorand Standardized Assets, users can create tokens with built-in transaction controls, which is, for example, useful to achieve regulatory compliance when issuing security tokens. As of lately, Algorand has also introduced stateful smart contracts. This marks their first venture into DeFi territory, which can certainly be aided by their impressive layer 1 features.
Another feature of Algorand is the recent upgrade to a multi-chain architecture that allows developers and enterprises to obtain their own private co-chain, which is governed by the Algorand PoS consensus and is interoperable with the public Algorand Mainchain.
The most recent feature that was introduced on the Algorand blockchain is Rekeying. This decouples spending approval from ownership of the private key and allows wallet owners to transfer control over the funds to a different address, which can be either another wallet, a multi-signature wallet, or even a smart contract.
This and other features carry the ingenious handwriting of Algorand’s founder Silvio Micali. As an MIT professor, he has worked at creating several important cryptographic primitives, such as probabilistic encryption, Zero-Knowledge Proofs and Verifiable Random Functions. In 2012, he won the Turing Award for his advances in cryptography.
Ecosystem Building
Silvio’s academic contacts allowed him to onboard more researchers to the team and the Algorand ecosystem. With their Global University Program, Algorand has erected an academic network across 10 universities. They have also cooperated with Runtime Verification to formally prove that the Algorand blockchain is indeed forkless and thus achieves instant finality.
The Algorand Foundation also invests heavily in ecosystem building. Having already completed a similar accelerator program in Asia, they have recently started the Algorand Europe Accelerator in partnership with Borderless Capital and Eterna Capital, helping startups to build their MVPs on the Algorand blockchains. Besides that, Algorand offers recurring grants to developers, and an ambassador program to spread the word.
Being an enterprise-focused layer 1 blockchain, Algorand seeks to strike partnerships with institutional projects rather than independent developers. A list published in May 2020 mentions 29 Venture Capital partners in addition to 18 project-oriented partners.
Some highlights of the list include SFB Technologies, who are building the central bank digital currency for the Marshall Islands, the leading stablecoin Tether, who have chosen Algorand as one of their host blockchains, and Planet Watch, who are building the world’s first blockchain air quality ledger supported by IoT measurements. Algorand also partnered with World Chess, becoming a sponsor for the FIDE Grand Prix Series. In April 2020, the Australia-based startup Meld has chosen Algorand over Ethereum for building their MVP on a digital gold economy.
Combining both their development and ecosystem building efforts, Algorand has something to offer for crypto enthusiasts in all stages of their journey. Whether you simply want a PoS coin with fast and cheap transactions, invest in DeFi, build your own blockchain project, or become an ambassador, check out the various opportunities Algorand has in store for you.
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