3 Interesting Facts about The Algorand Blockchain

Facts about The Algorand Blockchain

3 Interesting Facts about The Algorand Blockchain

This weeks AlgoDaddy article will be more easily digestable compared to some previous topics I've covered in the past. I have put together 3 interesting facts about the Algorand blockchain that I haven't been able to talk about in any other article. While the first point (Algorand Cannot Fork) probably deserves a complete article of it's own, it might just be too technical, and it has been well-explained on the official Algorand website already. As for point number 2 - there have been plenty of discussions concerning Algorand being used as a platform for El Salvadors crypto wallet, however I've seen very few people talk about The Marshall Islands, a nation that have already long settled on Algorand to power their CBDC.

Outside of the normal topic intrudction I'll also take the oppertunity to remind my readers of the new  Algorand governance period coming up. The current governance period (G1) is ending on December 31st 2021, and the rewards will be distributed from the 1st through 5th of January 2022. You can commit to the 2nd period of Algorand governance (G2) from December 25th 2021 to January 7th 2022. Read more about Algorand Governance & Staking here.

Now, let's get started with the 3 interesting facts about Algorand that you probably didn't know of!

Algorand Cannot Fork

1. The Algorand Blockchain Cannot Fork

In every Proof-of-Work blockchain there is a small risk of an incident known as "forks" or "forking". What is a blockchain fork? Well, a fork happens when 2 or more mathematical problems (crypto puzzles) are solved at the same time, which results in 2 or more candidates for the next block. This means that the ledgers in the blockchain aren't getting synchronized information, as there are now multiple "branches" (forks) existing within the same blockchain. This results in all but one of these branches stopping to get solved and subsequently dying off, together will all the information on it. In other words - all the transactions on that particular fork ceases to exist. 

Due to of forking of certain blockchains (e.g. BTC) there's usually a built in security system being used. This system holds transactions from being confirmed until several more blocks are sent (which can in Bitcoins case take up to an hour). It does this in order to confirm that a transaction wasn't stuck on a dying fork, since that would result in the transaction completely disappearing from the protocol.

The Algorand blockchain developers solved this by making Algorands blockchain non-forkable. This is possible, as only one block at the time can reach the threshold of all committee votes in the 2nd phase of the Pure Proof-of-Stake system. In other words, once a block appears in the Algorand protocol it's final and it will exist on the protocol forever - this is known as immidiate transaction finality.

The Algorand blockchain was under audit by Runtime Verification, which formally verified that Algorand cannot fork. 

Don't know how Algorand or blockchains in general work? Check out my AlgoDaddy Blockchain Guide.

2. Digital Currency Powered by Algorand - Marshall Islands

The Republic of The Marshall Islands is a sovereign state in the Pacific Ocean with a population of almost 60,000 inhabitants. The nation have been keen to adopt future technology, and on the 2nd of March 2020 the Marshall Islands chose Algorand to be the platform for their digital currency known as SOV (short for Sovereign). Already in 2018 a national bill was passed which recognized SOV as the new legal tender for the country. After 2 years of discussions and analysis it was decided that the Algorand protocol would be the best blockchain to support such a venture. 

The country is highly reliant on trade and finance, with plenty of cross-border deals taking place. The Marshall Island government chose the Algorand blockchain to power the their national digital currency  in order reduce friction in trading for citizens and companies. In addition they were hoping to lower fees and protect themselves against inflation. 

The reasoning for Algorands protocol being chosen as the platform was Algorands excellent capability in issuing, managing and distributing SOV. Speed, scalability and security was also essential aspects taken into account when choosing Algorand - Marshall Islands made a wise decision on the matter.

Digital currencies are centralized and issued by central banks, as opposed to cryptocurrencies which are inherently and decentralized. Digital currencies are often known as CBDC's, an acronym for Central Bank Digital Currencies.

Algorand was Listed on all Top-Tier Exchanges For Free
The picture is purely illustrational

3. Algorand was Listed on all Top-Tier Exchanges For Free

The Algorand project was first created in 2017 by Silvio Micali, an MTI Professor of Engineering, the co-inventor of verifiable random functions and zero knowledge proofs (amongst other things). In 2018 Algorand launched for the first time in the closed testnet. It was eventually released to the public in June 19th of 2019 after extensive fine-tuning of the protocol on the testnet. Immediately upon launch Algorand was listed on all the top-tier exchanges (Kraken, Binance, Coinbase, and more).

The best part? Algorand didn't have to pay a dime in listing fees. This goes to show how the extensive research and development behind the project provided legitimacy and trust in it's unique blockchain technology, right from the start. Such legitimacy results in high belief of adequate long-term valuation as well, which of course is fundamental from the cryptocurrency exchanges point-of-view.

Final Words

This was a shorter article about 3 interesting aspects of the Algorand blockchain that you might not have been aware about before.

Next week I'll be back with another "Algorand Deep Dive" guide, this time on one of the more popular Algorand tokens currently out there. I won't spoil it ahead, but I'm pretty sure the article will be a gem among stones. Wink, wink.

Make sure you follow me on social media if you enjoy my articles. I just recently set up a AlgoDaddy Facebook Page for those who would prefer following me over there. Moreover I'll set up a newsletter in short, mainly so that those who doesn't have social media (I wish I was you) can get updates from the blog in an effortless manner. 

Until next time! Algo and out.


Post a Comment