A Borderless Economy giving Access to the Advantages the Financial World can provide.
For ages, the world economy has been hampered with unnecessary and insoluble restrictions until technology took center stage. Cryptocurrency, an online exchange mechanism leveraging cryptographical functions and blockchain technology has undoubtedly transformed the world economy into a better phase.
One of the prominent key features of cryptocurrency is that it creates a borderless economy that is not regulated by any central authority. Many have seen their business or life opportunities ruined by bad financial decisions of the government. Countries have continued to experience inflation and hyperinflation which is only favoring a particular set of individuals with the average or low-income earning individuals suffering as a result of the poor decisions of the government.
With cryptocurrency, there is no central authority controlling your assets. You are responsible for every decision you make on your assets and transactions are swift and efficient. There are currently several cryptocurrency projects providing these essential benefits of the borderless economy but Algorand stands out among others.
Algorand is one of the cryptocurrency blockchains with the primary aim of enabling a borderless economy by developing sophisticated platforms for use on the blockchain space. The ideology of Algorand development is focused on creating a public blockchain, one that offers everyone a boundless and viable opportunity. Efficiency, direct usage, adoption, immediate validity, and usability are the central tenets of its growth.
To date, the work on the Algorand project has centered on building a legitimate economy that changes our global financial systems’ underlying technologies. They are working towards solving the trilemma facing blockchain through the following means:
The Algorand Foundation is fully focused on making Algorand a fully decentralized blockchain both in its voting power and distribution of nodes. It’s Relay and Participation Nodes remain public and unregulated and a variety of organizations from a wide range of technical and institutional backgrounds through several countries and continents have leveraged the network.
In the initial phases of the Algorand blockchain, Algorand incorporation resolved to place just part of its overall stake online in order to not have a centralizing status while still preventing the network from enemy attacks. These steps were taken to ensure that the Algorand network achieves its objective of true decentralization in the fastest and safest way possible.
Algorand’s public chain confirms transactions with latency in the order of one minute while being scaled to many users. Algorand ensures users can never have differing views on verified transactions, except when any of the users are fraudulent and the network is partitioned temporarily.
By contrast, most cryptocurrency projects only allow temporary forks and by so doing, require a long time to confirm transactions, like an hour.
Since the Algorand protocol utilizes pure proof-of-stake to randomly select a small set of block proposers and verifiers, users need only obtain a fixed amount of messages to reach a consensus on the next block.
Algorand’s consensus protocol doesn’t require users to solve cryptographic puzzles in order to propose or verify blocks like Bitcoin’s proof-of-work protocols. In Algorand’s protocol, the computation expense a user faces only requires the generation and verification of signatures and basic counting operations while in Bitcoin, computation effort is wasted, and if further computing power is directed into mining, the fundamental puzzles have to be made tougher to sustain the required block generation rate, thereby increasing computational loss without enhancing the blockchain efficiency.
Cost varies with Algorand’s protocol but it depends on the number of users selected per block, which is constant and not affected by the size of the entire network.
One of the major focuses of blockchain projects is the security of the user’s funds. A place where users can safely transact, reserve assets of high value, and create trusted business applications. At both consensus protocol level and network level, Algorand retains protection from attacks all while securing user’s accounts.
The active development is really what makes Algorand stand out from other blockchains. They launched their mainnet in the middle of 2019 and have since then fulfilled their promise of creating a borderless economy.
Few months after Algorand launched their Mainnet, Algorand 2.0 was released by the development team, bringing new features like Smart Contracts at Layer 1, Atomic Transfers, and Algorand Standard Assets.
Algorand Smart Contracts at Layer 1
A smart contract is an automated contract featuring written lines of codes of agreement terms between parties. Code and contracts operate over a decentralized blockchain system. Smart contracts enable the conduct of secure transactions and agreements by separate, anonymous parties with no need for a trusted intermediary. Most smart contract systems currently in existence are both unreliable and vulnerable.
Algorand is dedicated to building secure and scalable smart contracts. The Smart Contracts at layer 1 of Algorand is meant to provide users of the network with effective tools to enable them to build and launch their financial products on the network easily.
Tools introduced at Layer 1 helps prevent the uncertainties, expenses, and risk threats associated with smart contracts. The first stage of Algorand’s Layer-1 strategy consists of Algorand Standard Assets (ASAs) and Atomic Transactions (ATs). With these two (2) features, users of Algorand may release their respective tokens without depending on smart contracts. Also, they may carry out any series of transactions, potentially comprising several types of tokens, in a single transaction i.e batch transactions happening in just one.
Algorand Standard Assets (ASAs)
Algorand Standard Asset is a layer 1 function that enables users to display any asset on the Algorand network, whilst enjoying the same degree of safety and user-friendliness as the native Algo. With this cool feature, any asset can be digitalized on Algorand.
Trading assets in traditional banking typically involves a reliable intermediary, such as an exchange or a bank, to ensure all parties achieve what they have agreed upon. On Algorand, this form of transaction is introduced as an Atomic Transfer within the protocol. This implies transactions that are part of the transfer are either successful or unsuccessful. Atomic transfers enable random people to exchange assets even without a trusted third party while ensuring each party receives what they have agreed upon.
When you refer to a borderless economy that requires something of interest to be exchanged between two or more individuals, whoever they might be, without the interference or congestion of financial networks or central authorities, you refer to the digital economy.
Several projects are been built and the potentials of the digital economy are being harnessed to the fullest. Algorand is not left behind in this sense as it has dedicated itself to building a network that enables users to experience the full advantages of a borderless economy.
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Article Written by Helen IMAH - Algorand Ambassador