{"id":10595,"date":"2023-02-21T00:55:37","date_gmt":"2023-02-21T00:55:37","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=10595"},"modified":"2025-09-10T15:22:56","modified_gmt":"2025-09-10T15:22:56","slug":"what-is-algorand-algo-a-blockchain-without-borders","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders","title":{"rendered":"What is Algorand (ALGO)? A blockchain without borders"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#what_is_algorand_algo\" >What is Algorand (ALGO)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#lets_take_it_one_step_at_a_time_how_does_it_work\" >Let\u2019s take it one step at a time: How does it work?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#pure_proof_of_stake\" >Pure Proof of Stake\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#safety_through_randomization\" >Safety through randomization<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#its_two_layers\" >Its two layers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#the_node_structure\" >The node structure\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-algorand-algo-a-blockchain-without-borders\/#token_algo\" >Token: ALGO<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><p>It\u2019s no secret that\u00a0<strong>scalability, security and decentralization<\/strong>\u00a0are three aspects that shine on their own within\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-blockchain-and-how-does-it-work\">blockchain technology<\/a>. Of course, this is\u00a0<strong>because of how necessary these pillars are to building a healthy ecosystem.<\/strong><\/p>\n<p>Consequently,\u00a0<strong>there are many projects that focus on improving these aspects<\/strong>, rather than others that may attract more attention such as virtual reality, dog memes or NFTs.<\/p>\n<p>In fact,\u00a0<strong>these 3 are such essential pillars that huge projects such as\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ethereum-eth-and-how-does-it-work\">Ethereum<\/a>\u00a0are implementing changes such as\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ethereum-improvements-proposals-eip\">EIP 1559<\/a><\/strong>\u00a0in order to keep improving on these issues.<\/p>\n<p>Now, what if I told you that there is a\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-third-generation-blockchain\/\">third generation<\/a>\u00a0project that is focused on this and<strong>\u00a0is driving users crazy with its efficiency?<\/strong><\/p>\n<p>It\u2019s absolutely interesting, isn\u2019t it, but add to that the fact that\u00a0<strong>it has positioned itself among the 50 projects with the highest market capitalization and has only been around for a few years since its launch.\u00a0<\/strong><\/p>\n<p>Today we welcome you to a new galaxy: Algorand (ALGO),\u00a0<strong>the project that threatens Ethereum\u2019s supremacy in the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/\">DeFi<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-dapp\">DApps<\/a>\u00a0industry.<\/strong><\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"what_is_algorand_algo\"><\/span>What is Algorand (ALGO)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>As we have said, Algorand<strong>\u00a0is an open source blockchain that aims to solve the three main problems facing blockchains today:<\/strong><\/p>\n<ul>\n<li>\n<ul>\n<li>Decentralization.<\/li>\n<li>Scalability.<\/li>\n<li>Security.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>To this end, i<strong>t leverages a two-layer structure and a unique variation of the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-proof-of-stake-and-how-does-it-work\">Proof of Stake<\/a>\u00a0algorithm, called Pure PoS<\/strong>. This ensures that transactions are processed and completed faster.<\/p>\n<p>It also seeks to\u00a0<strong>eliminate intermediaries, reduce fees and eliminate delays.<\/strong>\u00a0In general, it aims to improve the processes that make financial systems cumbersome.<\/p>\n<p>It also aims to become a public and permisionless blockchain. In other words,\u00a0<strong>any user can use it without the need for a high capacity PC.<\/strong><\/p>\n<p><strong>Its roots go back to 2017 when MIT computer scientist and Turing Award winner Silvio Micali<\/strong>\u00a0developed this blockchain network through the Algorand Foundation.<\/p>\n<p>Silvio Micali,\u00a0<strong>is a\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-cryptography-the-basis-for-the-birth-of-cryptocurrencies\/\">cryptography<\/a>\u00a0specialist, having been part of the cryptographic community since 1980<\/strong>. He is also co-creator of the Zero Knowledge Proofs (ZKP).<\/p>\n<p>He has always been a researcher, and when he learned about Bitcoin and blockchain technology, he became more interested in it.<\/p>\n<p>After that,<strong>\u00a0he started working on a personal project that aimed to improve some factors of\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-bitcoin\">Bitcoin<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-ethereum-eth-and-how-does-it-work\">Ethereum<\/a>.\u00a0<\/strong><\/p>\n<p>For this reason,<strong>\u00a0he teamed up with Nickolai Zeldavich<\/strong>, an MIT colleague at the Computer Science and Artificial Intelligence Laboratory (CSAIL).<\/p>\n<p>With his help,\u00a0<strong>they conducted a large-scale experiment to test Micali\u2019s idea<\/strong>, for which they used Amazon\u2019s servers.<\/p>\n<p>Since then, h<strong>e formed his multidisciplinary team to create Algorand, which includes researchers, cryptographers, mathematicians and developers.<\/strong>\u00a0Finally, in 2019, they launched Algorand.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_1180684007\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO2.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO2.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO2-300x205.jpg 300w\" alt=\"\u00bfQu\u00e9 es Algorand (ALGO)? Una blockchain sin fronteras\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO2.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO2-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO2.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"lets_take_it_one_step_at_a_time_how_does_it_work\"><\/span>Let\u2019s take it one step at a time: How does it work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h3><span class=\"ez-toc-section\" id=\"pure_proof_of_stake\"><\/span><b>Pure Proof of Stake\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Algorand\u2019s consensus protocol, Pure Proof of Stake,\u00a0<strong>does not use centralized delegates from fixed committees to validate blocks, so it is considered pure.<\/strong><\/p>\n<p>In simple terms, the following process occurs to verify a transaction:<\/p>\n<ul>\n<li>\n<ul>\n<li><strong>PPoS randomly selects committees among the holders of the ALGO token.\u00a0<\/strong>Therefore, any of the holders can participate in the consensus.<\/li>\n<li>The selected committees\u00a0<strong>validate and approve the following block.<\/strong><\/li>\n<li>Each time a block is written to the blockchain, a new set of committees is made and randomly selected and\u00a0<strong>the block creation process begins again.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>After all, each user receives an amount of reward proportional to his or her participation per block.<\/p>\n<h3><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"safety_through_randomization\"><\/span><b>Safety through randomization<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The selection process\u00a0<strong>is done randomly so that nothing can know who will make up the next committee.<\/strong><\/p>\n<p>This is because bad actors could influence future committee members.<\/p>\n<p>For this purpose,\u00a0<strong>it uses a custom cryptographic randomization tool called \u201cverifiable random function\u201d or VRF.<\/strong><\/p>\n<p>With VRF, there is no authority to select participants.<\/p>\n<h3><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"its_two_layers\"><\/span><b>Its two layers<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As mentioned, it has a two-layer structure.<\/p>\n<ol>\n<li>\n<ol>\n<li><strong>The first layer<\/strong>\u00a0works with smart contracts for security. Additionally,<strong>\u00a0it allows creating ASAs that are new or existing tokens (such as USDC and USDT)<\/strong>\u00a0on the Algorand blockchain.\n<p>From other points of view, it is something like ERC-20 tokens on the Ethereum network.<strong>\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-an-atomic-swap\/\">Atomic exchanges<\/a>\u00a0(fast cryptocurrency exchanges) are also handled.<\/strong><\/p>\n<p>At this level, ASAs and the generation of new\u00a0<strong>fungible tokens are what the\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/\">DeFi<\/a>\u00a0market favors.<\/strong><\/li>\n<li><strong>The second layer\u00a0is reserved for more comprehensive\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-smart-contract\">smart contracts<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-a-dapp\">dApp<\/a>\u00a0development.<br \/>\n<\/strong><br \/>\nWhen smart contracts are executed at layer 2, it is as if they are carried out outside the blockchain. For this reason,\u00a0<strong>simple transactions at layer 1<\/strong>\u00a0<strong>are fast<\/strong>\u00a0and, in general, transactions are processed in an effective way.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<h3><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"the_node_structure\"><\/span><b>The node structure\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Pure PoS algorithm of this decentralized network\u00a0<strong>requires a specific order for its operation<\/strong>, so it has two types of nodes.<\/p>\n<ol>\n<li>Firstly,\u00a0<strong>the relay nodes<\/strong>\u00a0are the ones that allow a message to reach the nodes with which it is interconnected. This works successively until the message reaches the entire network. This is ideal for reducing bandwidth and maximizing speed.<\/li>\n<li>Secondly, we have\u00a0<strong>the participation nodes<\/strong>, which are in charge of generating, voting and verifying the Algorand blocks.<\/li>\n<li><\/li>\n<\/ol>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<h2><span class=\"ez-toc-section\" id=\"token_algo\"><\/span>Token: ALGO<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>ALGO is the native token of Algorand\u2019s blockchain.<strong>\u00a0It is one of the fastest, safest and most reliable digital currencies in use today<\/strong>\u00a0and strengthens the vision of a borderless economy.<\/p>\n<p>At the start of the project, an\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/what-is-an-ico-initial-coin-offering\">initial coin offering (ICO)<\/a>\u00a0was conducted and the project<strong>\u00a0raised approximately $60 million.\u00a0<\/strong><\/p>\n<p>Undoubtedly,\u00a0<strong>its main use is to pay fees within the network.<\/strong>\u00a0However, it is also used as:<\/p>\n<ul>\n<li>\n<ul>\n<li><strong>Reward\u00a0<\/strong>for block creators.<\/li>\n<li><strong>Payment mechanism<\/strong>\u00a0to buy and sell goods or services.<\/li>\n<li>Guarantee for\u00a0<strong>the financing of the ongoing<\/strong>\u00a0development of the project.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>It has a supply of 10 billion tokens that are planned to be distributed for 10 years\u00a0<\/strong>and can be purchased on exchange platforms.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_902623371\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO1.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO1-300x205.jpg 300w\" alt=\"\u00bfQu\u00e9 es Algorand (ALGO)? Una blockchain sin fronteras\" width=\"768\" height=\"526\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO1.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO1-300x205.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/07\/Que-es-Algorand-ALGO1.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>Congratulations on making it all the way to the end!<\/p>\n<p>You are an exemplary Bitnauta. It has been an article full of information,\u00a0<strong>but we hope it has been useful for you to understand a little more about the crypto ecosystem.\u00a0<\/strong><\/p>\n<p>But\u2026oh\u2026wait, you were left wanting more?<\/p>\n<p>Don\u2019t worry! At Bitnovo, we are working hard<strong>\u00a0to provide you with the best information<\/strong>\u00a0at your fingertips and\u00a0<strong>in less time than a rooster can crow\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/\">on our blog<\/a>.\u00a0<\/strong><\/p>\n<p>We also have\u00a0<a href=\"https:\/\/www.bitnovo.com\/en\/quote-cryptocurrencies\/\">our own website<\/a>\u00a0where\u00a0<strong>we bring you closer to the world of cryptos in an easy and safe way.<\/strong><\/p>\n<p><strong>Are you ready to take action?<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 4<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>It\u2019s no secret that\u00a0scalability, security and decentralization\u00a0are three aspects that shine on their own within\u00a0blockchain technology. Of course, this is\u00a0because of how necessary these pillars are to building a healthy ecosystem. Consequently,\u00a0there are many projects that focus on improving these aspects, rather than others that may attract more attention such as virtual reality, dog memes [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[165],"tags":[],"class_list":["post-10595","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrencies"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=10595"}],"version-history":[{"count":2,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10595\/revisions"}],"predecessor-version":[{"id":24634,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/10595\/revisions\/24634"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/7720"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=10595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=10595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=10595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}