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What is Algorand ?

Algorand is a blockchain technology that gives rise to frictionless finance, Algorand is the first company to manufacture and develop thefisrts ever open-source, permissionless, pure proof of stake blockchain protocol that operates without forking, is decentralized, gives the required amount of security and it is scalable, all that is needed for the modern world. The Algorand’s team is made up of top-notch individuals and they have been able to enhance traditional finance and decentralized financial businesses to come to a point of accepting the new frictionless finance.

Algorand 2.0 is the major upgrade of the protocol, it was introduced for the expansion of the various range of the decentralized applications also called DApps, and also for all the processes that can be built on the Algorand platform. With all of these features that are created directly into layer 1, security and performance would not be jeopardized simply because of the creation of enterprise-scale distributed applications. There are Algorand standard assets, Atomic transfers, and Algorand smart contracts all in layer 1.

Algorand Standard Assets (ASA)

There are so many issues in today’s economy when it comes to the digitization of assets and these issues include:

  • Easy transferability
  • Access to a digital, global market
  • Simple and enforceability of the control of assets
  • Effective administration like good reporting and compliance of users.
  • A fast method of payment

Tokenization of assets on Algorand is made to find solutions to these challenges and also to benefit from simplified usage, increased core security, and finality of transactions on a very high-performance blockchain. Algorand standard assets provide a standardized, layer 1 mechanism for the representation of all types of assets on the Algorand blockchain. These may be fungible, non-fungible, restricted fungible, and restricted non-fungible assets.

Unique Functions

Role-Based Asset Control (RBAC): Assets controls that are flexible and optional for the sake of issuers and managers for business regulatory requirements and compliance. They include:

  • Assets that are quarantined give accounts for investigations to be made.
  • Documentation of off-chain assets are included in the definition of on-chain assets
  • Assets reserve models that are flexible for the sake of custom business requirements.
  • Whitelist model basically for transacting privileged assets that allow only some specific addresses that have the approval to make transactions with some specific assets.

Protection of Users: Spam protection of assets that do not allow unknown assets that probably have tax, reputational or legal risks from being sent to users without the approval of the users.

Differentiators

  • Algorand standard assets are very fast and secure because they are created directly into the layer 1 of Algorand.
  • Asset issuance for enterprise and developers is simple and fast.
  • All assets that are issued on Algorand have universal interoperability.
  • They require low cost for execution because of the Algorand minuscule transaction fees.

Great Use Cases

  • Tokenization of assets
  • Cross border transactions are disintermediated
  • Issuance of third party assets on Algorand
  • Access to investments is available to all.

Atomic Transfers

There is a presence of a trusted or a legal framework in the traditional economy. Atomic transfers are responsible for providing a trustless solution to the layer 1 of the blockchain. There is a secure pattern that atomic transfers employ for the simultaneous transfer of a number of assets amongst a specific number of parties. Generally, a lot of transactions are together in a group and it is either none of the transactions are executed or all of them are executed.

Unique Functions

It is entirely atomic and there is no need for escrow or the need to rely on the hash time-locked contracts. It is actually a modern way of technically executing complex transfers that are fast and smooth. Also with the miniscule transaction fees offered by Algorand, it is of a very low cost to execute atomic transfers. Finally, it supports all Algorand assets, like Algorand standard assets and algos, it also gives room for multi-party transfers.

Great Use Cases

  • Debt settlement is expedited and simplified
  • Matched funding is efficient
  • Multilateral trade at any instance
  • Fast settlement of multi assets and multi-party complex transactions
  • Decentralized exchanges especially when they are joined with Algorand standard assets and Algorand smart contracts.

Algorand Smart Contracts at Layer 1

Algorand Smart contracts are layer 1 smart contracts that enforce custom rules and logic automatically and around how assets such as Algorand standard assets and algos can be transferred. They are economic relationships that are complex and they are made up of basic transactions that are translated in a new language known as Transaction Execution Approval Language (TEAL).

The functionality makes it possible for exciting and innovative ideas of addressing already existing inefficient and complex financial transactions. Moreover, in the economies of today, there are different existing transactions that rely on third parties for the provision of execution and trust. This causes unnecessary delays and cost when delivering to customers. Some of the examples are:

  • Payment of loans
  • Subscriptions
  • Limit orders
  • Escrow accounts
  • Obligations that are collateralized, etc.

On the Algorand blockchain,there are trustless execution, risks and costs are reduced I a bid to allow instant settlement of the contracts. Removal of existing development barriers, most of the use cases are solved by Algorand with unprecedented speed, lower cost, and simplicity. There is a first release that takes a significant portion of the use cases of smart contracts and implements them in such a way that they can take advantage of the way the Algorand platform performs. There would be continual innovation in Algorand smart contracts in order to advance the capabilities of smart contracts.

Unique Functions

The contracts are fast, scalable, and are more secured and they are built directly into Algorand’s layer 1. Also with the minuscule transaction fees of Algorand, Algorand smart contracts are not expensive to execute. For accounts that are governed by Algorand smart contracts, the management of private keys is not required.

Great Use Cases

  • Execution of fees
  • HELOC
  • Exchanges that are decentralized
  • Debts that are collateralized
  • Escrow accounts

Generally, Algorand is a technology that increases the possibility of a world based on decentralization.

Elina is New York based writer and media consultant. Currently she is involved as an advisor in several ICOs. In addition to her professional interests, she loves jazz, modern art, coffee, and yoga.

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