Algorand is a decentralized blockchain technology network, with its native currency being known as ALGO.
The idea behind Algorand was to combine features of mainstream, well-established cryptocurrencies–such as decentralization, transactions without a central authority, easy-to-divide tokens–but with added speed and less computing power necessary to run the system.
One thing that makes Algorand distinctive is its use of “pure-proof-of-stake”. This is distinct from “proof of work,” where the blockchain is maintained through computers solving complicated math problems in order to generate new blocks and confirm transactions. This is roughly how Bitcoin mining works.
While cryptographically quite secure, this method requires a lot of computing power and energy use to work properly, according to environmentalists and proponents of alternative set-ups. The distinction between proof of work and proof of stake is one of the main dividing lines between cryptocurrency types.
With pure-proof-stake, transactions and new blocks can happen faster and more efficiently. Algo holders are randomly selected who then “validate and approve” each subsequent block in the chain. This group of users is randomly selected every time there’s a new block.
This process allows the Algorand blockchain to be global, decentralized, and secure, according to the network’s developers. The more Algo a user holds, the more likely they are to be selected to verify and validate new blocks and transactions. This process allows Algorand to approve and process transactions in seconds, as opposed to minutes with Bitcoin.