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You are here: Home / Archives for Algorand

Algorand

Algorand Becomes Official Chain For USDC After Stablecoin’s Launch On Mainnet

September 10, 2020 by Reena Shaw

Goldman Sachs-backed global fintech firm Circle announced the launch of its stablecoin USDC on Algorand’s mainnet. In collaboration with the Centre Consortium, the platform announced that Algorand is now an official blockchain for USDC.

Following this development, Algorand becomes the second major blockchain to have the two most popular stablecoins- Tether [USDT] and Circle’s USD-pegged stablecoin USD Coin [USDC] after Ethereum.

According to the official blog post, the Algorand implementation of USDC will allow on-chain transactions that provide nearly instant settlement finality [5 seconds], with a transaction throughput approaching 1000 tps and current average transaction fees of nearly 1/20th of a cent [USD]. Using public APIs, developers can also swap USDC across Ethereum and Algorand.

Commenting on the new launch, cryptography pioneer and Turing award winner Silvio Micali, Founder of Algorand, Inc stated,

“This is a defining milestone for frictionless mainstream payments as well as sophisticated financial applications. This launch brings together the convenience of USDC and an advanced protocol for global financial exchange in which Layer-1 smart contracts are as simple and secure as ordinary payments.”

Previously in June this year, Circle had partnered with the not-for-profit organization, Algorand Foundation to bring fiat-backed stablecoin capability to the Algorand blockchain, as part of the broader effort from Centre Consortium for the development of Multichain USDC.

skew main usdbacked stable coin contenders  market cap usd

Besides, over the past year, USDC has grown significantly making it one of the largest stablecoins in the world. Its market cap stood at $1.83 at the time of writing. Having the two most popular stablecoins is likely to attract more high-value stablecoins on Algorand. Additionally, this launch also opens doors for the foundation to get a boost from Circle’s extensive list of investors with industry giants, such as Bitmain, and Goldman Sachs.

While stating that the launch represents a significant improvement to the stablecoin’s scalability, improving its utility and making it a significantly more useful protocol for solving real-world financial problems, Alesia Haas, Chief Financial Officer at Coinbase also added,

“Expanding USDC from Ethereum to additional blockchains like Algorand will ensure USDC has the flexibility to support everything from emerging DeFi projects to large-scale financial institutions.”

Filed Under: Industry, News Tagged With: Algorand, Circle, USDC

Is an Economic Incentive the Only Way to Keep the Network Decentralized?

February 25, 2020 by Simran Alphonso

The economic incentive is the motivation a player gets to behave in a particular manner. With needs, wants and desires as the priority for the player, it works towards the preference set by the motivator for a particular incentive. 

As a contingent motivator economic incentives are classified in multiple forms. The top and the most relevant for the cryptospace being the extrinsic incentives – rewards for a particular behavior and punishment for another. 

This type of economic incentive runs on positive and negative reinforcement. 

Economics of incentivizing cryptocurrencies

Bitcoin’s incentive scheme depends on the presumption that individuals are sane players. If these players are rational, they are incentivized to participate in mining, buying and holding BTC. The concept of rationality is significant but often taken for granted.

Silvio Micali, an MIT professor and founder of Algorand says, that the creator of Bitcoin probably never imagined its incentive structure would cause capitalist industrial-scale mining pools. He even believes that the system does not need to reward trivial computations. Miners are compensated for their role while validators who don’t invest in overpriced equipment and excessive electricity are not.

With beliefs such as incentives should be the last resort, Micali is building Algorand. 

“Algorand’s logic is simple: it ties the security of the whole economy to the honesty of the majority of the economy, and makes it impossible for a small subset of the economy to control the fate of the whole economy.”

To give some background, Algorand is a public blockchain that works on a novel version of the Byzantine Agreement [BA]. Here, players are replaced in each round of communication. In this BA protocol, users do not keep any data except for their private keys, which allows Algorand to replace participants immediately after they send a message. 

Vitalik Buterin as the Founder of the second biggest cryptocurrency, Ethereum, believes that such a network wouldn’t work. 

Buterin stated that having no incentives at all means there’s no incentive for someone to not be lazy and go offline. While Micali from Algorand believes that all players on the network are honest, Vitalik’s belief is that the majority of the players are not; emphasizing the crypto phrase: verify, don’t trust. 

A fundamental insight at the heart of economics is that people respond to incentives

Under the assumptions that:

  1. Cryptography can be hacked 
  2. All players are honest
  3. Nevertheless, there will still be bad players and,
  4. Economic incentives significantly influence human behavior

Financial security becomes important!

The economic incentives drive humans to act in a particular way that makes them bet stakes [tokens, computational power, etc.] on the network to provide support for protocol stability with optimal security through a reward structure that prevents its unethical behavior.

Achieving all of this without an incentive model and keeping the network decentralized might be difficult or rather impossible.

All things considered, users are egotistically unpredictable in nature and they may decline to participate because of their concerns on electricity and data transmission consumption. This is why it is necessary that each user participating in the network receives a satisfying reward to compensate for their efforts. However, suitable incentive mechanisms that can meet the diverse requirements of users in dynamic and distributed peer-to-peer environments have yet not been invented. 

 

Disclaimer note: This article is based on the contributor’s opinions/research and does not necessarily represent the views and opinions of Tron Weekly.

 

Filed Under: Opinion, News Tagged With: Algorand, blockchain technology, Cryptocurrency, economic incentive, Ethereum (ETH), Vitalik Buterin, whole economy

Monerium and Algorand to Issue E-Money in New Partnership on Blockchain Protocol

January 22, 2020 by Tabassum Naiz

Algorand (ALGO), a blockchain startup that makes use of Proof-of-Stakes is going to do a partnership with Monerium to issue e-money for supporting the Algorand protocol, as announced by both platforms. 

Monerium, which received e-money license in June 2019 from Iceland, announced different Business 2 Business (B2B) e-money use cases. Among the use cases, includes cross border transaction of Euros. According to a press release, the company now supports e-money transactions out of European Union (EU), Iceland, Norway and Liechtenstein in different currencies including US Dollar (USD).

As tweeted by Monerium’s official Twitter account:

Monerium is pleased to announce partnership with @Algorand to support programmable & redeemable #emoney on Algorand protocol in 2020.https://t.co/9FaBSKKVSY#DeFi #FinTech #blockchain #FinTechNews #Algorand

— Monerium (@monerium) January 21, 2020

 

The company stated that through this partnership, Monerium will promote the mainstream adoption of e-money.

Reportedly, Algorand has gained a significant amount of money through investor interest last year. Moreover, In June 2019, the company accumulated more than $60 million in a token sale on CoinList, and in August, Bakkt Venture namely Investor 11 – 11 also provided the company with a $200 million capital fund focusing on Algorand protocol.

Besides Algorand 2.0 launched in November 2019, has brought a feature, Algorand Standard Asset (ASA). The feature includes the capability for the tokenization of any type of asset including both fungible assets like currencies and utility tokens, non-fungible assets such as tickets, restricted fungible assets like securities, and restricted non-fungible assets like licenses, and certifications. Among other features is Atomic Transfers focusing on the transfer of assets, and Algorand Smart Contracts (ASC1) which aims to create escrow accounts to crowdfunding.

In a statement, Sveinn Valfells, Co-founder and CEO of Monerium said Monerium looks at “supporting new blockchains with mainstream relevance as its priority”. 

“Algorand incorporates key features for many mainstream use-cases, including stateless smart contracts and scaleable proof-of-stake consensus.” added  Sveinn Valfells. 

 More so, echoing a similar concern, COO of Algorand also shared his views and said both firms coincide with their vision  “for real-world use cases that are enabled by advanced blockchain technology.”

“We are thrilled that Monerium will be bringing their solution for e-money to Algorand and we look forward to our community’s ability to leverage the technology for straightforward regulatory compliance,” he elaborated. 

Filed Under: News Tagged With: Algorand, Monerium

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