What Is Algorand (ALGO)? A Plain-English Guide

Algorand is a proof-of-stake blockchain designed to settle transactions quickly, cheaply, and without forking. Its native token, ALGO, powers fees and secures the network. This guide explains what Algorand is in plain English, how it works under the hood, and how to think about it without the hype.

What is Algorand?

Algorand is a public blockchain — a shared, decentralised ledger — built to be fast and cheap to use. It was created by Silvio Micali, an MIT professor and Turing Award-winning cryptographer, and its main network launched in 2019. Like Ethereum, it can run smart contracts and host other tokens and apps, not just move its own coin.

The native token is called ALGO. You use it to pay transaction fees and to participate in securing the network. Unlike Bitcoin, which is secured by energy-intensive mining, Algorand is secured by staking — holders lock value to keep the network honest.

How Algorand works

Algorand uses a consensus design it calls pure proof-of-stake (PPoS). For each new block, the network randomly and secretly selects a small committee of ALGO holders to propose and vote on it. Because the selection is random and unpredictable, it is extremely hard to attack — and there is no special class of validators you must join.

• Pure proof-of-stake means every ALGO holder can take part in consensus, weighted by their stake.
• Fast finality — blocks finalise in seconds and, by design, the chain does not fork, so a confirmed transaction is final.
• Low, fixed fees — a standard transaction costs a tiny fraction of an ALGO.

Algorand also markets itself as carbon-neutral, because proof-of-stake uses a tiny fraction of the energy that proof-of-work mining does. For a deeper comparison of the two models, see what is staking.

What makes Algorand different

Many blockchains struggle with the so-called trilemma: being secure, decentralised and scalable all at once. Algorand's pitch is that its PPoS design tackles all three, which is why it is often used for payments, tokenised real-world assets and stablecoins.

ALGO has a maximum supply of 10 billion tokens, the bulk of which were created at launch and are released over time. That fixed cap is different from Bitcoin's 21 million, and the release schedule is worth understanding before you assume scarcity.

Where to go next

Now you know what Algorand is, the natural next steps are learning how to buy Algorand on a reputable exchange, then how to store Algorand safely in a wallet you control. If you want to put your coins to work, read Algorand staking explained.

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