Meet the world's first carbon-negative blockchain

Published: Fri 19 Aug 2022, 11:28 AM

Last updated: Fri 19 Aug 2022, 11:30 AM

With the ability to transfer value peer to peer securely, transparently, and near-instantly without intermediaries, blockchain is arguably the most transformative technology of our time. Yet, with many popular chains like Bitcoin and Ethereum still relying on the energy-intensive proof of work (PoW) algorithm, the progress to economic freedom comes at a cost to our environment. Algorand, the world's first carbon-negative blockchain, presents a scalable and sustainable alternative that has already garnered a wide community and been adopted by leading organisations around the world including being selected as the official blockchain platform of FIFA.

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What is Algorand?

Pledging to be the greenest and most efficient blockchain, Algorand provides institutional-grade infrastructure that's capable of hosting a wide array of decentralised applications (dApps) and digital assets. In an era of growing global concern over the climate crisis, Algorand provides solutions that are both powerful and environmentally sustainable.

With increased attention paid to the energy usage of PoW blockchains like Bitcoin, many chains have sought to lower their carbon footprints by adopting more environmentally-friendly proof of stake (PoS) consensus mechanisms. However, most of these solutions sacrifice decentralisation.

Because the wealthiest validators in PoS (those that provide the most 'stake' to the network) have disproportionate control, governance ends up in the hands of just a few network participants. Algorand, however, utilises a unique algorithm called 'Pure Proof of Stake' (PPoS) that ensures that none of the three key elements of the blockchain trilemma — scalability, security, and decentralisation — are compromised.

How Does Algorand Work?

Algorand's PPoS algorithm prioritises fairness and decentralisation. Just like other PoS chains, users can become block validators on Algorand by staking its native $ALGO token. However, unlike other PoS chains, PPoS selects block validators randomly and anonymously, giving equal opportunities to all network participants regardless of their stake and ensuring that no group of validators gains more control than the rest.

PPoS also promotes decentralisation as the identity of the next block validator is unknown to other network participants. In this way, Algorand's unique approach to security relies on the honesty of the majority of network participants rather than a limited subset of a few.

As an open-source blockchain, anyone can build on Algorand, safe in the knowledge that their contributions aren't harming the environment. Every transaction is completed in four seconds, making this carbon-negative blockchain fast and scalable. Algorand is already home to a growing number of dApps and is developer friendly by design. Rather than having to learn a new programming language like Solidity to start building smart contracts, developers can build assets by using a language they're familiar with such as Java, JavaScript, Go, Python, or Rust.

Who Is Behind Algorand?

The Algorand blockchain was founded in 2017 by Silvio Micali, a professor of electrical engineering and computer science at MIT. With a background in cryptography and secure protocols, Micali is the co-inventor of pioneering technology such as Zero-Knowledge Proofs and Verifiable Random Functions, both widely used in cryptography today.

Besides founding Algorand, Micali has received multiple awards and recognition for his work including the Turing Award in computer science, the RSA prize in cryptography, and the Gödel Prize in theoretical computer science. He graduated from the University of Rome and holds a PhD in computer science from the University of California.

How Is Algorand Carbon Negative?

According to a recent estimate, PoS chains are ~2000x more energy-efficient than PoW chains, making their contribution to carbon emissions negligible. However, Algorand takes its commitment to be green even further as the world's first carbon-negative chain. In April 2022, Algorand announced that it would offset all its carbon emissions by implementing the first smart contract to automate the process. A percentage of all transaction fees on Algorand now goes toward carbon offsets.

Algorand has also partnered with ClimateTrade, a blockchain marketplace for CO2 carbon offsetting, to further help maintain a carbon-negative network.

The Algorand (ALGO) Token

ALGO is the native currency of the Algorand blockchain and is used to pay for transaction fees on the network as well as reward network stakers and validators. As the Algorand network runs on a variation of PoS, there is no energy-intensive mining. Any user can become a validator by staking their ALGO tokens. The ALGO token has a maximum supply of 10 billion.

What Other Problems Does Algorand Solve?

Beyond a deep commitment to sustainable technology, Algorand is fast. Transactions settle in under four seconds, regardless of on-chain volume, and cost just fractions of a penny. With the well-documented scalability issues of Layer-1 chains like Ethereum that cause lengthy wait times and sky-high transaction fees, this is music to the ears of both end-users and dApp developers who often find themselves priced out of Defi trades or NFT transactions.

Algorand's strength of vision, ease of use, and agility led to its selection by FIFA as the International Federation of Football Association's official blockchain platform. Algorand will be a FIFA World Cup Qatar 2022™ Regional Supporter in North America and Europe, and a FIFA Women’s World Cup Australia and New Zealand 2023™ Official Sponsor, as well as helping the association develop its digital assets strategy.

Final Thoughts

With one of the most widely recognised contributors to modern cryptography as its founder and a highly accessible, scalable, and efficient network that's being adopted by some of the world's largest names, Algorand is rapidly gaining traction. For founders, builders, investors, and strategists passionate about bettering the world's financial future — while ensuring the preservation of its climate — Algorand makes a compelling choice.

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