Being able to handle massive transactions in the crypto world as more people are onboarded seems like a big problem that most projects have faced since the beginning of cryptocurrency. Big game players like bitcoin and Ethereum aren't excluded from this.
This has introduced some hassles when Using crypto as investors and traders deal with this slow transaction, speeds, insane gas fees, or even both.
It's almost impossible for users to turn their backs on these cryptocurrencies and blockchains as they offer certain unique advantages. For example, Bitcoin is the gold standard for digital assets, given its main power to store value through scarcity.
Ethereum, on the other hand, is a programmable blockchain that allows the creation of smart contracts and highly utilizable decentralized finance applications. However, developers have been seeking ways to combine the qualities of bitcoin and Ethereum with a touch of maximum scalability, and that's where Elrond comes in.
This tutorial will look at the Elrond blockchain, how it works, and what makes it unique. So let's get started!
What is Elrond?
Elrond is a blockchain-based platform. It was built for speed, security, and scalability. Elrond is a public blockchain network that offers all the good things a decent blockchain needs, including two key components, which are: Adaptive state sharding Secure proof-of-stake
Elrond's blockchain facilitates high-speed transactions and is a complete fintech, IoT, and Defi ecosystem. Developers can leverage this blockchain to build all kinds of dapps.
Elrond is trying to overcome the challenge of processing tons of transactions and linear scaling without losing speed; thus, they designed Elrond to have to capacity to run up to 10,000 transactions per second with minimum finality and gas fees. It means fast transactions at a low cost.
Another thing they are determined to do is to remove the use of centralized exchanges and trading platform to be the primary way that most people switch from one blockchain to another.
For a while, if you want to go from one blockchain to another, you'll have to sell your crypto asset to a centralized exchange like coinbase and then use the money from that sale to buy another crypto asset which you can then move elsewhere. Elrond aims to remove these steps using bridges and the Elrond virtual machine. Now let's move to how Elrond works.
How Elrond works
As mentioned earlier, Elrond utilizes an adaptive state sharding and secure proof-of-stake algorithm to provide scalability. The native coin of the Elrond network is called the eGLD.
Adaptive State Sharding: when it comes to their scaling, Elrond has taken a different approach to sharding technology which is pretty unique. They created a database optimization method that establishes itself as being one of the leading blockchain-driving solutions. Other blockchains that have sharding break up their network into a bunch of different pieces, each of which is many versions of the whole network.
Elrond's sharding implementation is driven by their desire to achieve some specific objectives. Here are some of the things Elrond hopes to accomplish:
Scalability without tampering with availability: This means that whenever there is a fluctuation in the number of existing shards, it should not affect updates or downtimes.
Instant dispatching and traceability: What we mean by this is allowing the network to know where everything is on the network at once and easily calculate some future kinds of stuff on the network.
To achieve complete adaptability and keep shards balanced consistently: They want the network to adapt well to what the users need.
Proof-of-stake mechanism
Elrond's secure proof-of-stake is an improvement to the regular proof-of-stake consensus mechanism. The secure proof of stake algorithm reduces latency which means it's quicker, and at the beginning of every round, the members in the consensus group are determined by each node in the shard. It means that it reduces the time of a consensus group selection. The network also has incorporated a weighted model of rating to support.
Metachain
The metachain is a protocol that is driven by a unique shard. It focuses less on transaction processing and accelerating communication between shards, triggering new epochs, rewarding stakers, storing and maintaining the validator's registry, and approving the block headers or processed shards. We mean the master shard in plain English, similar to the Ethereum blockchain.
Egld tokens
The EGLD token is Elrond's native currency. This is what allows the network to function. The EGLD currency serves several purposes on Elrond network. some of which are
- Pay for transactions
- Storage
- Validators reward
- Dapp development
- Smart contract execution.
Elrond's native token is called the egld. It was created to rival bitcoin. It has a limited supply of 20 million tokens. However, the EGLD coin is the unit of value that enables these activities.
A remarkable feature that Elrond has is that if you create a smart contract and a lot of people use that smart contract, 30% of the transaction fees associated with that smart contract goes straight to you, the developer meaning that you earn part of the transaction fees.
What's so special about Elrond?
According to Elrond's creators, the technology is to previous blockchains what broadband was to dial-up connections, allowing for significantly greater bandwidth to handle higher volumes of transactions and more demanding decentralized apps.
Elrond aspires to be a more consumer-friendly blockchain platform, as evidenced by its Maiar payments app, despite being primarily aimed at dapp developers.
How does Elrond compare with other cryptocurrencies?
The security of the Elrond blockchain and its associated vital components is a top priority for Elrond. The Proof of Stake network is fortified by large amounts of eGold and provides valuable services for both commercial and personal use. Is Elrond a good investment?
Elrond's fundamentals indicate that it has the potential to be a large crypto project due to its high transaction throughput and cooperation with other protocols. However, due to their volatile nature, cryptocurrencies are inherently dangerous, and the direction of any business can change overnight hence it is advisable to conduct your research before investing.
Conclusion
This article talked about what Elrond is, how it works, and what makes it unique. Elrond brings a novel approach to blockchain scalability, with unprecedented transaction speeds and throughput figures. It would be interesting to see how it progresses.