Is Algo Coin a Halal Investment or Haram???
Guide to Algorand:
The Algorand platform and cryptocurrency was founded in 2017 by a professor at Massachusetts Institute of Technology and he is also a noted cryptographer. Algorand is an open source blockchain platform and a digital currency which is designed to process various transactions quickly. Anyone can view and contribute to the platform’s code. Pure Proof-of-stake (PPOS) protocol is used by Algorand which is a highly democratized Proof-of-stake mechanism. The Algorand platforms superfamily transaction at an incredible rate of 1300 transactions per second (TPS) which is expected to go up to 3000 TPS.
Pure Proof-of-stake (PPOS):
This is a unique modification to Proof-of-stake mechanism which gives the benefit of minimum staking for participating and securing the network. Only 1 Algo Coin is required where as in Ethereum, a minimum of 32 ETH are needed. PPOS mechanisms have two phase block production process which are proposing and voting. By staking ALGO any member can participate in the proposing and voting method. The voting method consists of three steps which are:
- Block proposal: In this step the validating candidate are selected.
- Soft Vote: If the selection of the validator is confirmed, then the account receives a weighted Vote according to the Algo number it holds.
- Certify Vote: The block proposal which resulted from soft voting is verified and certified by a new committee.
Algorand’s Native Currency:
The cornerstone of its network structure is the native token of Algorand platform i.e. Algo. In the unique protocol design, the rewards paid in return for producing blocks are divided among Algo Coin holders instead of being rewarded to the block producer only. Due to this 7.5% annual percentage yield (APY) can be earned by the ALGO coin holders. The reward is given in about every 10 minutes to encourage more users to join the Algorand staking platform and accelerate the decentralisation path.
The decentralisation of ALGO token is a computational process. The Algorand foundation has a large amount of ALGO at the moment which according to the critics makes the protocol centralised.
Features of ALGO Cryptocurrency:
The unique features of Algorand benefits the Algo Coin making it one of the powerful and trustworthy cryptocurrency in the market today. These features are:
- Speed: This coin can be transferred to anyone’s walled with an unbelievable speed of 4.5 seconds. You don’t have to check back for your payments instead or hours later as instant confirmation or notification will be received about the payment.
- Scale: The Algorand blockchain maintains set starts as it is built for billions of users with means that no matter how many people are using Algo, the payment will still take place in less than 4.5 seconds. There will be no slowing down of system or any sort of confusion.
- Trustworthy: Forking is a major problem which occurs in many blockchain networks when it splits into more than 1 chain. When this happens, your payments can be at risk. The key feature of Algorand is that its structure is built in such a way that guarantees not to fork. So you can be sure that your Algo are in safe hands.
- Transparent: On June 19th 2019, a total number of 10 billion was created at the launch of Algorand blockchain. Public Algorand platform can be checked at any time by anybody to see how many Algo are in use.
- Secure: Algorand blockchain uses the most advanced cryptography which is unbreakable digital codes to make sure that all the payment in your Algo wallet remains that way.
Algorand Permissible in Islam:
Algorand achieve the Shariah certificate and allows the Muslim investors to enter the digital market. The certificate was provided by Bahrain Shariah Review Bureau and it states that Algorand platform sticks to the tenants of Islamic laws. With this Shariah certificate, Algorand platform can be used for economic exchange by Islamic institutions.
Yasser S. Dahlawi:
According to Yasser S. Dahlawi who is the founder and CEO of Shariah Review Bureau (SRB), “ We are thrilled by technical achievement of the Algorand blockchain and a future of truly scalable and secure blockchain that will serve as a platform for Islamic financial markets to enter the newly emerging borderless economy”. He also stated, “We stand ready to support the future ambitions of the users of Algorand in the Islamic financial market.”
Although there are some interest-bearing activities on the Algorand blockchain but these activities are not essential for the functionality of the platform. Being a decentralised finance system the smart contract capabilities are also not Haram. So, this currency is rated as Halal in Islam and it is comfortable to invest Algo Coin from a Halal perspective.