What is cryptocurrency Elrond (EGLD) and how does it work?

What is Elrond (EGLD)?

Elrond is a blockchain-based platform that allows users to create and develop decentralized applications and cryptocurrencies to create a new internet economy. The project aims to resolve the burning problem of traffic congestion on blockchain networks by offering solutions for scalability. Elrond offers fast transactions and a scalable environment for developers, enterprises, and users, alongside a user-friendly experience and low transaction fees.

The network can reportedly achieve up to 15,000 transactions per second, which makes it one of the fastest blockchain networks on the market. The native token is known as eGold, with the ticker EGLD, and is a multi-purpose cryptocurrency. EGLD is used for staking, voting, and transacting on the network. It is the central asset in the incentivization system that rewards network participants. Elrond also has a latency of six seconds, can scale with sharding, and offers attractive transaction fees of $0.001.

Essentially, Elrond is a software based on blockchain that rewards network participants whose computational power supports the system of smart contracts which devs can use to create decentralized applications and assets.

How Does Elrond Work?

Elrond is an elaborate software for Dapp creation and the development of digital assets supported by smart contracts. To scale the environment for developers and users, Elrond uses Adaptive State Sharding, which is a function that splits the network’s infrastructure to support the increasing number of applications and transactions on the ledger.

Elrond uses the Secure Proof of Stake consensus mechanism, which is a variation of the traditional PoS protocol to ensure that all separate partitions of the network split by sharding are connected into a functional platform on the ledger. Developers can use Elrond Integrated Development Environment to create decentralized applications that mimic products and services.

Users can run smart contracts with several programming languages, including C, C++, and Rust, and can also build decentralized applications with the same set of languages. Nodes run the network to support transactions and secure the platform. Sharding is performed by splitting the network into smaller fractions so nodes can resolve fractions of transactions, one by one to prevent congestion and enable scaling.

The Secure Proof of Stake consensus mechanism synchronizes the nodes running the network to connect all the fractions that are separated by sharding. Thanks to sharding, Elrond can process a minimum of 12,500 transactions per second.

Who Are the Founders of Elrond? (History of Elrond)

Elrond was created and launched in 2017 by Lucian Todea and Beniamin and Lucian Mincu. The Mincu brothers also co-founded initial coin offering information aggregator ICO Market Data and digital asset investment fund MetaChain Capital. The Elrond team organized a private investment round that brought nearly $2 million to the project.

In July 2019, Elrond held an ICO that raised over $3.2 million by selling 25% of its total supply. Initially, Elrond traded under the ticker ERD, while the ticker changed to EGLD (eGold) once the mainnet was released.

What Makes Elrond Unique?

Elrond is unique through its use of sharding in the form of Adaptive State Sharding, which splits the network into smaller fractions so that nodes can validate transactions and network operations by resolving one partition at a time. This ensures that the network can process thousands of transactions per second while only requiring low fees.

The Elrond project aims to create a new digital economy where decentralization and scalability are integral characteristics of its blockchain infrastructure. Elrond allows users to create new assets, decentralized applications, and make transactions at low cost. The project is also unique as it supports enterprise-grade Dapps while enabling scaling and offering three programming languages to work with.

What Gives Elrond Value?

Elrond draws its value from its technical potential, the technology behind the project, its ability to scale, its offering of enterprise-grade solutions for Dapps and digital assets, and its use cases in general. All these elements determine the intrinsic value of Elrond as a project. The intrinsic value often doesn’t match the value of EGLD in the market, which is why EGLD can be often overbought or underbought.

The market value of Elrond is expressed through its changing market price which is susceptible to frequent changes and trend reversals. The market value of Elrond is affected by volatility and is also defined by a multitude of specific factors that can push the price up or pull it down. Ultimately, Elrond is as valuable as its level of usage, so the number of active users can also indicate how valuable Elrond is as a blockchain project with a special utility.

How Many Elrond (EGLD) Coins Are There in Circulation?

There are currently EGLD in circulation. Elrond was launched with a supply cap of 31,415,926 tokens, which the circulating supply tends towards through a gradually decreasing inflation rate that provides staking rewards for the first ten years of the project. However, fees are also used to provide staking rewards and as the sum of fees increases, inflation decreases, with inflation reaching zero if the amount of fees generated exceeds the minimum guaranteed rewards. This creates the premise for a transition to a deflationary monetary system.

The number of EGLD coins in circulation multiplied by the current price of EGLD equals the market cap. The market cap defines the rank of EGLD in comparison with other cryptocurrencies and also determines its market share and dominance.

Other Technical Data

Before settling transactions on the main chain, Elrond’s Adaptive State Sharding employs a third of existing nodes to validate these transactions. Every 24 hours, nodes are reshuffled to new shards in a continuous process that prevents validators from colluding as they are changing shards. Instead of operating within a single chain, Elrond splits the network in shards, which are governed by the Secure Proof of Stake protocol.

Validators operate by checking the block producers to make sure that everything is in order and that all transactions are legit. After the blocks are validated, validators synchronize with other shards across the network. Once the shards are synchronized with validators, the settlement of transactions is completed in bulk. Network participants are then rewarded with EGLD and incentivized to help secure the network and validate transactions.

Elrond EGLD

Buy

Bitcoin BTC

Buy

Ethereum ETH

Buy

XRP XRP

Buy

How is the Elrond Network Secured?

The Elrond network is secured through the process of staking which is supported by the Secure Proof of Stake consensus mechanism. All nodes need to stake EGLD in order to secure the network within the validation process in which nodes act as validators.

Validators secure the network through the SPoS consensus mechanism by synchronizing with shards and checking block producers. All transactions on the network are first validated before bulk settlement to secure the network and prevent double-spending. To ensure trust, validators are randomly selected and are shuffled between shards to prevent collusion. Validators are rated by their activity and if their score is too low, a validator may lose their role and will need to pay fines.

How to Use Elrond

The Elrond network can be used for super-fast transactions with the native token EGLD thanks to its capacity of up to 15,000 transactions per second. The Elrond platform is also used for Dapp development with the main goal to create a new internet economy with an ecosystem of cryptocurrencies and decentralized applications.

EGLD, the native token known as eGold, can be used for staking in the governance of the network, to cover transaction fees, and as the main payment method. EGLD can also be traded in the market of cryptocurrencies for a profit based on the difference between the buying and selling price. The main advantage of Elrond as a project is its ability to scale and offer flexibility to developers and users while facilitating high transaction speeds.

How to Choose an Elrond Wallet?

You can safely store your eGold tokens in any of the available mainnet wallets, such as the Elrond Wallet, which comes with a hundred times lower transaction fees and full custody over your funds. Maiar is another of the official eGold wallets, supported by the Elrond blockchain. You can register your phone number with the wallet app so you can easily access your funds and activate a wallet account. You can use a passphrase to recover access in case you lose your wallet. You can also use the Frontier wallet for EGLD in combination with the Elrond app to activate the service.

There are plenty of other places you could store your EGLD and the wallet you choose will likely depend on what you want to use it for and how much you need to store.

Hardware wallets or cold wallets like Ledger or Trezor provide the most secure option for storing cryptocurrencies with offline storage and backup. However, they can require more technical knowledge and are a more expensive option. As such, they may be better suited to storing larger amounts of EGLD for more experienced users.

Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of EGLD or more novice users.

Online wallets or web wallets are also free and easy to use, and accessible from multiple devices using a web browser. They are, however, considered hot wallets and can be less secure than hardware or software alternatives. As you are likely trusting the platform to manage your EGLD, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts of cryptocurrencies or for those making more frequent trades.

Kriptomat offers a secure storage solution, allowing you to both store and trade your EGLD tokens without hassle. Storing your EGLD with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Buying and selling EGLD, or trading it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Elrond Proof of Stake

The Elrond blockchain uses a variation of the PoS protocol called Secure Proof of Stake.

The network depends on a system of nodes and validators that need to stake EGLD to participate in the network. The Proof of Stake protocol has proven to be a more cost-effective and efficient protocol than more traditional choices such as Proof of Work, which is how Elrond achieves top security and high transaction speeds in combination with sharding.

Conclusion

Elrond promotes scaling and high transaction speeds as the main sources of the project’s intrinsic value, with the network reportedly capable of processing up to 15,000 transactions in one second. High transaction speeds, scalability, decentralization, and full custody over users’ funds are elements that make Elrond a highly functional ecosystem.

As the project continues to develop, Elrond aims to become a model of the new internet economy. The project offers competitive transaction speeds and tools for Dapp development and deployment of applications for public and enterprise-grade use cases.

Join the crypto revolution and start your Elrond journey today!

Elrond FAQ

What type of nodes operate on the Elrond network and what do they earn?

Validator nodes participate in the consensus mechanism to process transactions and earn rewards. They must stake at least 2,500 EGLD as collateral and as of August 2021, the yearly return for validators is 21.45%. Users can also participate in the network without staking EGLD or earning rewards as observers. These are passive members of the network who can act as a read and relay interface. Finally, a fisherman is a node that verifies the validity of blocks after they have been proposed. Observers or validators who are not part of the current consensus round can fill the fisherman role in return for rewards.

What kind of projects make up the Elrond ecosystem?

The Elrond ecosystem incorporates well over 100 projects including stablecoins, wallets, validators, and payment providers. Elrond is also integrated with decentralized finance projects such as Orion and Reef, while other projects building on the blockchain include UTU and ARPA.

How to buy Elrond?

Buying EGLD is as easy as visiting Kriptomat’s how to buy Elrond page and choosing your preferred method of payment.

How to sell Elrond?

If you already own EGLD and hold it in a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Elrond Price

Elrond price is subject to frequent price changes that are mostly driven by the volatility of the cryptocurrency market. The price of EGLD can also be affected by a great number of factors that can influence the market value of Elrond. You can keep up with live EGLD prices on Kriptomat.

As well as traditional factors such as market sentiment, the flow of assets on exchanges, and the economy in general, the price of EGLD is also influenced by the amount of tokens being staked and the balance between protocol fees and inflation used to pay staking rewards.

The current Elrond price is EUR.

The 24-hour trading volume of EGLD is EUR. EGLD is currently ranked of all cryptocurrencies by total market capitalization, with a market cap of EUR. It has a circulating supply of EGLD.

Register now to begin your journey into the world of Elrond and cryptocurrencies with with Kriptomat!

If you’re experiencing any issues or have any questions at all, please don’t hesitate to reach our Customer Support Team. We’re always here to help!