Elrond is a project that has recently received a lot of attention. They are focused on scalability, as have many other efforts before them. In less than four months, the value of its ERD cryptocurrency has increased by more than 5,000 percent! Between mid-March to the introduction of the Elrond mainnet in July 2020, that was in early 2020.
One of the most important challenges facing some of today’s largest blockchains is scaling and throughput. We’ve all experienced blockchain bloat and the associated inconveniences of low throughput and sluggish transactions.
Is Elrond, though, worth it in the face of so many other options? Can we justify the massive price increase that has occurred as a result of the Elrond blockchain’s official mainnet launch? Given that the token resumed its ascent high after a brief period of profit-taking, it appears to be justified to Elrond investors.
We’ll tell you all you need to know about Elrond in this Elrond review.
What is Elrond?
Elrond is a blockchain-based platform that allows users to build decentralized applications and coins in order to create a new internet economy. The project attempts to alleviate the problem of blockchain network traffic congestion by providing scalability solutions. Elrond provides developers, organizations, and individuals with a scalable environment, as well as a user-friendly experience and minimal transaction fees.
The network can process up to 16,000 transactions per second, making it one of the quickest blockchain networks available. The native token, eGold (EGLD), is a multi-purpose cryptocurrency with the ticker EGLD. On the network, EGLD is utilized for staking, voting, and transacting. It is the most important asset in the network participants’ incentivization mechanism. Elrond also has a six-second latency, can scale through sharding, and has low transaction fees.
Elrond is a blockchain-based software that compensates network participants whose processing power helps to fuel a smart contract system that developers may use to build decentralized applications and assets.
How does Elrond works?
Elrond’s aim is to increase throughput, or the number of transactions per second throughout the entire network, using a scaling technique called Adaptive State Sharding. It also introduces a new consensus method known as Secure Proof of Stake (SPoS).
To fully comprehend Elrond, you must first grasp these two technologies, as well as how they differ from current sharding and consensus approaches and why those distinctions are critical for scalability.
The best method for blockchain sharding must take into account the benefits of all three types of sharding:
- State sharding – When the network’s “state” or history is split between different “shards” or pieces of the network. Each shard has its own history/ledger, and nodes (computers connected to the network) only need to keep track of the state of the shard they’re in, drastically lowering the amount of latent storage capacity required.
- Transaction sharding – According to criteria like the sender’s address, transactions are mapped to shards for processing and each shard processes transactions in parallel with other shards. Each node maintains a record of the network’s current status.
- Network sharding – Handles how nodes are organized into shards and can improve communication by sending messages to nodes in a shard rather than the entire network.
Adaptive state sharding solves the scalability problem by enhancing network performance and efficiency by improving communication within shards. It accomplishes this by merging all three types of sharding into a single solution that allows parallel processing at all levels.
Elrond’s network is divided into shards, which are utilized to scale the network. Each shard is responsible for a portion of the state (accounts, smart contracts, blockchain) and transaction processing, allowing each shard to execute only a fraction of the transactions concurrently with other shards.
Secure Proof of Stake Consensus (SPoS)
Elrond’s SPoS consensus process was created to improve upon previous Proof of Stake systems. It lowers network latency and lets every node in the shard choose which members will be in the consensus group at the start of each round.
The aggregated signature from the previous block provides randomization. According to the Elrond team, this cuts the time it takes to elect a consensus group to under 100 milliseconds. There is also a weighting mechanism that promotes meritocracy among nodes while also taking stakes into account. Elrond also introduces the Bellare and Neven multi-signature method, which was created to minimize the number of communication cycles required in the signing procedure.
It tries to assure fair shard distribution as a more complex variant of Proof of Stake, and it is a compromise between higher energy and computing needs and security.
Elrond team
Benjamin Mincu, the project’s CEO, began his blockchain career as a member of the NEM core team for 1.5 years. He oversaw the efforts to establish NEM as a global blockchain product, including marketing, commercial development, and community growth.
Lucian Mincu, the CIO at Elrond, is an engineer with eight years of expertise in creating complicated infrastructure and network solutions for clients including the German government.
Lucian Todea, the COO of Elrond, is a successful entrepreneur with over 15 years of experience investing in technology and is engaged in both the startup and blockchain spaces.
The entire team consists of 24 technological and business specialists, all of which bring to the Elrond Network project a wealth of experience, abilities, and talents. Elrond has an additional seven advisors who provide even more technical expertise to the project.
Elrond Use Cases
Elrond is designed to enable non-fungible tokens (NFTs) and includes a Smart Accounts NFT architecture. Smart Accounts operate in the same way as other blockchain accounts, but with the added benefit of storing key-value data at the account level. Users can save a large amount of data in their Elrond Network account, such as emails, bitcoin addresses, private identification data, health data, proof of citizenship, KYC information, and more. Furthermore, Smart Accounts are meant to store and prove ownership of digital assets without requiring the usage of the Elrond VM, resulting in reduced bloating in the smart contracts that manage user funds.
Elrond is developing Elrond Standard Digital Tokens (ESDTs), which are tokenized stablecoins, synthetic assets, and fiat currencies that run on the Elrond Network but don’t require smart contract capability. Elrond’s scalability and speed also prepare the network for the Internet of Things functionality (IoT).
Pros and Cons
| PROS | CONS |
|---|---|
| Scalability is up to 1000 times that of Ethereum. | Interoperability between chains is not yet achievable. |
| To boost scalability, it employs advanced sharding technologies. | |
| Transactions are processed at a faster rate than on other platforms. | |
| Selecting validators in a more advanced manner increases network security. | |
| One of the development team’s objectives is to create a DApp ecosystem. | |
| Elrond’s team is made up of individuals with both entrepreneurial and technological backgrounds. | |
| A huge and dedicated community |
Transaction Fees
| TYPE OF FEES | INFORMATION |
|---|---|
| Minimum fee for staking | 2500 eGLD |
| Transaction fees for staking, per node | 0.006 eGLD |
| Transaction fee (average) | ZAR 0.014 |
Closing thoughts
Businesses are interested in using blockchain networks as a business solution need platforms that can meet their most pressing requirements. Elrond Network is a blockchain protocol that is efficient, scalable, developer-friendly, and cost-effective, and it may be able to solve many of the needs of large-scale businesses. Elrond is delivering solutions for data sharing, IoT, financial services, and much more, with a growing list of enterprise blockchain clients throughout the world, demonstrating that user adoption of the Elrond Network is growing stronger.