Introduction to $ALPH
Alephium is a modern layer 1 solution which claims to be scalable for developers with its new Proof-of-less-work algorithm.
Some unique selling points of $ALPH are :-
- Scalability through Sharding: Alephium utilizes a groundbreaking sharding algorithm known as BlockFlow, enhancing the scalability of the system. Built upon the UTXO model of BTC, it employs a DAG data structure to achieve consensus across various shards, enabling a remarkable throughput of up to 10,000 Transactions Per Second (TPS), surpassing Bitcoin’s 7 TPS by a significant margin.
- Programmable & Secure: Alephium introduces a stateful UTXO model, offering layer-1 scalability while maintaining the programmability level akin to the account model of ETH, all while ensuring enhanced security measures.
- Energy Efficiency with POLW: Powered by Proof of Less Work (POLW), Alephium integrates physical work and Coin economics to dynamically adjust block mining requirements. Under identical network conditions, Alephium consumes only ⅛ of the energy compared to Bitcoin.
- Enhanced On-Chain Structure with Custom VM (Alphred): Alephium introduces its proprietary VM, Alphred, addressing critical issues present in current dApps platforms. With notable enhancements in security, development experience, and the introduction of new paradigms such as trustless P2P smart contract transactions.
- Dedicated Programming Language for dApps: Ralph, Alephium’s bespoke programming language for dApps, bears similarity to Rust syntax, facilitating the creation of efficient and secure smart contracts, particularly tailored for Decentralized Finance (DeFi) applications.
The Tech Behind Alephium
PoLW > PoS
In the early stages of blockchain technology, a common inquiry revolves around the necessary infrastructure to support decentralized applications (dApps), including DeFi, over the next decade.
Alephium was conceived under the premise that a scalable blockchain boasting high throughput, low transaction fees, and a high level of programmability akin to Ethereum, coupled with the reliability and security reminiscent of Bitcoin, is imperative. The overarching objective was to develop a “scalable Bitcoin with a reliable smart contract solution.”
In accordance with the Lindy effect, despite recent strides in Proof of Stake (PoS), the Bitcoin model combined with sharding via Proof of Work (PoW) remains the most resilient and decentralized approach for constructing a scalable blockchain. Specifically:
- PoW is characterized by its simplicity, robustness, and facilitation of the design of sharding algorithms.
- PoS, while gaining traction, lacks the time-tested pedigree of PoW, and its trajectory post Ethereum’s transition to PoS is uncertain.
- PoS tends toward centralization and susceptibility to censorship.
- PoS has the propensity to diminish trustlessness due to the elevated costs associated with running a node.
- PoS is more susceptible to certain DeFi attacks, such as Miner Extractable Value (MEV).
In summary, Alephium’s foundation aligns with the enduring resilience and decentralization inherent in the amalgamation of the Bitcoin model and sharding via PoW, underscoring the significance of this approach in crafting a scalable blockchain infrastructure for the future.
Blocktime
Finality in Proof-of-Work (PoW) blockchains hinges on the accumulated work within new blocks, rather than the block time itself. This means that if a transaction necessitates N blocks with a block time of T for confirmation, then it would require 2N blocks for confirmation if the block time is halved to T/2, resulting in an equivalent confirmation time.
While shorter block times offer improved user experience, they also present certain drawbacks:
- Increased production of orphan blocks: Shorter block times escalate the rate of orphan blocks. For instance, the rate of uncle blocks on PoW Ethereum exceeds 10%, whereas Bitcoin’s orphan rate remains below 1%.
- Elevated overhead in the peer-to-peer (P2P) network: This issue is particularly pronounced in PoS blockchains, with reports indicating that up to 90% of transactions on Solana consist of validator messages.
To ensure the long-term viability of a lightweight and efficient chain, it is imperative to mitigate such overheads. Consequently, Alephium adopted a block time of 64 seconds, striking a balance between the conservative approach of Bitcoin and the swifter block times of newer blockchains.
For those prioritizing rapid block times and instant finality, Layer 2 solutions can be constructed atop Alephium. Additionally, the block time can be potentially reduced in the future as the blockchain matures or internet speeds improve. Ultimately, the cryptocurrency space necessitates a lightweight, scalable, and efficient Layer 1 infrastructure.
Tokenomics of $ALPH
The designated ticker symbol for the Alephium token is $ALPH, a vital element fostering decentralization and bolstering security within the blockchain ecosystem. Through incentivizing miners to process blocks on the Alephium blockchain, $ALPH plays a pivotal role in sustaining network integrity.
Mining serves as a foundational mechanism within the Alephium blockchain, facilitating the addition and authentication of transaction records across the network. Additionally, $ALPH fortifies the Alephium network against potential Distributed Denial of Service (DDoS) and spam attacks by virtue of transaction fees payable in $ALPH.
Tokenomics:
The maximum theoretical supply of $ALPH stands at 1 billion tokens. Approximately 86% of the maximum supply, equivalent to 860 million ALPH, will be mined over an estimated span of 82 years, commencing from the mainnet launch in 2021.
The remaining 140 million $ALPH, constituting 14% of the maximum supply, were minted alongside the genesis block to facilitate allocations for Ecosystem, Sales, Team, and Treasury purposes. These tokens undergo vesting over time, as detailed in the Genesis Allocation & Vesting Schedule section below.
Market Cap: $109M
Current Price: $1.23
ATH: $3.86
Price Action Q3 2024
Throughout Q3, the price of $ALPH has played inside this falling wedge with key support at $1.40
This price level has been the ATH level before 2024 and steady hold of this support is important in its long term price action
Final Words and conclusion
$ALPH has seen a lot of surge in price and investors from 2023 have really made a lot of gold in the past 6 months. Layer 1 technologies is a very competitive market and its not a given which of the projects will eventually win out. Alephium has performed admirably in the past one year but with L1 technologies, you always have to do your due research before investing in them.
To know more about the project, you can go and visit their website and for any other project reviews you can check out our blogs page.
