There will be more than seven billion smartphone subscribers by 2025 but there is currently less than 0.1 billion cryptocurrency users. According to the Celo Foundation, useability and price stability remain two of the main inhibitors of cryptocurrency adoption. Celo’s mobile-first approach aims to bridge this gap.
Key technology innovations to drive adoption include:
Fast & light transactions (block headers optimized for fast mobile phone synchronization).
The ability to send currency to phone numbers (lightweight identity protocol that maps hashes of phones numbers to public keys– making it easier for anyone with a mobile phone to send and receive digital currencies to anyone in the world)
Automatic deduction of transaction fees and the option to pay gas (as low as $0.01) in stable currencies.
Stable coins, starting with cUSD, backed by a decentralized reserve to help provide stability, transparency, and auditability.
Celo was founded in 2017.
CELO owners can use their holdings to pay network transaction fees, known as gas payments or gas fees. The Celo protocol establishes a gas price minimum that applies to all transactions or contract executions. The market for discovering this gas price follows the logic presented in EIP-1559, an Ethereum improvement proposal designed to enhance the gas fee market.
Part of this gas fee, known as the base, will go to Celo’s on-chain Community Fund, which helps provide funding for the general upkeep of the Celo platform. The validator that proposes the block receives any fee amounts above the base fee, known as the tip.
Celo Gas Pricing
CELO holders also use their assets to vote on governance proposals, which represent upgrades to the Celo protocol or modifications to the reserve target asset allocation.
Proof of Stake consensus
Celo uses a Proof of Stake consensus algorithm. In comparison to Proof of Work systems like Bitcoin and Ethereum, it aims to limit negative environmental impact and computational effort required by validators to reach consensus, which could translate to faster transaction speeds.
The protocol also offers incentives for running full nodes to service the light clients that run on each mobile device. In Celo, users can still earn inflation rewards in exchange for providing compute resources without having to stake funds.
Celo’s Proof of Stake mechanism
Celo Foundation Voting Policy
Hardware requirements for a Celo Validator
The recommended Celo Validator setup involves continually running three instances:
1 Validator node: should be deployed to single-tenant hardware in a secure, high availability data center
1 Validator Proxy node: can be a VM or container in a multi-tenant environment (e.g. a public cloud), but requires high availability
1 Attestation node: can be a VM or container in a multi-tenant environment (e.g. a public cloud), and has moderate availability requirements
Celo is a Proof of Stake network, which has different hardware requirements than a Proof of Work network. PoS consensus is less CPU intensive but is more sensitive to network connectivity and latency. Below is a list of standard requirements for running Validator and Proxy nodes on the Celo Network: Memory:
8 GB RAM
CPU: Quad core 3GHz (64-bit)
Disk: 256 GB of SSD storage, plus a secondary HDD desirable
Running a Celo Validator
The Celo protocol is an open, distributed cryptographic protocol that allows applications to make transactions with and perform computation on a family of cryptocurrencies, including ones pegged to ‘fiat’ currencies like the US Dollar. The Celo Wallet app, once released, will allow end-users to manage accounts and make payments securely and simply by taking advantage of the innovations in the Celo protocol.
Some technological features of the network include:
Stable Value Currencies: Celo includes native support for multiple ERC20-like stable currencies pegged to ‘fiat’ currencies like the US dollar.
Accounts Linked to Phone Numbers: Celo maintains a secure decentralized mapping of phone numbers that allow wallet users to send and receive payments with their existing contacts.
Transaction Fees in Any Currency: Users can pay transaction fees in stable currencies so that they do not need to manage balances of different currencies.
Immediate Syncing Even on Slow Connections: Celo is designed to support wallet users with high latency, low bandwidth, or high-cost data tariffs. Celo removes the need to check every header before a received header can be trusted. The network also uses BLS signature aggregation and succinct zero-knowledge proofs, via zk-SNARKs, to help improve performance.
Programmable (Full EVM Compatibility): Celo includes a programmable smart contract platform that is compatible with the Ethereum Virtual Machine (EVM), which is already widely adopted, familiar to developers, and has strong tool support.
Self Custody: Users have access to and full control of their funds and account keys, and don’t need to depend on third parties to make payments.