What is Algorand (ALGO)? Algo review

Algorand Background

Let us start with a little comeback. In 2015 Vitalik Buterin launched Ethereum, a home for many blockchains. Using the universal token ERC-20, every developer could launch an application based on Ethereum.  It opened a new stage in the crypto world development.

Ethereum became a home for many crypto projects, but with growth it faced the issue of scalability. Ethereum network uses proof-of-work protocol for transaction verification. It means with the network growth the transactions become slow. Besides, the P-o-W protocol is linked with high energy consumption and negative environmental impact.

Of course, Ethereum could not stay a sole network for crypto applications. Many companies decided to compete with Ethereum using the lessons from the pioneer network. Algorand is one of Ethereum competitors, a blockchain platform and a native cryptocurrency. It uses Proof-of-Stake protocol and has negative environmental impact. The experts consider ALGO as a good coin for portfolio.

What Is Algorand (ALGO)?

In 2017 a professor at MIT and well-known cryptographer Silvio Micali, founded his own blockchain platform with the digital currency, Algorand and ALGO. His main idea was to create a blockchain platform for quick transactions, like MasterCard or Visa, and unlike slow and energy consuming Ethereum.

Algorand can host other crypto projects. Correspondingly, it became a home for crypto projects and currencies, and became the direct competitor to Ethereum.

Key fact about Algorand:

• It functions as major payment processor
• Algorand uses Proof-of-Stake protocol
• ALGO is a native token for Algorand platform
• 7 billion ALGO are in circulation now, the total supply is $10 million
• Any fork or split on the Algorand blockchain is prohibited

How Does Algo Work?

As every platform that can host numerous crypto projects, Algo removes the barriers between the projects and strives to increase trust in the network.

ALgorand also compresses blockchain information to increase the transaction speed. As a result,

Also, Algorand immediately finalizes transactions within the network. It uses the modernized Pure Proof-of-Stake protocol – it means that the system uses the validators randomly within the pool to increase the security level.

Where to Store Algorand Coins?

You can store ALGO, or Algorand coins, in dozens of cold and hot wallets. One of them is MyALGOwallet, which is the best for browser access. Ledger, one of the most popular wallets in the world, is also compatible with ALGO coins. You can also use Trust Wallet or Atomic wallet. People from Algopulse – online media related to Algorand – recommend Pera Wallet.

Remember that ALGO holders, who keep their ALGO coins in wallets, get a reward every time a new block is added to the Algorand blockchain.

Algorand Pros and Cons

As each financial asset, ALGO coin has its pros and cons. While Pros are dominating for ALGO, this coin looks attractive for the investors. However, they also should be aware of the contras and weak places.

Algorand Pros

1.  Decentralized platform. As you know, all fiat currencies depend on many factors: national economy, central bank policy, market competition between the countries, and more. Also, fiat money is relatively easy to control by the government. Algorand as the decentralized financial system realizes the long-term dream about money without governmental control.
2. High technology. Global economy becomes more transparent, seamless, and digital, and it needs high-tech financial solutions to reduce trading and financial barriers between the countries and get the competitive benefit of the competitors.
3. Scalability. Ethereum faced the issue of low transaction speed with the growth. It uses Proof-of-Work protocol and it cannot scale without losing the transaction speed. That is why Ethereum plans to switch to Proof-of-Work protocol. At the same time, Algorand uses a modified version of Proof-of-Stake protocol, pure-Proof-of-Stake protocol. The average transaction time in Ethereum network is 14 seconds, for Algorand it is 4 seconds.
4. Science behind the project. Algorand cooperates with the world-known companies for the better algorithms in the project.
5. Environment protection. Many crypto currencies are harmful for the environment because of the huge energy consumption for mining and other transactions. ALGO has got the negative carbon footprint, it means that it pays a package to environment protection more than it consumes.

Algorand Cons

1. As each crypto currency, ALGO can demonstrate the price volatility. Sudden jumps up and down can be risky for short-term investors.
2. After the collapse of Terra platform, the future of algorithmic coins is unclear. Terra has many common features with Algorand: its price was defined by the complex algorithm, and it provided the services of financial transactions. When Terra collapsed in May 2022, investors stepped down from algocoins. It seems that currently, the algorithmic model cannot guarantee liquidity.

Does Algorand have a future?

As we mentioned above, the world needs decentralized payment systems badly. So, any project that offers DeFI solution, can live for years. Moreover, the PPOS protocol behind Algorand makes it a “green cryptocurrency”, secure, scalable, and fast. So, the ALGO coin has a good perspective for a long life and development.

From the other side, the recent collapse of Terra platform resulted in the growing skepticism among the investors towards algorithmic coins. Probably, the idea of the decentralized financial platform is not mature enough, so its future is vague and unclear.

FAQ

Is ALGO crypto a good investment?

Yes, ALGO is a good investment. This crypto currency has a great idea behind it. Quick transaction processing is in great demand in the crypto world. While the traditional payment systems like Visa or Mastercard can easily adjust to the growing number of clients, many blockchain platforms face the problem of slow transaction processing.

Waiting for hours until the transaction approval is inappropriate in the modern world. However, a proof-of-work protocol left not enough room for improvement. Algorand uses a proof-of-stake consensus protocol, so it can process transactions immediately. So, this project has a future.

Many experts even think it is currently undervalued. Now it is trading at $0.33-0.34, but it has a potential to grow. Some optimistic forecasts predict ALGO prices to grow ten times in five years.

Can ALGO be mined?

Algorand platform uses a proof-of-stake consensus mechanism. It means it uses validators (stakeholders) instead of miners. So, ALGO is rather validated than mined.

According to the initial plan, only 10 million ALGO coins will appear, while 7 millions are already in circulation.

Is ALGO legit?

Both Algorand and ALGO are legit. The legitimacy of trading and ownership for ALGO depends on the country, but in general ALGO is as legal as Bitcoin. It is also a promising and scalable technical project.

However, the investors should be careful and attentive. There is at least one fraudulent project that pretends to be a part of the ALGO ecosystem. We mean «Algorand ecology» that has no affiliation with the Algorand community. This project illegally uses Algorand name to win the trust of the investors, but it appears to be a scam.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.