Top 6 Reasons Why to Invest in Algorand
In this article we'll go through the top 6 reasons why you should invest in Algorand (ALGO). This is a short list that is meant to be shared among friends and family who might be interested in, or already are involved in, the world of cryptocurrencies. It can be seen as a quick introduction to why Algorand might be the most worthwhile investment among cryptocurrencies to date.
If you have ready my previous articles, you know that AlgoDaddy's favorite crypto is ALGO. That being said, it's hard to come by any other cryptocurrency with as strong fundamentals as Algorand. I did my due diligence before investing, and later on I was convinced enough by the projects superiority that even started writing this blog. Nevertheless, I did have to read a lot to really understand why it was so good. So here I have compiled a list of the top 6 reasons to invest in Algorand. Enjoy!
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- Educated and Capable Team
It's no secret that one of the main factors of success of a project is the founders and team behind it. Nonetheless Algorand currently have one of the strongest teams behind itself out of any cryptocurrency.
Algorand was founded in 2017 by MIT professor Silvio Micali. He has a PhD in Computer Science from Berkley and is currently teaching and researching at MIT. His research covers cryptography, pseudorandom generation, secure protocols, and more.
In addition, the majority of the Algorand team are highly educated and well-versed in the world of computer science and other contemporary fields. For example, Algorands Chief of Cryptography, Chris Peikert, holds a PhD from MIT. The COO of Algorand, W. Sean Ford, holds a master's from Harvard. The list goes on. It's very securing, to say the least.
- Algorand has Solved the Blockchain Trilemma
The Blockchain Trilemma was thought to be a dogma in the cryptocurrency community, and the term was coined by the founder of the much-popular cryptocurrency Ethereum (ETH), Vitalik Buterin. It refers to a problem where you can't achieve both speed, scalability and decentralization without sacrificing one of the aspects.
Nevertheless, has Algorand managed to achieve all these 3 points through it's ground-breaking technology, inherently solving the blockchain trilemma. Algorand is fast, decentralized, scalable AND secure - much thanks to its "Pure Proof-of-Stake" concept. This is how the Algorand Foundation explains it:
"Each user's influence on the choice of a new block is proportional to its stake (number of tokens) in the system. Users are randomly and secretly selected to propose blocks and vote on block proposals. All online users have the chance to be selected to propose and vote." - Source
- Smart Contracts, Assets, and a Growing Ecosystem
The Smart Contracts function of Algorand is one the main pillars of its success and usability. It allows secure transfers and contracts to be made, without any middleman cutting into potential profits or charging high fees.
Algorand Standard Assets (ASAs) allows for anyone to easily create tokens on the Algorand platform, harnessing the same positive aspects of Algorand itself (high speed, security, cheap transactions). Developers can also implement their own smart contracts into their token, essentially allowing for a wide range of different use cases, read up on Yieldly or Tinyman as the main examples of this.
This have allowed for the Algorand ecosystem to vastly expand in a short amount of time, and the growth shows no sight of stopping any time soon.
- It's a Candidate for Central Bank Digital Currencies (CBDC)
Thanks to point 2 and 3 (solving the blockchain trilemma, being secure, and allowing for smart contracts) it's the perfect candidate in acting as a platform for Central Bank Digital Currency (CBDC). Central banks around the world are currently in progress of launching their own digital currencies. For example, the European Union are planning the "Digital Euro", while countries such as El Salvador are already in talks with Algorand to launch their CBDC using its platform.
Considering the amount of capital, a CBDC project involves, it's easy to understand why these sorts of co-operations are of huge importance for any cryptocurrency, and to keep in mind if you consider investing in a given crypto.
- Algorand has a Growing NFT market
With the ever-increasing importance of NFT's (Non-Fungible Tokens) and its markets a blockchain without NFTs simply cannot be competitive in this day and age. The news of Facebooks Metaverse supporting NFTs have spurred the market even further.
The Algorand protocol allows for cheap and fast minting of NFTs, unlike for example Ethereum where transaction fees can be almost cosmic. This puts Algorand in a great position to further expand as an option for NFT trading. In fact, the world-leading art and luxury auction business Christie's recently held an NFT auction powered by Algorand. Christie's reported global sales of $4.4 billion dollars in 2020.
- Algorand is Fast, Cheap, and Easy to Use
It's of absolute essence that a cryptocurrency is easy to use in order to allow for mass adoption and mainstream use. Here's another point where Algorand really shines! Algorand has one of the most user-friendly wallets - the Pera Algo Wallet. In addition to its ease-of-use it allows you to participate in the whole blockchain ecosystem, with everything from signing smart contracts, connecting to the governance program, and of course making transactions.
Algorands transaction speed is approximately 5 seconds (compared to Litecoins 2.5 minutes, or Bitcoins 10-minute average transaction time) and the transaction fee is fixed at 0.001 ALGO (or roughly 0.0017 USD at the time of publishing this post). Few cryptocurrencies come close to these sort of numbers, especially while remaining scalable for wider adoption.
It's no secret that one of the main factors of success of a project is the founders and team behind it. Nonetheless Algorand currently have one of the strongest teams behind itself out of any cryptocurrency.
Algorand was founded in 2017 by MIT professor Silvio Micali. He has a PhD in Computer Science from Berkley and is currently teaching and researching at MIT. His research covers cryptography, pseudorandom generation, secure protocols, and more.
In addition, the majority of the Algorand team are highly educated and well-versed in the world of computer science and other contemporary fields. For example, Algorands Chief of Cryptography, Chris Peikert, holds a PhD from MIT. The COO of Algorand, W. Sean Ford, holds a master's from Harvard. The list goes on. It's very securing, to say the least.
The Blockchain Trilemma was thought to be a dogma in the cryptocurrency community, and the term was coined by the founder of the much-popular cryptocurrency Ethereum (ETH), Vitalik Buterin. It refers to a problem where you can't achieve both speed, scalability and decentralization without sacrificing one of the aspects.
Nevertheless, has Algorand managed to achieve all these 3 points through it's ground-breaking technology, inherently solving the blockchain trilemma. Algorand is fast, decentralized, scalable AND secure - much thanks to its "Pure Proof-of-Stake" concept. This is how the Algorand Foundation explains it:
"Each user's influence on the choice of a new block is proportional to its stake (number of tokens) in the system. Users are randomly and secretly selected to propose blocks and vote on block proposals. All online users have the chance to be selected to propose and vote." - Source
The Smart Contracts function of Algorand is one the main pillars of its success and usability. It allows secure transfers and contracts to be made, without any middleman cutting into potential profits or charging high fees.
Algorand Standard Assets (ASAs) allows for anyone to easily create tokens on the Algorand platform, harnessing the same positive aspects of Algorand itself (high speed, security, cheap transactions). Developers can also implement their own smart contracts into their token, essentially allowing for a wide range of different use cases, read up on Yieldly or Tinyman as the main examples of this.
This have allowed for the Algorand ecosystem to vastly expand in a short amount of time, and the growth shows no sight of stopping any time soon.
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Thanks to point 2 and 3 (solving the blockchain trilemma, being secure, and allowing for smart contracts) it's the perfect candidate in acting as a platform for Central Bank Digital Currency (CBDC). Central banks around the world are currently in progress of launching their own digital currencies. For example, the European Union are planning the "Digital Euro", while countries such as El Salvador are already in talks with Algorand to launch their CBDC using its platform.
Considering the amount of capital, a CBDC project involves, it's easy to understand why these sorts of co-operations are of huge importance for any cryptocurrency, and to keep in mind if you consider investing in a given crypto.
With the ever-increasing importance of NFT's (Non-Fungible Tokens) and its markets a blockchain without NFTs simply cannot be competitive in this day and age. The news of Facebooks Metaverse supporting NFTs have spurred the market even further.
The Algorand protocol allows for cheap and fast minting of NFTs, unlike for example Ethereum where transaction fees can be almost cosmic. This puts Algorand in a great position to further expand as an option for NFT trading. In fact, the world-leading art and luxury auction business Christie's recently held an NFT auction powered by Algorand. Christie's reported global sales of $4.4 billion dollars in 2020.
It's of absolute essence that a cryptocurrency is easy to use in order to allow for mass adoption and mainstream use. Here's another point where Algorand really shines! Algorand has one of the most user-friendly wallets - the Pera Algo Wallet. In addition to its ease-of-use it allows you to participate in the whole blockchain ecosystem, with everything from signing smart contracts, connecting to the governance program, and of course making transactions.
Algorands transaction speed is approximately 5 seconds (compared to Litecoins 2.5 minutes, or Bitcoins 10-minute average transaction time) and the transaction fee is fixed at 0.001 ALGO (or roughly 0.0017 USD at the time of publishing this post). Few cryptocurrencies come close to these sort of numbers, especially while remaining scalable for wider adoption.
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Conclusion
These were the top 6 reasons why to invest in Algorand. An honorable mention goes to Algorand being a carbon-negative blockchain, off-setting its impact to the environment with ClimateTrade ♻️
Hopefully this article taught you something new. Algorand is truly one of the most well-rounded and best developed cryptocurrencies out there, despite its relatively young age.
If you want to educate yourself further on Algorand, then feel free to read through my other Algorand guides and articles that I've written. They are more in-depth and explain several different aspects of the protocol that might otherwise not be so obvious to newcomers.
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