Algorand will probably be a first Altcoin this year
For most investors, the cryptocurrency industry revolves around a handful of digital assets. However, we have seen how industry stalwarts such as Bitcoin (CCC:BTC-USD) don’t offer the exponential gains they once did. New altcoins are becoming more attractive, and some of them, including Algorand (CCC:ALGO-USD), provide incredible real-world utility.
ALGO-USD was created by MIT professor Silvio Micali in 2017. Algorand is a new player in the crypto space and has already made waves with its extremely impressive throughput and interoperability with other networks. ALGO-USD has quickly risen through the ranks of cryptos and is among the top 30 cryptos by market capitalization.
Similar to other crypto networks, Algorand aims to facilitate transactions in an efficient and robust manner. However, it has multiple features that set it apart from its peers. Therefore, it has a spectacular growth streak ahead of it, making it an exciting long-term investment.
Algorand has strong fundamentals
The most important aspect to consider when investing in a cryptocurrency is its fundamentals. There are countless cryptos out there, most of which rely solely on hype to move the needle. However, cryptos like Algorand have strong fundamentals, which offer massive utility to their owners.
For a very long time, cryptonets were “closed”, offering no peer-to-peer interoperability. However, Algorand is different because its Layer-1 network provides an ecosystem that allows tokens from other blockchains to communicate efficiently. This allows developers to create multiple applications on different blockchains. It seems that collaboration between the networks will be key for Algorand to have the upper hand over its competitors.
Additionally, through smart contract functionality, Algorand users can engage in a variety of value-added services. The functionality adds to the platform’s use cases, including its usefulness in non-fungible tokens (NFTs) and decentralized finance (DeFi) businesses.
These growth engines are fueling the bullish case for Algorand right now. With more investors looking to diversify their holdings with crypto holdings, ALGO-USD will stand out among the altcoins with the most potential.
Focus on speed and security
Algorand stands out from its peers for its remarkable speed and security. A lot of research has been done regarding the lines mentioned above. It can process nearly 1,162 transactions per second (TPS). Moreover, its average block finality is only 4.36 seconds, giving it a day and night advantage over major financial institutions. Therefore, it can handle transactions almost instantly and the goal is to reach 3,000 TPS. Moreover, the ultimate goal of the network is to reach the staggering figure of 46,000 TPS.
Another differentiator of the Algorand network is its pure proof-of-stake (PPoS) mechanism. Perhaps the main problem with a typical PPoS mechanism is that a handful of major stakeholders can disrupt the network. Therefore, the power belongs to the users with the highest stakes in a particular network.
However, with Algorand’s PPoS system, power is distributed among users. Moreover, the system gets things done without solving complicated calculations in a proof-of-work mechanism. Therefore, Algorand’s network is ideal for payments and has the potential to become a top player in some of the most lucrative crypto areas.
Conclusion on Algorand
Crypto investors looking to play the long game should invest in those assets that provide robust use cases.
Algorand is a unique network that offers incredible functionality and interoperability. ALGO-USD soared over 400% in value last year before, like most other cryptos, plummeting in January. Yet, it still has huge upside potential.
Naturally, no cryptocurrency is immune to risk, so it’s best to invest what you can afford to lose.
As of the date of publication, Muslim Farooque had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
Muslim Farooque is a passionate investor and an optimist at heart. A long-time gamer and tech enthusiast, he has a particular affinity for analyzing tech stocks. Muslim holds a Bachelor of Science in Applied Accounting from Oxford Brookes University.