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Algorand (ALGO) coin review: Will it be valuable in 2021?

date February 4, 2021 time 4 min read 2076 views

If you’re considering investing in promising new cryptocurrencies, Algorand coin is likely to be high on the list. Debuting in 2017, Algorand has been one of the most influential new smart contract protocols to hit the market and has been innovating for over three years. Here’s what you need to know about Algorand’s history and where to purchase ALGO in 2021.

Algorand coin claims to solve a problem that many crypto-projects claim they solve: better security, decentralization, and scalability on the blockchain without sacrificing anything. However, they’ve had quite a bit more traction and years under their belt than many competitors

Algorand has received plenty of attention from investors raising $60 million in its public coin sale after its 2017 launch and another $200 million in 2019.

Prominent backers include the digital asset management firm, Arrington XRP and venture investor, Brainchild.

Here’s a breakdown of what Algorand coin is, whether it’s a good investment, and how you can buy it.

There are lots of cryptocurrencies that could make for good investments, but the future of Algorand coin in the wake of DeFi’s rising looks particularly bright (source: coingape.com)

What is Algorand coin?

Algorand is a decentralized smart contract platform run using its own cryptocurrency, Algorand coin (ALGO). In the words of its creators, Algorand is the “first open, permissionless, pure proof-of-stake blockchain protocol.”

But what does this really mean?

The platform enables quick, secure transactions while still allowing for democratic consensus on the blockchain. Algorand coin’s role is to incentivize you to validate transactions on its platform. More on that later.

Algorand also distributes its cryptocurrency to existing Algorand coin holders whenever you form new blocks — even if you don’t stake. However, it requires you to hold the crypto in a non-custodial wallet.

Now let’s talk about what makes Algorand unique.

Algorand’s “pure” proof of stake

Let’s try to explain Algorand in simple terms. It may help if you already have a basic understanding of blockchain tech.

One of Algorand’s most important features is its “pure proof of stake protocol.” 

Blockchain platforms require a security process to ensure that transactions are legitimate without resorting to approval by a single person or company. 

Most of them, like Bitcoin and Ethereum, use an algorithm called “proof-of-work.” Unfortunately, this requires huge amounts of computational power for anyone who wants to take part (e.g., Bitcoin miners trying to earn Bitcoin). It also opens up vulnerabilities to miners who own large amounts of the network.

Algorand set out to be more democratic by developing a “pure proof of stake” protocol. This is their unique algorithm for self-validating transactions. The platform randomly chooses a group of nodes to validate new blocks (representing transactions), who are more likely to be chosen if they have more tokens. 

Currently, Algorand can run at a thousand transactions per second.

What makes Algorand coin different from the rest?

If you’re still confused about exactly what makes Algorand coin different from other cryptocurrencies, let’s delve into its standout features.

The “Blockchain Trilemma”

You probably understand how trade-offs work, one good thing (e.g., saving 50% of your income) usually comes at the expense of something else (e.g., living a very frugal lifestyle).

The world of blockchains is no exception — there’s one particular tradeoff known as the “Blockchain Trilemma.”

Developers have always struggled to create a platform that’s simultaneously scalable, secure, and fully decentralized. If it does two of these things successfully, the third must be sacrificed — or at least, not as effective as it could be. 

But Algorand’s founders didn’t want to sacrifice anything.

The Algorand technology helps to solve the blockchain trilemma
The Algorand technology helps to solve the blockchain trilemma

So, Algorand aims to handle each aspect of the trinity simultaneously through its features:

  • Pure proof of stake protocol (aids decentralization)
  • Instant verifiability (security)
  • Transaction management systems (scalability)

Algorand history

MIT Professor Silvio Micali founded Algorand back in 2017. He has received prestigious prizes like the Turing Award for his contributions to cryptography.

Micali brought other MIT professors on board to join the Algorand team including a CTO who has previously worked at Google and won awards for his work in research and security.

Currently, Algorand is mostly used by developers creating other applications on the blockchain called Dapps.

Is Algorand coin a good investment?

First, let’s take a look at the figures. 

The current Algorand coin price is $0.57 (as of January 2021). That means Algorand’s return on investment since its 2017 launch has been negative,  due to a dramatic plummet in July 2019.

Other indicators look more promising, especially ALGO’s growth rate of around 496% since its all-time low in March 2020. The Algorand coin price has now almost returned to its pre-crash peak.

Algorand coin is just one of many new DeFi cryptocurrencies you might want to consider investing in. And they may have a bit more credibility than other new smart-contract projects as they are in their 4th year of operation.

Still interested? Great. The next step is figuring out how to buy Algorand coin, and we have a great option for you.

How to buy Algorand coin at the lowest rates without trading your crypto 

If you are tentative about getting in on Algorand and don’t want to trade your crypto, you can borrow Algorand with a crypto-backed loan on MyConstant. We let you put down other cryptocurrencies as collateral (including Bitcoin and 73+ more cryptocurrencies).

Investing in Algorand coin is easy with MyConstant

You can also use Algorand to back a stablecoin or USD loan, allowing you to make use of your cryptocurrencies without having to sell them.

With interest rates as low as 6% APR, early repayments options, extensive security features to keep your digital assets safe, and 24/7 customer service we offer some of the best features in the industry for crypto-backed loans.

Sign up for a free account today.

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