Why Algorand Is the Next Big Mover in 2022
Visa and JP Morgan like Algorand — why don’t you?
2021 was a clown year for investing, politics, and everything in between.
But it isn’t always like that.
I know this is hard to believe, but eventually, the market falls back on fundamentals. These times are called ‘bear markets.’
And when it comes to cryptocurrencies with strong fundamentals, few are better than Algorand or what is known as the leading cryptocurrency option to partner with the central banks.
In fact, earlier this year, the world’s first bank-issued digital currency was released on the Algorand blockchain. Nobody even noticed!
Here’s what else I love about Algorand.
For retail investors in crypto for long-term gains, Algorand is perfect
Created by MIT research scientist Silvio Micali, Algorand is like XRP, insofar that both aim to establish blockchain technology in traditional finance.
However, the difference between the two is that Algorand is a more secure and resilient blockchain to host a monetary system.
There are no forks on Algo’s blockchain, it’s mostly decentralized, there are no double-spend attacks, and it’s modified to resist quantum computing (a future technology that threatens all of crypto).
Algorand is the most serious tech in cryptocurrency.
Algorand is designed to solve complex issues in the baking world.
Issues like delays, costs, fees to intermediaries, and lag times between delivering services to their clients.
While banks like JPMorgan and Goldman Sachs were kicking and screaming over blockchain innovation early on, they might become crypto’s biggest supporters if projects like Algorand can help them boost efficiency (which they can).
Algorand continues to quietly dominate
Algorand claims to be one of the only cryptocurrencies to solve the blockchain trilemma, which posits that a cryptocurrency project can only accomplish two of the following: security, scalability, and decentralization.
Algo definitely solves those first two problems (security and scalability), however, Algo is much more centralized than its developers would like you to believe.
Validators on the Algo network are handpicked from universities and “early adopters.” Moreover, you need to apply to be a relay node. It’s nowhere near as decentralized as Bitcoin or Ethereum.
Ok. Here’s a bit of the nerdy stuff for you Trekkies out there.
Algorand’s consensus algorithm is called Pure Proof of Stake as opposed to Proof of Work on Bitcoin and Proof of Stake on Ethereum2.0.
Simply put, Pure Proof of Stake is just proof of stake but slightly improved by making cheating by the minority of the accounts virtually impossible and cheating by the majority not financially worth it.
As in traditional proof of stake consensus, holding ALGO helps secure the network and rewards you with free tokens.
If this happens, then Algorand will explode
Banks have always looked for smarter ways of doing things. While financial institutions fought cryptocurrencies like Bitcoin at first, they’ve come to appreciate the advantages that blockchain offers.
Now projects like XRP, XLM and Algorand are all fighting to become the cryptocurrency that rules the banking world.
Blockchains are essentially more advanced bookkeepers. They hold more data and are much more secure than their centralized partners.
Algorand, specifically, aims to solve a few issues in legacy finance, including:
- Providing clients access to global digital markets: Moving money out of the country is a miserable experience. There’s many hurdles to jump including fees, waiting times, and in the end, your transaction might not even go through. On Algorand, moving money takes 4.5 seconds.
- Stable and Less Volatile Prices: Some crypto investors have called Algorand a much more stable asset than most other projects. For better or worse, Algorand is one of the least volatile cryptocurrencies on the market making it a less gut-wrenching investment than say BTC or ETH.
- Near Instantaneous Transactions: Algorand can process tens of thousands of transactions per second, with all of them reaching finality within seconds. It’s already ten times faster than transactions processed on Visa
- Better Customer Experience: Algorand coupled with traditional finance removes many of the hurdles that customers experience in banking. As we saw with smartphones, blockchain would be revolutionary at first and seen as commonplace years down the line.
Final Thoughts
Algorand isn’t flashy, sexy, or over the top. It’s pragmatic. Algo knows its lane and is pushing full speed ahead.
It’s easier for the central banks to adopt technology that already exists than to already create their own blockchains. It’s why there’s a high chance that Algo can become the cryptocurrency for the banks.
To date, Algo has partnered with JP Morgan, Visa, Hex Trust (the leading bank-grade digital asset custodian), Swift, as well as the Marshall Islands to bring them their first national digital currency.
I don’t want to end on a sour note, but it’s important to remember that while the integration of Algo can revolutionize the banking sector, how soon that adoption happens is a legitimate question.
Road maps and schedules tend not to work out in crypto.
Just ask Cardano.
Regardless, Algorand is going to fly under the radar for many investors in 2022. And that’s simply a crime.
Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.
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