Crypto of the Week: Algorand

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June 25 2021
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The ALGO coin is making its way onto more and more cryptocurrency exchanges, but many potential investors might be confused about how it fits into the wider cryptocurrency ecosystem.

Here’s everything you need to know about our latest crypto of the week: Algorand.

What is Algorand (ALGO)?

The ALGO token is the native coin of the Algorand blockchain.

The pitch for Algorand is that it’s a modernised, two-layer blockchain that’s poised to solve a lot of the scalability issues facing older networks like ethereum and bitcoin. In that sense, Algorand is arguably a competitor to ethereum.

However, there are a number of key differences here. The first is that Algorand uses a ‘pure proof-of-stake’ mechanism with a much lower barrier to entry when it comes to staking.

Even those who don’t formally stake their coins can earn rewards, which is novel, though not entirely unique.

The other half of the story is Algorand’s use of a two-layer blockchain.

Transactions made using the network are put on the first layer if they are relatively simple and can be hosted entirely on the blockchain. More complicated smart contracts, such as those that rely on off-chain data, are housed on the second layer.

Algorand also promises to allow for the easy creation of co-chains, which can then integrate back into the main Algorand network.

Smart contracts on the Algorand network are written in a programming language called TEAL.

Algorand’s argument here is that by drawing from the entire userbase and dividing the work across two layers, they’re able to offer faster transactions, better security and lower fees than other networks.

Who made the Algorand (ALGO) token?

Algorand was developed by a non-profit organisation called the Algorand Foundation and launched in 2019. This organisation oversees the funding and development of the Algorand protocol through a company called Algorand Inc.

According to the website, “The Algorand Foundation is committed to the development of an inclusive and transparent system where anyone can build prosperity through decentralised applications and projects, no matter where they are.”

“The Algorand Foundation will provide assistance with the network launch, along with initial governance and evolution of the public blockchain, with a primary goal of promoting broad participation and decentralisation of the network. The Algorand Foundation is helping make the borderless economy a reality.”

What is the ALGO token used for?

ALGO is used for two things on the Algorand network.

The first is that it functions as a necessary fuel for transactions made on the network. This is very similar to how ether works on the ethereum network.

The second is that ALGO can be staked as part of the network’s proof-of-stake model. Unlike other proof-of-stake networks, however, all ALGO coin holders are rewarded whenever a new block is added to the blockchain.

How much is the Algorand (ALGO) token worth?

As of 24 June 2021, ALGO is priced at US$0.813 per unit.

Tallied up at that price, ALGO has a market cap of approximately US$2.5 billion.

For comparison, bitcoin (BTC) currently has a market cap of US$953 billion while ether (ETH) sits in second place at US$463 billion.

Where can you buy the Algorand (ALGO) token?

The Algorand (ALGO) token can be purchased using major cryptocurrency exchanges such as:

Binance
Coinbase
Huobi
Kucoin

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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