Now, I know what you are thinking. Not another cryptocurrency. But hear me out here. Low-price, small-cap Algorand (CCC:ALGO-USD) has gone unnoticed while the bigger players like Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD) take all the thunder.
Algorand, founded by cryptographer Silvio Micali, addresses three key problems with the project: decentralization, scalability, and security. Resolving these issues is the key to growth for any blockchain.
Algorand can handle unlimited transactions fast and not compromise on network security or decentralization.
Investors are hip to this. ALGO token had an excellent bull run in early 2021. However, there has been a recent price dip, providing an excellent entry point.
But I understand the skepticism. Why own smaller altcoins and not the industry bellwether, Bitcoin, for example. Nevertheless, Algorand has certain unique characteristics that set it apart from other tokens.
Algorand Merges Aspects of CeFi and DeFi
Due to the emergence of Bitcoin and several other cryptocurrencies, there is a lot of talk surrounding decentralized finance, (DeFi). However, despite its success, DeFi is nowhere close to matching the value of centralized finance. Many investors even fail to understand this phenomenon despite pouring capital into the area.
This is one of the main reasons for bullish on Algorand since it acts as a bridge between CeFi and DeFi through partnerships with strategic centralized finance players, including the Society for Worldwide Interbank Financial Telecommunications (SWIFT), HSBC (NYSE:HSBC), Facebook (NASDAQ:FB), and the Official Monetary and Financial Institutions Forum (OMFIF).
Apart from this, Algorand offers a comprehensive guide on developing smart contracts, which are an integral part of the future of finance.
Centralized financial institutions will have to understand these features better to serve their customers in the future. The good thing is that Algorand is creating the infrastructure to connect legacy financial systems with DeFi.
Algorand and NFTs
According to the project’s metrics, over 4.5 million non-fungible tokens, or NFTs, have been launched on the Algorand blockchain over the last couple of months.
NFTs are cryptographic assets on the blockchain with unique identification codes and metadata separating them. They are different from regular cryptocurrencies since they cannot be traded or exchanged at equivalency. In contrast, Bitcoin and Ethereum work differently since you can buy, sell and hold their digital coins without any equivalency issues.
In the last few months, the popularity of NFTs has skyrocketed, with major brands such as Disney (NYSE:DIS) and Fox Corporation (NASDAQ:FOXA) cashing in. This is great news for blockchains that facilitate the issue of NFTs, Algorand being a great example.
A Strong Developer Team
One of the main reasons to invest in a crypto project is the quality of its developer team. The more active the developer team, the higher the chances of success. In addition, a team of developers and cryptography experts will have greater chances of success than one made up of primarily non-technical people.
Therefore, one of the main reasons to be bullish on Algorand is its development team. The project founder, Silvio Micali, is faculty at the electrical and computer science department at the Massachusetts Institute of Technology. He is well versed in cryptography; Micali is one of the people that developed probabilistic encryption. He is also among the inventors of zero-knowledge proof and other technologies that anchor cryptocurrencies.
Chris Peikert, the head of cryptography at Algorand, is an associate professor of computer science and engineering at the University of Michigan and is one of the foremost experts.
If you check the project’s Github commits, you will appreciate how active this team is. The project’s latest update on Github was on July 7. It was about the implementation of Algorand in the Go programming language.
A Fast and Secure Blockchain at a Discount
Overall, considering the fundamentals and the market dynamics, Algorand is a great addition to your portfolio. Algorand was designed from the ground up for modern financial applications, all on a carbon-negative blockchain.
With the broader crypto market in retreat, now is the right time to add this small-cap altcoin to your holdings at a discount.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. Faizan does not directly own the securities mentioned above.