As cryptocurrency becomes more and more mainstream, investors are increasingly looking for quality and utility. If founders are indicative of quality, then Algorand (CCC:ALGO-USD) makes a lot of sense.
That’s because Algorand was founded by Silvio Micali, a professor of computer science at the Massachusetts Institute of Technology.
Micali is a recipient of the Turing Award in 2012. The Turing Award has been likened to the Nobel Prize in the field of computer science. Suffice it to say, that association has garnered Algorand a lot of attention.
Purpose of Algorand
There is an ongoing competition to increase efficiency and transaction speed within the cryptocurrency and blockchain space. Some projects, like Ripple (CCC:XRP-USD), seek to carve out niche positions with DeFi and improve areas like cross-border transactions.
Meanwhile, others including Algorand are attempting to supplant industry first movers like Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD). Because while Bitcoin and Ethereum have enjoyed first-mover advantages there are cracks emerging in their respective positions of dominance.
Algorand differs from Bitcoin in that it is a proof-of-stake system rather than a proof-of-work system. This means that Algorand doesn’t require mining while Bitcoin does. Ethereum is in the process of moving toward a proof-of-stake system. That distinction aside, investors are more likely interested in Algorand’s utility.
Use Cases Aplenty
I began by asserting that investors are increasingly looking toward utility when analyzing DeFi projects, including Algorand. The good news is that Algorand already lists around 500 partners and associated use cases.
The company also highlights dozens of them on its site. For those interested in doing a deep dive on the company, those cases can be found here.
Algorand’s use cases span the entirety of the DeFi space making it difficult to succinctly encapsulate its utility. So instead, let’s look at some of its projects in order to more fully understand it.
Working With Exchanges
Algorand is working with decentralized smart contract firm Idex. Idex bills itself as the world’s most advanced decentralized exchange. The project is intended to build a platform which can support real-time trading and high transaction throughput.
ALGO-USD is already proving that it has utility in helping exchanges improve transactional throughput. That’s one area that will prove pivotal in the future success of DeFi.
But DeFi has applicability on the national level as well. El Salvador recently made headlines as the first country to adopt Bitcoin as legal tender.
But Algorand isn’t far behind. In fact Algorand is being utilized to build the blockchain for the world’s first national digital currency in the Marshall Islands. If the project is successful for the Pacific island nation of 60,000 people Algorand could expand it in scale and location.
The project has been underway since early 2020 and will result in a currency called the Marshallese Sovereign, which will circulate alongside the U.S. dollar.
The use cases go on and on and touch on climate change, finance, government and many other areas. On top of its many use cases Algorand also has many institutional backers as well.
Algorand recently made headlines when SkyBridge Capital announced plans for an Algorand Fund in mid-September.
SkyBridge Capital is headed by Anthony Scaramucci, its founder and former White House communications director. His firm holds more than $700 million in cryptocurrency assets and has raised more than $100 million toward its Algorand Fund.
Plans for the crypto-based ETF only further fuel the rise of the alternative asset class into the mainstream. And the fact that Algorand is set to feature so heavily further fuel its rise as a major player in the crypto asset space. ALGO-USD is relatively inexpensive at present, but it should have fuel for growth following all of the recent news.
On the date of publication, Alex Sirois 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.