The crypto market has taken a pounding with surging inflation rates, lagging job market recovery and the Federal Reserve’s hawkish stance. Such a tumultuous market scenario has investors in a fix, with many of them dumping their crypto holdings. However, these decisions are premature. The crypto market has seen immense growth in the past couple of years and will continue upward.
Though that’s not to say that every cryptocurrency has a bright future ahead, perhaps the current downturn is an opportunity for investors to reassess their portfolios and discard the more risky investments. That’s funny considering how notoriously volatile the crypto market has been, but the reality is that most cryptocurrencies don’t have much of a long-term case.
Algorand (ALGO-USD) is perhaps one of the few cryptos that offers a laundry list of use-cases for its investors. It checks all the right boxes when it comes to functionality and continues to improve the quality of its network. Considering its competitive advantages, it has the potential to become one of the stars of the crypto realm in the coming years.
The Algorand Validation Process
Perhaps the biggest differentiating factor for Algorand is its streamlined validation process. Unlike many of its peers, it uses a pure proof of stake mechanism. With a conventional proof of stake system, a small number of coin holders have an opportunity to disrupt the network. Conversely, with a pure proof of stake system, participants are chosen randomly and may not always go to the same stakeholders with the highest holdings.
Moreover, Algorand’s two-layered structure is another major advantage for the network. It reduces congestion and supercharges transaction speeds. The platform can handle over 1,200 transactions per second (TPS), while the existing financial infrastructure may take over a week to settle cross-border payments. It’s on its way towards a 3000 TPS and plans to scale it to a mind-boggling 45,000 TPS in the coming years. Additionally, its fee is remarkably low at roughly one-tenth of a penny for even the most complex transactions.
Smart Contracts Provide Utility
Smart contracts are arguably one of the most popular subjects in the blockchain business. They represent a novel way of approaching contacts by effectively streamlining complex processes through multiple intermediaries. They ensure compliance via a blockchain network which significantly reduces costs and simplifies negotiations.
Algorand announced the launch of smart contracts on its platform back in 2020, and since then, it has continued to look at new ways to add value to its service. In September, it released a back-end upgrade to boost the computing power of the applications running on its network. The Algorand Foundation recently launched a $20 million program focusing on developer tooling and Ethereum Virtual Machine (EVM) compatibility. Developers can now build versatile applications that could potentially disrupt various industries.
Furthermore, Algorand’s smart-contract functionality is supported by its unmatched interoperability. It has based its network on allowing multiple blockchains to interact together. Developers can build various applications that can work across various blockchains.
The crypto market has been obliterated in recent months. Most investors are concerned about whether they should ever have invested in such a volatile sector. However, instead of jumping the gun, they should add cryptocurrencies with a strong long-term bull case.
Algorand is undoubtedly one of the cryptos that offers tremendous value for its investors. Its developers continue to invest in the platform’s improvement and take things to the next level. Hence, ALGO is one of the cryptos with a massive upside ahead.
On the date of publication, Muslim 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.
