Every day the popularity of cryptocurrencies increases, and with it, their value. However, concern about the environmental consequences of mining is widespread. Algorand was born as a more democratic alternative blockchain with a zero carbon footprint. It has the potential to develop digital currencies issued by the world’s central banks (CBDC).
Algorand, a Blockchain without a Carbon Footprint
In recent years, cryptocurrencies have become increasingly popular for being speculative assets that exploded in 2021. Bitcoin, for example, reached an all-time high of $69,000 in the second week of November 2021. With this valuation, it became the eighth-most valuable asset, with a market capitalization of more than a trillion dollars.
However, there are concerns about the environmental damage caused by Bitcoin. Cambridge researchers claim that it consumes more energy annually than all of Argentina. For this reason, several new blockchains seek to eliminate high energy consumption and offer the same decentralized technology. One of them is Algorand, committed to being the greenest blockchain with a zero carbon footprint.
This blockchain is even carbon negative, which means that it does not contribute to the global carbon problem and is also actively working to reduce its environmental impact. Algorand Inc, one of the Algorand communities, donates money to ClimateTrade, a leading carbon offset solutions company.
The prospect of Growth in the World of Cryptocurrencies
In 2018, Cecilia Skingsley, Deputy Governor of the Swedish Central Bank, predicted that her country would go cash-free by 2025. More and more countries will switch to digital money, and both central banks and governments will seek to develop their own CBDC (Central Bank Digital Currency).
The task is not easy, so these entities have turned to cryptocurrencies for help. Algorand has drawn the attention of some governments to develop its own CBDC, so it is a promising blockchain in the world of cryptocurrencies.
Algorand Token Economy
The native currency of this blockchain is called ALGO, and it is used to carry out all transactions in the network. Algorand works with the PPoS (Pure Proof of Stake) consensus mechanism. It implies that the ALGO coin is inflationary, as new coins are minted to reward token holders who propose new blocks on the network.
There is a maximum supply of 10 billion ALGOs, and there are currently 6.9 billion in circulation. The historical maximum reached by ALGO has been 3.28 dollars.
How Is ALGO Going this Year?
Contrary to 2021, a good year for cryptocurrencies, 2022 has brought unpleasant surprises for cryptos, and Algo has not been the exception. After being worth $1.79 at the start of the year, its current value is $0.38, as coinbase reports.
Considering its all-time high of $3.28, Algorand is currently down 87.72%.
About Algorand Inc & Algorand Foundation
Many investors are worried because Algorand Inc owns many ALGOs. They believe the protocol is centralized, but this idea is wrong. Just because a person has a large amount of anything does not mean that the network is centralized.
The real concern of investors is that the one person who owns a large majority of coins will sell them all at once and wreak havoc on their price, similar to what recently happened with Terra. To the good fortune of investors, Algorand Inc is one of the two communities that the Algorand blockchain supports. One person does not make the decisions.
Algorand supports two communities, one of which is the Algorand Foundation which focuses on protocol governance and open source development. This community has also supported education for new platform development in Algorand, specifically at MIT and UC Berkeley. On the other hand, another community is Algorand Inc which is in charge of enterprise adoption of Algorand technology.
Algorand’s Potential to Develop CBDC
Central banks continue to investigate networks to host their central bank digital currencies (CBDCs). Meanwhile, Algorand has become a viable option, as, through its blockchain, it has the potential to create different types of tokens. With its secure, decentralized, and scalable blockchain, it has been chosen to host the digital currency of the Marshall Islands.
The choice of the Marshall Islands was made in conjunction with SFB Technologies and implies a critical paradigm, as it is the first country to develop a digital currency issued by its central bank using blockchain technology.
Algorand was chosen for its PPoS consensus mechanism that enables the development of native blockchain solutions for real-world use cases. Also, for its speed, scalability, security, and ability to effectively implement the required compliance controls and the transaction finality necessary for a national currency.
How does Algorand Work in the Digital World?
Like other cryptocurrencies, ALGO is available online through sites like Binance and coinbase. These are among the most popular and reliable; you only need to register on its page, validate your financial account with which you will acquire the crypto, and make the purchase.
Now, how to operate with Algorand? ALGO is traded and exchanged with three leading cryptocurrencies: USDT, BTC, and ETH. Because ALGO is a new token, it is not yet traded like other coins like DOGE, ETH, and BTC.
You can also bet on SOMETHING and earn a percentage between 5 and 10% on your stake; the most popular bet options are Binance, Kucoin, and coinbase Pro.
Algorand Goes to the Qatar 2022 World Cup
Algorand already has the ball in hand, as it allied with FIFA this month. The agreement implies that Algorand will be the official blockchain platform of this highest authority in football and provide the official blockchain-supported wallet solution. In turn, it will be the regional sponsor of the 2022 FIFA World Cup Qatar in North America and Europe and the 2023 FIFA World Cup in Australia and New Zealand.
On the other hand, FIFA will provide sponsorship goods and services, including advertising, media presence, and promotional opportunities, for one of the most-watched events worldwide.
Although as a result of this alliance, the currency shot up to 14% and reached 0.67 dollars, this did not last long, and a few days later, it fell 30% to 0.40 dollars.
Future of Algorand
The world has a very significant financial inequality problem. In Africa, Asia, Latin America, and the Middle East, more than 2.2 billion adults live at an economic disadvantage.
Algorand aims to break down these barriers. Therefore, it offers the opportunity to participate in an economy without borders. Its goal is for developers and organizations worldwide to use the protocol to create financial applications aimed at economically disadvantaged people. With this conviction, he has established several grants for developers, researchers, educators, and community ambassadors who want to help support the protocol with their contributions to the ecosystem.
ALGO in the Coming Months
The predictions for this cryptocurrency are very divided; however, based on the first few months of the year, ALGO could drop as low as $0.16. However, although its trend is bearish, it is worth mentioning that some believe that Algorand could take an unexpected turn and close the year with a value of 2.60 dollars.
The world of cryptocurrencies is very fluctuating and the only thing sure about them is that they are always in constant change. Anything can happen, as we have become more than evident this year.
Updated on May 30, 2022, by Sarahy Uribe.
Translated from Spanish on June 1, 2022.