WHY ALGORAND? WHAT SHOULD I KNOW BEFORE I CHOOSE ALGORAND FOR MY BUSINESS OR INVESTMENT?

Welcome to new, existing and OG members of the ALGORAND community.

SILVIO MICALI — FOUNDER/INVENTOR OF ALGORAND

We are happy to provide you with a SPECIAL INVESTMENT THESIS for ALGORAND, compliments from the ALGO GANG ORIGINALS, an exciting, new pop-crypto-culture character/story NFT series that will be launching on ALGORAND in approx. 3 weeks. Click on the above link to access our whitepaper or see our social media channels at the end of this article.

The following is a backgrounder to help you make an informed decision on whether or not you want to select ALGORAND to be your blockchain for your business, start-up or NFT project. Or whether or not you want to become or remain an investor of ALGORAND.

This piece is intended to be informative only and is not financial advice or an enticement to buy more ALGO. As a disclaimer, the author of this article @bmorecmore is a holder of ALGO, be sure to follow him on Twitter.

WHY ALGORAND?

If you are new to blockchain and the crypto space or have been here for a while, you will realize that there is a lot of hype, false claims and hopium that dominates the news cycle. However, beneath the Bitcoin, Ethereum, and Doge Headlines, there exists a blockchain that is future focused and positioning to become the blockchain utility engine for supporting the world’s digital asset transactions. This blockchain is ALGORAND.

Here are 4 Reasons why ALGORAND will become a household name and gain blockchain dominance as a top 5 chain.

First premise: Technology ultimately wins

Blockchain-enabled technology enables the exchange of digital assets with permanent proof of transaction and without the need for a middleman 3rd party to oversee the asset exchange. This way of digital interaction has the potential to take over as the main way we conduct our financial transaction. However, in order for blockchain-enabled technology to achieve mass adoption for retail digital transactions, the blockchain needs to be able to meet the following criteria: high utility, fast speed, massive scale ability, hack-resistance security, and all transactions at low costs.

In terms of Level 1 Blockchains (e.g. Bitcoin, Ethereum, ALGORAND, Avalanche), ALGORAND is currently one of the only blockchains that are best positioned to meet the global requirements for supporting everyday digital (financial) transactions. One way to put Algorand into perspective at this moment is to use Google as an analogy. When Netscape, AOL, and AltaVista were dominating the news as popular Internet Search Engines and Email providers,

….Google was quietly working behind the scenes to develop the best strategy for search engine with the best tech in the industry. With this strategy, Google rose from a relatively unknown start-up to an industry leader & world prominence in the Internet space. One could argue that the same thing is happening with Algorand. As all eyes have been on Bitcoin and Ethereum, Algorand has been focused on delivering high-tech blockchain innovation, resulting in significant advantages that will help this blockchain to rapidly rise in prominence.

Technological Advantages — ALGORAND is a block chain that is constantly upgrading with new innovations and without forking into separate chains, as experienced by Bitcoin and Ethereum. While popular chains like Ethereum require services to exist above the chain for better performance (in what’s called Level 2), almost all of Algorand’s technological features are build directly into the main Algorand blockchain. In tech speak, ALGORAND CEO Steve Kokinos calls these advantages ‘Primitives’)

• Proof of Stake Permissionless Blockchain — this is a key feature of Algorand. Algorand was built from scratch on the idea of using Byzantine agreements to establish consensus on block propagation and verifiable random functions and zero-proof knowledge to facilitate and validate transactions. ALGORAND was created from the genius mind of Silvio Micalia, a MIT professor and Turing Award winner (the Nobel prize of Computer Science) who has a legendary status as the Godfather of Cryptocurrency. Silvio Micali had the foresight to see the short-comings of Proof of Work blockchains and decided he could build a better blockchain on the foundation of mathematical principles. If you like to nerd out, here is Silvio Micali’s Scientific Paper on Byzantine Agreement

TRANSACTIONS PER SECOND

• Transactions Per Second (TPS) — currently ALGORAND offers 1200 TPS/sec, however, it is upgrading to a mind boggling 46,000 TPS/sec by end of year. See Algorand 2021 Performance. This transaction rate will be needed to manage future Central Bank Digital Currency (CBDC transactions). Bitcoin is 7 TPS/sec, Ethereum is 20 TPS/sec, PayPal is 193 TPS/sec, Visa averages 1700 TPS/Sec but can go to 24K TPS/Sec. This helps you to realise that ALGORAND, with a potential for 3.9 billion transactions per day, will be lightyears ahead of the current popular blockchains and payment services.
• Transaction Finality — currently it takes 4.5 seconds to complete a transaction on the Algorand blockchain. Using a mathematical technique to ‘pipeline’ transactions, Algorand will be upgrading to 2.5 seconds for transaction completion. This feature is mission critical for supporting the mass adoption of retail point of purchase transactions on a blockchain. An example of a retail point of purchase is the act of buying a coffee at a cafe. Which you can already do so with $ALGO at Caffe Barbera in Italy. In contrast, for transaction finality… Bitcoin is 60 mins and Ethereum is 6 mins (Ethereum will improve when it moves to PoS). PoW blockchains do not have the technical capabilities within their blockchain to support daily retail transactions. Daily retail transactions are possible for these chains through the use of Level 2 (above chain) services or by ‘wrapping’ the native cryptocurrency (like $BTC or $ETH) so it can be used on a high-utility blockchain like ALGORAND or other contenders like Harmony One or Avalanche.
• Quantum-Resistance Security — ALGORAND understands our near future will include quantum computers with the computing power to crack many of today’s cryptocurrency wallets. To be the chain of the future, where the world’s wealth will reside in crypto wallets, blockchains need to consider how they will protect this massive amount of wealth. Fortunately, ALGORAND is focused on security and quantum resistance. This is why they hired Chris Peikert — the world’s leader in post-quantum cryptography works for ALGORAND (since Feb). This is also why AGORAND recently upgraded their programming language to TEAL 4 programming, which now supports 512 bit integer registers, a massive boost to security & encryption on the ALGORAND blockchain. ALGORAND now supports a bit register that is 2x greater than the 256 bit registers in Ethereum Smart Contracts. Additional comments: Bitcoin relies on the Elliptical Curve Digital Signature Algorithms which could be broken (Hacked) by a Quantum computer by 2027 Ref to ALGORAND Quantum Safe Variable Random Functions Ref to Bitcoin Quantum vulnerability
• TEAL 4 programming — supports a mind-boggling capacity for complex mathematical calculations, positioning ALGORAND as the only blockchain with the technical capabilities to support the derivatives market

• No Forking — ALGORAND does not fork. The Actual Mathematical Probability of ALGORAND forking is 0.0000000000000001% Whereas, Bitcoin or Ethereum which can suffer from Forking and transaction invalidation (Losing fees due to failed transactions on Ethereum is a huge issue, costing retail users from 10’s to 100’s of dollars per failed transaction).
• Low fees ALGORAND fees are set at 0.001 ALGO per transaction. — Less than a penny and can be adjusted down at any time by ALGORAND if the value of Algo rises. Let’s take a quick moment to appreciate the significance of the low fees on ALGORAND. In March, an Italian company, SAIE, who protects the intellectual property rights of authors and publishers, uploaded about 4.5 million NFTs onto the ALGORAND blockchain. At today’s prices, the fees for these 4.5 million NFT transactions would be: ALGORAND: $9,315 USD and ETHEREUM $180,000, 000 USD (a very conservative estimate). The difference is obvious and the implications on which chain will be used in the future for daily transactions is evident.

TOTAL TOKEN SUPPLY BY SMALLEST RECORDABLE UNIT

• Smart Contracts — ALGORAND built Smart Contracts into their main blockchain. This is a huge advantage for businesses to settle contracts, manage supply chains, transfer real estate ownership, and settle digital asset swaps. The possibilities are endless here. In contrast, Cardano which benefits from hype and marketing is still struggling to get an effective set-up for Smart Contracts
• Co-Chains — ALGORAND also offers Permissioned (Private) Co-chains that can support Central Banks and Institutions to manage their own chain with their own trusted validators and their own determination of transaction fees. The Permissioned Co-chain is connected to the Public Permissionless Co-chain allowing Central Banks/Institutions to sell/swap assets with the main chain or other co-chains. For example, ALGORAND supports China’s Blockchain Service Network (BSN) with a Permissioned Co-chain and the International BSN with their permissionless main chain. ALGORAND Co-chains are often overlooked by investors and people who are looking at which blockchains will support Central Banks. This makes ALGORAND a bit of a dark horse. This is one of the key reasons, the ALGORAND team is deep into conversations with at least 16 Central Banks.

• Green, Sustainable Technology — ALGORAND pledges to be a Carbon-Negative blockchain and is a supporter of the UN Sustainable development goals. With Proof-of-Stake, it ranks as the most energy efficient blockchain. E.g. Average Energy Consumption in April 2021: ALGORAND 0.000008 kWH/txn vs Bitcoin 930 kWH/txn. Bitcoin uses 116 Million Times more energy than ALGORAND. Today, many institutions/companies are carbon-regulated and energy consumption will be a key factor in selecting a blockchain to support their business. ALGORAND has a huge advantage here.

Second Premise: Vision-led and Purpose Driven

ALGORAND does not focus on marketing, it focuses on building. Their efforts have concentrated on building up their ecosystem and positioning their blockchain to be the reference chain for CBDC and stablecoins. All of the efforts of the ALGORAND team is to position ALGORAND for FutureFi (Future Finance) and the inevitable mass adoption of digital currencies. The ALGORAND team is highly exposed and connected to the ‘who’s who’ of the Banking and Investment industry. They operate in the same circles as Gilbert Verdian of Quant and Brad Garlinghouse of Ripple. This includes the following:

• CBDC Policy Setting and Focus — Since inception, ALGORAND has been targeting Central Banks and Institutions to become the utility blockchain for CBDC and digital assets. ALGORAND is already in Proof-of-Concept talks with 16 Central Banks. In the blockchain space, ALGORAND is the CBDC policy leader.

• MIT Digital Currency Initiative & Boston Fed collaboration for US Digital Dollar Silivo Micali is currently a collaborator to this MIT-DCI initiative. His friend (and ALGORAND supporter) Gary Gensler was the previous faculty advisor to MIT DCI. Of course, Gary is now well position as Head of the SEC. Regarding the US Digital Dollar, it is unlikely the US Government will design their own blockchain from scratch. There is not enough time for this as China’s Digital Yuan is expanding in use and influence and the EU is accelerating efforts to introduce a Digital Euro. The US will need the support of private/public partnerships to stay competitive and current with China and Europe. This leads to a high probability that ALGORAND blockchain technology will be leveraged to support the US Digital Dollar. Of course, it could also be other blockchains as we need our digital assets to be interoperable. Yet, given the technological advantages of ALGORAND, it has a great chance to become the potential host chain for the US Digital Dollar.
• Digital Monetary Institute — OMFIF (think tank for Central Banks) — ALGORAND leads on the Future of Payments positioning papers, with the patronage of Visa, Mastercard, Paypal, and Facebook’s Novi (Diem).

• Digital Euro Association — Only a few blockchains are members. ALGORAND leads with 2 employees on the committee: Dr. Andrea Civelli & Peitro Grassano

• World Economic Forum — ALGORAND is a Global Innovator Partner (invite only membership) and a major policy contributor to two WEF policy platforms: 1. Shaping the Future of Financial & Monetary Systems and 2. Shaping the Future of Tech Governance: Blockchain & Digital assets. The involvement of ALGORAND in these global financial policy efforts further supports their strategy to build for the long term.
• International Swaps & Derivatives Association — One of only a select few Blockchains working with ISDA to digitilize the derivatives market. ALGORAND is recognized as a CDM Champion based on their solutions for the Common Domain Model (CDM). This may be what Paul Milgrom is working on. Paul is an economist at ALGORAND, however, you might know him from his Nobel Prize for his work on Auctions. Derivatives OTC market is $15.5 trillions. ALGORAND TPS upgrade and TEAL 4 programming positions it as the only blockchain with scale, speed, and security to support the complex mathematics, digital transactions, and trading in the derivatives market.

• El Salvador — first (but not last) nation to select ALGORAND as the blockchain infrastructure to support all of their government digital transactions.
• Stablecoins ALGORAND supports $USDC, $USDT, $BZR, $EURe, $VCAD, $TYRB and the Brixton Pound. With fast transactions, low fees and security…ALGORAND is becoming the go-to blockchain for stablecoins.

Third Premise: Build Today for Tomorrow and Tomorrow will be Glorious

ALGORAND is deeply invested into building up a robust and diverse ecosystem of viable use-cases, projects and real-world applications. Their focus is long term and they do not market any hype. Over 700+ projects are currently building on ALGORAND in a little more than 2 years post mainchain launch. Start-up Accelerators have been running in Asia, America, Europe and Latin America. Valid use cases are everywhere.

Governance Program — launching Oct 1st, the Governance program will transfer decision-making power over how to spend 3 billion ALGO to the ALGORAND community ‘governors’ One ALGO is one Vote. ALGO is locked in (committed) for 90 days and ALGO Governors must vote to be eligible for the governance rewards. Depending on the amount of participating ALGO, ALGO Governors can receive between 6 % to 24% APY for their voting participation. The major significance of the governance program is that it will reduce ALGO inflation and introduce ALGO scarcity which ‘could’ drive up ALGO price and value.

Massive investments into building the ALGORAND ecosystem:

• $300 million (150M Algo) VIRIDIS Fund to drive DEFI projects
• $100 million Michael Arrington Fund to support start-ups on ALGORAND. Read their report: Illuminating The Dark Age of Blockchain: Algorand

• $25 million fund from Borderless Capital to support start-up scene in Miami
• Tim Draper Algorand accelerator

DeFI Launches in Q3/Q4 2021:

• AlgoDex — first Decentralized exchange on ALGORAND, allowing for the trading of Algorand ASAs (Algorand Standard Assets)
• Tinyman — our version of Uniswap but better due to low fees and speed

• AlgoMint — wrapped Bitcoin and wrapped Ethereum and other crypto coming to Algorand

• Yieldly — cross-chain interoperability, No loss lottery. Yieldly is already launched and continuing to evolve. Most recently, they have been having NFT giveaways
• Quantoz — peer-to-peer platform for Bonds, e-money and derivatives
• StakerDao — wrapped ALGO to tap into popular DeFI projects on Ethereum

Sustainable projects: Climatetrade, Planetwatch, GCarbonproject, Alastria, ARCC-IBMR (sustainability for urban poor), FLRchain — tracks forest land restoration

NFT Ecosystem: Algorand is the desired blockchain platform for supporting NFTs — no forking, low fees, fast transactions. The Algorand NFT ecosystem is exploding. A number of NFT marketplaces are available or launching, such as these @ArtDahai, @_Dartroom, @ab2_Gallery, @RandGallery, @zestbloom

Lots of amazing projects in the ALGORAND ecosystem, e.g. LoftyAI -real estate and launching by September 18th, OPULOUS — a new, revolutionary platform to support music artists with DeFi loans and funding through selling of their music IP rights through NFTs

Final Premise: “Talent wins games, but teamwork and intelligence win championships”

ALGORAND leadership and team collaboration almost guarantees future success. Of course, we all know Silvio Micali, the godfather of Crypto, Turing Award winner and inventor of Zero-Knowledge Proof. However, the rest of the team is absolutely stellar and includes accolades of: 1 Nobel Prize winner; 2 Godel Prize Winners; 5 awards in computer science, cryptography, and distributed computing; 12 PhDs; 9 World’s Best Research Universities represented.

ALGORAND is the ‘Google’ of blockchain and is poised to become a household name as the utility blockchain for CBDC, Stablecoins, Securities, Derivatives and retail exchange of digital assets.

On behalf of the Algo Gang Originals, we hope you enjoyed this backgrounder about ALGORAND.

We are bringing our NFT series to the ALGORAND blockchain to help raise awareness on how cool ALGORAND is!

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