Algorand and Enterprise Solutions

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Coinmonks

6 min readApr 20, 2022

“If you have no doubt in what you are about to do, you are not pushing yourself hard enough.” — Silvio Micali

Blockchain is an exciting new technology that has the potential to disrupt conventional economic and commercial paradigms, comparable to how innovations like the steam engine and the Internet spurred previous industrial revolutions. It has the potential to boost productivity across a wide range of industries, including finance, energy markets, supply chains, intellectual property management, “virtual enterprises,” the public sector, and more. Its capacity to lower transaction costs, infuse efficiency into current value chains, challenge revenue models, and open new markets by disintermediating, improving transparency, and increasing auditability. And blockchain could be especially useful in emerging market economies. However, the technology is still in its early phases of development, and substantial technological and regulatory obstacles and hazards must be overcome before it can be widely adopted. Scalability, interoperability, security, transition costs, data privacy, and governance are all issues that need to be addressed.

What is Algorand?

Thanks to its Pure Proof of Stake (PPoS) algorithm, which was designed by MIT Professor Silvio Micali — a top computer scientist and cryptography specialist — Algorand is in a unique position to accelerate the revolution of financial services.

Algorand is a blockchain platform and a digital currency. The Algorand platform is built to process a wide range of transactions quickly, much like large payment processors such as Mastercard and Visa. Other cryptocurrency and blockchain-based projects can be hosted on Algorand, making it a more comprehensive solution than Ethereum. The platform’s native currency, ALGO, is used to secure the Algorand blockchain and pay transaction fees for ALGO-based transactions. Silvio launched Algorand in 2017, a fully decentralized, secure, and scalable blockchain that serves as a common foundation for developing products and services for a borderless economy. Silvio oversees all Algorand research, including theory, security, and crypto finance.

Decentralized Finance (DEFI) is the fastest-growing industry in the blockchain ecosystem, but it still has a lot of untapped potentials. Developers in the blockchain ecosystem are creating complex decentralized applications for a variety of financial use cases, intending to create a viable alternative to traditional financial institutions. These applications span from simple transactions (such as peer-to-peer payments) to far more complex and multiparty applications including loans, asset trading, insurance, exchanges, asset tokenization, and more. The financial industry is largely reliant on traditional contractual agreements, which frequently enlist the help of trusted third parties to verify the compliance of requirements contained in the agreement’s accompanying papers. For today’s financial institutions, this system is outmoded, slow, and, most significantly, inefficient. Algorand’s smart contracts are simple lines of code that are recorded on a blockchain and run automatically when certain conditions are met, allowing developers to create extremely scalable, secure, and low-cost decentralized apps. Smart contracts have increased the use of blockchain technology and contributed to the growing momentum of the DeFi industry as a whole. They are a vital tool for all blockchain developers.

Blockchain, a thriving sector.

The enterprise blockchain space has grown at a breakneck speed. Revenues have grown 3.5x over the last 12 months and start-ups are on track to raise Series A and B rounds. Growth is driven by a combination of seasoned founders leading solid teams and selling mature products to educated businesses ready to adopt blockchain solutions.

As seen in the KPIs below, B2B blockchain start-ups have grown significantly in the previous 12 months. A combination of three causes is driving this acceleration:

(1) Blockchain start-ups have honed their product-market fit and demonstrated excellent revenue growth with shorter sales cycles. To scale, founders are increasingly concentrating on raising Series A and Series B rounds.

(2) Businesses, large and small, are becoming more aware of blockchain and are eager to employ it in the same way that they would other technologies.

(3) Experienced entrepreneurs, high-level executives from the world’s leading corporations, and experienced developers have all flocked to the industry.

Employers are looking for blockchain experts.

Surprisingly, according to a LinkedIn survey on the most in-demand hard and soft talents for 2020, Blockchain not only made the list but topped it. Furthermore, Indeed, a job-posting website reported a +116 percent growth in crypto and blockchain job ads between September 2020 and July 2021. Furthermore, job advertisements in the field have expanded beyond traditional mining and trading activities, with companies beginning to hire support roles such as human resources and marketing, indicating that the industry is developing. Employers will undoubtedly place increasing importance on the ability to comprehend and implement blockchain technology.

Market conditions that are favorable for enterprise solutions.

The infrastructure for buying, selling, and holding cryptos was intended for simple needs in the early days of cryptos, primarily for retail investors. The primary plays to grab a value from this retail-driven demand were exchanges and custodians. The overall market value of the crypto world expanded from zero to nearly $1 trillion by the end of 2020, a number that piqued institutional capital’s interest, especially at a period of monetary and fiscal stimulus in an already low-yielding environment. In an existing low-yield market climate, the years 2020–21 have been important for the crypto market, driven by the economic repercussions of the Covid-19 issue. Market conditions are favorable for institutional capital to gradually move into this nascent asset class, with attractive yields in DeFi (Decentralized Finance) compared to TradFi (Traditional Finance), ranging from 3–4 percent on stable coins (crypto pegged to the USD) to 10%+ by providing liquidity on DEXes (Decentralized Exchanges).

Top sectors & enterprise use cases.

The business blockchain landscape continues to be dominated by fintech. Government and consumer pressures are pushing adoption in the Energy & Natural Resources domain, with Food & Agriculture rounding out the top three. Similarly, this year has witnessed a significant increase in the use of NFTs, with many prospects still available. We also look at new blockchain applications in the film business, internet advertising, and NFTs.

In terms of blockchain application cases, fintech has maintained a solid lead. Fintechs continue to dominate the business blockchain scene, as witnessed last year. This trend is expected to continue, as financial institutions, regulators, and central banks have warmed up to the concept of employing blockchain technology for a variety of applications, including replacing cash and modernizing aging infrastructure. Central bank digital currencies, while still years away in Western countries, might be a game-changer for many start-ups that now produce their tokens or haven’t fully automated their payment processes. Growth in the Energy & Natural Resources domain, as well as Food & Agriculture, are the most significant changes we’ve seen this year. Clients, end customers, and governments are putting additional pressure on suppliers to provide more transparency, comply with ESG requirements, and minimize CO2 emissions.

From the other hand, NFTs are gaining popularity. It would have been difficult to get through 2021 without hearing about NFTs or reading about new sales records. As a result, many high-profile investors have flocked to NFTs projects, resulting in very attractive values. Despite rising sales, NonFungible.com, the largest NFT statistics resource, reported that 421,578 active wallets were trading NFTs on the Ethereum blockchain in Q3 2021. While NFTs are now well-known, the exchange of such digital assets has yet to reach the general public, and there is still significant space for growth in this area.

“Blockchain is moving beyond cryptocurrency, and it is worth paying attention — especially since successful prototypes show that blockchain, also known as distributed ledger technology, will be transformative.”- Julie Sweet

Continue to construct…

References:-

1) https://ecosystem.algorand.com/

2) https://www.algorand.com/resources/blog

3) https://algorand.foundation/governance

4) https://spectrum.ieee.org/its-a-good-time-to-be-a-blockchain-developer

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Algorand and Enterprise Solutions

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Written by Ashen Bandara