Looking back and looking ahead
2020 saw Algorand cement itself in the blockchain space. The platform improved its protocol, ensured better services, and focused on long-term growth and sustainability. Algorand is a smart contract platform that expands on the use cases of cryptocurrencies. The platform has grown exponentially and has seen several companies get on the platform. Why has Algorand witnessed a rush of companies rushing to it? The surge in growth can be attributed to the advantages that Algorand’s layer-1 smart contracts provide, along with a host of other functionalities, chief among them being smart contracts and atomic transfers. Over the past year, Algorand saw 500,000 daily transactions, and over 500 companies are currently developing their applications and protocols on the platform.
Algorand uses a consensus mechanism known as pure proof-of-stake (PPoS). PPoS allows transactions to achieve finality in seconds. PPoS is unique because it enables Algorand to effectively solve the blockchain trilemma to achieve scalability, security, and decentralization. In 2021, the platform hopes to continue its growth, whereas the developers hope to innovate and further improve Algorand’s core functionalities.
Algorand measures its performance against the following:
- Block proposal time – Block proposal time is the time taken for observers to become aware of which block is a candidate to be added to the chain.
- Block finalization time – Block finalization time is the time needed to add a new block to the chain.
- Transactions per second – As the name suggests, this is the actual number of transactions that take place each second.
The Algorand platform aims to improve its performance metrics in 2021, as follows:
- Block proposal time – The platform will keep its block proposal time at the current level, which is 0.5 seconds. However, the block size will grow from the current 5,000, up to 25,000 transactions.
- Block finalization time – Algorand aims to reduce the block finalization time from 4.5 seconds to 2.5 seconds.
- Transactions per second – In 2021, the platform aims to grow its number of transactions per second from 1,000 TPS to 46,000 TPS.
Algorand hopes that these improvements will help it achieve a permissionless and decentralized network that improves upon the drawbacks of first-generation blockchains.
Exploring the Overall Cryptocurrency Price Trend
Cryptocurrencies are currently undergoing a bull run, leading to rapid price increases for most of the market’s coins.
Being led by Bitcoin, the largest and most popular cryptocurrency, the current bull run has defied predictions and has seen Bitcoin break the $40,000 mark, reaching a record-breaking $41,700 at press time.
While Bitcoin may be catching everyone’s attention, it should be noted that all digital currencies are rallying as investors are pouring in money into cryptocurrencies. Algorand’s native currency, ALGO, has seen considerable growth as well. ALGO has inherent value thanks to its association with Algorand, making it a lucrative option for trading, but also for value storage and payment purposes.
ALGO price overview
Algorand’s current market capitalization is estimated at $372 million, with a 24H trading volume averaging $325 million at press time. ALGO has been capped at 10 billion tokens, making it a fixed supply coin. Currently, there are 2 billion ALGOs in market circulation.
What are the historical price trends of ALGO?
The ALGO token has seen its fair share of volatility with frequent and unpredictable price fluctuations. The token started trading at an initial price of $3.07 but was unable to hold this price. It saw a downtrend until it reached stability at around $0.25. ALGO’s price is also correlated to the value of other cryptocurrencies, which is the case for most of the market’s popular coins. If we look at the long-term picture regarding ALGO, we can see that ALGO has had a stable price without significant price fluctuations once it settled around its current value. Algorand’s peak market capitalization occurred in August 2020, when it touched $577 million. This was attributed to Agorand’s ongoing projects and initial hype for the project.
ALGO/USD price analysis
The chart featured below showcases the 24H evolution of the ALGO/USDT pair. The abrupt price increase is likely fuelled by bitcoin’s on-going bull run, but also by Algorand’s recent developments. ALGO reports a 24H low of $0.41 alongside a 24H high of $0.50 on the 8th of January, 2021.
The following chart highlights ALGO’s evolution against the USD during the previous year. While it quickly becomes apparent that volatility made its presence felt, it’s also easy to see how stable ALGO has been over the long run. The on-going bull run looks incredibly bullish for ALGO, with analysis suggesting that it could soon surpass its yearly high of $0.67, previously attained in late August 2020.
Short-term price trends fuelled by the on-going crypto bull run
Given the on-going evolution of the cryptocurrency market, short-term predictions are difficult to attain. If the crypto bull run continues, then ALGO is very likely to exceed the $0.70 value within the next couple of days. Many also speak about the commencement of the alt season, which is described as a bullish event for altcoins, since most are expected to grow in value. Regardless of how the market evolves during the short-term, it is very likely that ALGO will not fall below its previous resistance point situated around the $0.30 mark.
Long-term price trends fuelled by platform value and partnerships
One of Algorand’s stated goals is to ensure the protocol’s long-term stability and sustainability. The ALGO token’s price is directly influenced by the Algorand blockchain and the projects based on this chain. As such, the Algorand blockchain has a thriving DeFi ecosystem, better and more performant than that of its peers. The platform has also solved the blockchain trilemma, offering security, scalability, and decentralization, without having to sacrifice either one of these benefits. As a pure proof-of-stake blockchain, Algorand provides transactional finality in mere seconds.
It is for these reasons that several next-generation platforms have chosen Algorand as their platform. Such an example is Instmatch Global, a company aiming to advance institutional settlement and payment solutions worldwide. By basing its protocol on the foundation provided by Algorand, Instmatch will bring an unprecedented degree of efficiency to payments, Islamic banking, and RegTech.
In the future, we will see more projects choose Algorand as it continues to improve and innovate, while offering a robust alternative to other DeFi platforms. Algorand has also partnered up with other organizations, like ISDA, Realio, or Coinbase, and is thereby pushing the next generation of financial products, wallet support, micropayment facilities, and instant transactional confirmation.
Based on everything that has been highlighted so far, Algorand is quickly becoming the go-to platform for next-generation projects. In return, this will likely drive ALGO’s price to new heights, perhaps even surpassing its previously-attained price record. ALGO has inherent short-term and long-term value, so despite random spikes of volatility, its price will likely continue on a long-term path of value growth.
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