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Algorand, the carbon-negative protocol in the spotlight

Camilla Marziani

By Camilla Marziani

Investors have been watching Algorand (ALGO), the blockchain that wants to be decentralised, scalable, secure - and sustainable. But, is Algorand worth buying? Read more to find out about the talents of this protocol and its native coin ALGO.

Algorand in a nutshell

Founded in 2017 by Turing award winner Silvio Micali, with its native token ALGO, Algorand is a decentralised blockchain protocol of many talents. Now ranking in the top 20 cryptocurrencies by market cap, Algorand (ALGO) is permissionless, “forkless” and open-source, running on what its founder defined as a Pure Proof of Stake consensus mechanism and looks to be the first carbon-negative blockchain protocol.

Aiming to solve the “trilemma” of blockchains, Algorand wants to provide its users with a decentralised, scalable and secure blockchain protocol, all while being environmentally friendly and sustainable.

Algorand’s talents in detail

Joining the club of those altcoins that are offering solutions for bringing decentralised finance and smart contracts to the masses - also see Avalanche (AVAX) and Solana (SOL) - Algorand comes with numerous talents worth mentioning:

  1. Permissionless: the Algorand blockchain is open to anyone, without requiring the approval of any group of users or authorities.
  2. Open source: Algorand is a transparent project, meaning all information and developments are available to all interested parties.
  3. Pure Proof of Stake: in this consensus mechanism, every user staking at least one (1) ALGO can participate in the creation of blocks. In full PoS fashion, miners are not required to have special equipment and the energy consumption of the process is limited. Unlike traditional Proof of Stake, block creators are not chosen based mostly on their wealth, but instead, they are randomly selected. With Pure Proof of Stake, the probability of being chosen is proportional - but not limited - to their total amount of ALGO staked. This consensus mechanism is meant to increase decentralisation, as low-stake requirements make participation easy from anywhere. Also, security is elevated, because random selection represents a great obstacle for attackers.
  4. Forkless: one of the perks of Algorand’s consensus protocol is its immediate transaction finality. When one proposed block is chosen, the decision and the related transaction are final and can’t be changed. The mathematical likelihood of a fork has been proven to be so low that it’s not even worth considering.
  5. Carbon negative: running on Pure Proof of Stake instead of Proof of Work already limits the carbon footprint of Algorand, but the protocol decided to take sustainability to the next level. In fact, through its partnership with ClimateTrade, Algorand is compensating for its CO2 emissions and it is now a negative carbon footprint blockchain.

Algorand (ALGO) vs Ethereum (ETH)

As always, talking about DApps and smart contracts easily brings us to the second-biggest cryptocurrency, Ethereum. Like we do with all our tokens in the spotlight, let’s see how Algorand measures up to the crypto giant, given that the ETH 2.0 upgrade bringing the consensus from Proof of Work to Proof of Stake is still in the making.

How to get started with your research

When it comes to researching how to invest, it’s good to set the bar high. For cryptocurrencies and altcoins, a good place to start is the official website of the asset you’re researching, such as Algorand's official website. There you can delve into the protocol’s projects, use cases, and technical data, and find more to explore.

Also, don’t forget to think about what type of profits you are looking to generate from your assets. When you’re researching a coin, ask yourself how that crypto would fit in your investment portfolio, and whether you’re leaning towards low risk, long-term investments or you’re at ease with faster and (perhaps) profitable, but higher-risk investments.

Where can you buy ALGO?

At Bitpanda, ALGO is just a few clicks away via your smartphone or computer. Bitpanda’s easy-to-use interface makes investing in crypto and other digital assets easy as pie.

Camilla Marziani

Camilla Marziani

Global content specialist, blockchain enthusiast and coffee lover