Touted as “the world's greenest blockchain” and often referred to as an “Ethereum killer,” Algorand's network offers a fast, low-cost platform for smart contracts. You may have seen Algorand's name at your favorite sporting events in recent years, as the foundation behind it sponsors everything from chess championships to electric car racing to the FIFA World Cup.
However, interest in Algorand is not always positive. The cryptocurrency has taken a deeper price cut than others like Ethereum, Cardano, and Tezos in the current cryptocurrency winter.
Is Algorand a buy after this huge price drop, or should you turn your attention to other cryptocurrencies right now? Let's find out.
What sets Algorand apart from its rivals?
Like other major platforms, Algorand offers a unique profile in terms of computing power, transaction speed, security and environmental impact. Project Algorand has a strong focus on environmentally friendly operations and the blockchain network is carbon neutral or even carbon negative.
That said, Cardano and Tezos are also banking on green marketing and operations. Moving to transactions per second, Algorand is faster than Ethereum and Cardano, but slower than Tezos or Solana. So far, Algorand doesn't stand out as an overall winner.
On the other hand, Algorand's blockchain design is based on a single transaction settlement system and two separate ledgers, and some cryptocurrency industry observers are calling it one of the most secure digital assets currently on the market. Additionally, Algorand's app development platform has earned acclaim from developers and reviewers, as it combines a powerful smart contract system with easy-to-use writing tools.
Algorand's average transaction speed is a trade-off with outstanding data security and an easy-to-develop platform. Therefore, the long-term value of the blockchain network will depend on its ability to attract developers and their projects, followed by successful product launches in mainstream decentralized finance (DeFi) solutions.
In this regard, Cardano boasts more than 5.000 active smart contracts, while Tezos stops at around 600. Ethereum clearly wins the comparison with almost 1,5 million active contracts. Algorand looks inferior again, with about 700 active contracts, and the most important development projects appear to be clones of solutions originally launched on Ethereum.
Not a good situation for Algorand
The more I read about Algorand's position in the current DeFi market, the less impressed I am with the cryptocurrency. Additionally, Google Trends showed no spike in online searches for the cryptocurrency's name around the FIFA World Cup, even though the Algorand logo was featured on the world's most-watched televised sporting event.
In other words, it hasn't been easy for Algorand to create the media hype he needs to land other projects. The Algorand Foundation may need to retool its marketing strategy to remain competitive.
I'm not going to sell my handful of Algorand tokens in a rage, but I'm also not inspired to buy any more right now. Before you hit Algorand's "buy" button, there are too many objectively successful cryptocurrencies to consider. For example, today I would prefer invest my funds in Ethereum or Polkadot, as I expect to see their names in many more development projects in the long run.