2021 was Solana's year. This dynamic cryptocurrency has risen more than 11.000% as more and more investors have decided to invest. And developers flocked to the blockchain. They have risen by nearly five to nearly 900, according to the recent report from the developers of Electric Capital.
Now, some investors are looking for the next Solana. By this, I mean a cryptocurrency that is bound to make gains in value, developers, and general use. And the cryptocurrency that could follow in Solana's footsteps is Algorand (quotation CRYPTO: ALGO). This player was up 416% last year. And the number of developers on the platform has increased to around 200 from just over 50 a year earlier, Electric Capital data shows. So, Algorand is clearly starting to pick up speed. Why do I think she can become as popular as Solana? Let's find out.
New validation methods
Algorand and Solana have a particular point in common. Both offer a new way to validate transactions. Solana uses the proof of history. This marks the data blocks with timestamps and, as a result, simplifies the validation process. Many blockchains use proof of participation. This offers validation power to those based on their holdings. But Algorand uses pure proof of participation. This means that validation power is randomly assigned to any stakeholder.
Algorand's system also optimizes the validation process. And, importantly, it promotes security and decentralization. Pure proof of participation means that validation responsibilities will not always go to the same group of senior shareholders.
A two-tier structure is another advantage for Algorand - this is because it reduces congestion and increases the speed of transactions. The first tier is the place for simple smart contracts and token creation. The second tier is meant for complex smart contracts and decentralized application development (dApps).
Right now, Algorand handles around 1.200 transactions per second. The next goal is to reach around 3.000 per second. Algorand is working to eventually increase to 45.000 transactions per second. And the transactions reach completion instantly.
A safe environment for NFTs
Another advantage of Algorand is the fact that it is "unforkable". This means that the network cannot split into an updated version. And this is a big plus for anyone who creates or collects non-fungible tokens (NFTs). This is because a bifurcation can result in duplicate NFTs or a loss of their value. A non-forkable blockchain can offer a safer environment for these assets.
Finally, many interesting projects are popping up on Algorand. Hence, it is clear that there are many real-world uses for this blockchain. For example, the Republic of the Marshall Islands chose Algorand to host its digital national currency. And Algorand is powering LiquidVineyards' platform to manage digital rights in the wine and vineyard industry.
Now, does all this mean that Algorand will follow Solana towards an 11.000% gain? Not necessarily. There is a lot of volatility in the cryptocurrency market. And the risk is high. But if we look solely at Algorand and what it has to offer, there is reason to be optimistic about the future of this cryptocurrency. And that means she could follow Solana's path when it comes to popularity and momentum this year.
