Motley Fool contributor Chris MacDonald talks about why Algorand (CRYPTO:ALGO) made his list of top cryptocurrencies to watch. This episode of “The Crypto Show” was recorded on Oct. 20. Motley Fool analyst Eric Bleeker is also in this clip.
Eric Bleeker: Let’s go to your third favorite, which is Algorand, I think one thing that you like about this, which I had earlier, was an early leader in proof-of-stake.
Chris MacDonald: Yeah, I think the proof-of-stake space — we touched on that a little bit earlier — it’s really intriguing for investors thinking about how cryptocurrencies in general and crypto networks are going to where they’re moving, where they’re headed in terms of the future. Algorand’s position as being one of the first proof-of-stake networks is certainly intriguing and that’s one of the reasons why it’s grown to be a top 20 Crypto by-market cap.
Today, I was saying it was number 19, which is incredible. It was I think around 50 about a month ago. So it’s moving up the rankings quickly for a reason.
It’s built on what’s called a pure proof-of-stake consensus protocol. Similar to other Alt Coins — Ethereum (CRYPTO:ETH) is moving in this direction with various updates that are coming up — but Algorand is further ahead in this regard. It was one of the first.
I think the other thing with this is it’s cheaper and quicker to use relative to other altcoins. There is an advantage to Algorand relative to other proof-of-stake cryptocurrencies. It’s such a new space that it’s hard to compare and contrast right now. But Algorand is widely considered to be a proof-of-stake model that is more secure, more decentralized than other mechanisms.
One of the reasons for that is basically anyone can choose to be a part of the consensus mechanism. There’s two parts to it as I understand it. There’s the staking piece which is just putting your cryptocurrency up for the networks to validate the blocks. Then there’s the actual consensus mechanism. But on Algorand is a little bit different from the other ones in that everyone that stakes has the option of being a part of that consensus mechanism. By doing so, even someone who has one Algorand token can be a part of that. It makes it a lot safer because a hacker coming in trying to target the validation process will have a very difficult time figuring out who could be randomly selected to be part of that protocol.
To me, that’s intriguing, it’s a rather secure network and it’s a burgeoning place for stablecoins, NFV, other projects like that and it’s grown to be one of the largest, again, for a reason.
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