Algorand (ALGO)

What is Algorand (ALGO)?

Algorand is a cryptocurrency and blockchain similar to, and competing with, other well-known blockchains like Ethereum, Cardano, and Solana. It was designed to combine high speed, low costs, and strong security—without sacrificing decentralization. Algorand is built to handle quick transactions in under five seconds while using very little energy. Its mission is to be a “green” blockchain suitable for everything from digital payments to advanced smart contracts. In 2022, it was certified as carbon-neutral.

The cryptocurrency ALGO is the native token of the Algorand network and functions as “fuel” for the entire system, used for payments and rewards. This is similar to ETH on Ethereum, SOL on Solana, or ADA on Cardano. Today, ALGO is among the 100 most valuable cryptocurrencies in the world. By investing in ALGO, you are betting that Algorand will succeed in attracting new users and increase demand for ALGO.


Background and History

  • Launch year: 2019
  • Founder: Silvio Micali, MIT professor and Turing Award winner (often referred to as the “Nobel Prize of computer science”).
  • The idea: Micali wanted to solve the so-called “blockchain trilemma”—the challenge of achieving decentralization, security, and scalability all at once. Many projects sacrifice one of these to achieve the other two.
  • Key milestones:
    • 2019: Algorand blockchain went live.
    • 2020: Support for smart contracts (programs running on the blockchain).
    • 2021: Launch of DeFi projects and NFT marketplaces.
    • 2022: Certified as a carbon-neutral blockchain.

How does Algorand work?

Algorand runs on its own blockchain and uses a unique consensus method called Pure Proof-of-Stake (PPoS).

  • Instead of using energy-intensive mining (like Bitcoin), Algorand randomly selects validators from those who hold and stake ALGO.
  • This makes transactions fast (around 4–5 seconds) and predictable in cost (usually less than one krone/cent).
  • The technology ensures the chain never forks—there is always a single “true” version of transaction history, simplifying usage for banks, businesses, and governments.

Algorand also supports smart contracts, allowing developers to build apps such as DeFi exchanges or NFT marketplaces.

What makes Algorand special?

  • Energy-efficient: Carbon-neutral blockchain with very low energy usage.
  • Immediate finality: Transactions cannot be reversed once confirmed—no waiting for extra blocks as with some competitors.
  • Strong academic foundation: Created by one of the world’s most recognized cryptographers.
  • Real-world use cases: Used by El Salvador for infrastructure and in projects for central bank digital currencies (CBDCs).

Future plans

According to the Algorand team, their roadmap includes:

  • Energy-efficient: Carbon-neutral blockchain with very low energy usage.
  • Immediate finality: Transactions cannot be reversed once confirmed—no waiting for extra blocks as with some competitors.
  • Strong academic foundation: Created by one of the world’s most recognized cryptographers.
  • Real-world use cases: Used by El Salvador for infrastructure and in projects for central bank digital currencies (CBDCs).

The role of ALGO – what is it used for, and why does it have value?

ALGO is the native cryptocurrency of the Algorand network and acts as the money for the entire system. It is used for:

  • Transaction fees – all payments and transfers on Algorand are paid in ALGO.
  • Staking and consensus – by holding ALGO, users can participate in the Pure Proof-of-Stake process that secures the network. Stakers can earn additional ALGO as rewards, similar to earning interest in a bank.
  • Payments and transfers – ALGO can be sent directly between users as a fast and low-cost digital currency.
  • Ecosystem participation – some dApps on Algorand require ALGO to access services, buy NFTs, or join DeFi products.

Why does ALGO have value?

Its value comes from demand for using the Algorand network. The more the platform is used for payments, smart contracts, NFTs, or financial services, the higher the demand for ALGO to pay fees, stake, and access apps. The limited total supply of 10 billion ALGO also creates scarcity.

Factors that could positively impact ALGO’s value:

  • Increased real-world use in DeFi, NFTs, and government projects.
  • More partnerships with banks, governments, and large companies.
  • Technological improvements that increase speed and ease of use.
  • A growing developer community and more popular dApps.
  • A rising focus on sustainable blockchains, where Algorand is already positioned strongly.
  • Being a relatively young and lesser-known cryptocurrency gives it significant growth potential if it succeeds.

Inflation

New Algorand tokens are gradually released into the market. For example, users contributing to the network are rewarded with ALGO, which increases the circulating supply.

  • Total supply: 10 billion ALGO.
  • ~87% already in circulation, meaning most have been released.
  • Current inflation rate: around 6–7% annually.
  • New tokens are released gradually via vesting, and inflation is expected to decline as the full supply is distributed.

At present, ALGO has significantly higher inflation than Bitcoin (~0.85%), Solana (~5%), and Ethereum (~0% and sometimes even negative inflation due to token burning). This means ALGO requires stronger demand growth (above 6–7%) for its price to increase. While this presents a risk, it also leaves room for higher growth potential compared to more established cryptocurrencies like Ethereum.


Why invest in ALGO?

Simply put: investing in ALGO is a bet that Algorand will succeed in attracting more users and driving demand for ALGO. If it manages to compete successfully with other blockchains, it has strong growth potential.

Algorand combines fast technology, sustainability, and real-world usage in large projects—a combination that is not very common in crypto. With its strong academic foundation and expanding real-world applications in both the public and private sectors, ALGO positions itself as a serious competitor to Ethereum, Solana, and others.


Risks and challenges

  • Strong competition from established smart contract platforms like Ethereum, Solana, and Cardano, as well as many smaller rivals.
  • Dependence on attracting more developers and users to grow its ecosystem.
  • Global cryptocurrency regulations may affect adoption.
  • Higher inflation compared to competitors requires strong demand growth to keep prices stable or rising.

Sources:

Kraken – What is Sui Network (SUI)? https://www.kraken.com/learn/what-is-sui-network-sui

Sui Documentation – Tokenomics & Concepts https://docs.sui.io/concepts/tokenomics

Binance Research – Built for Large-Scale Applications: Why Sui Stands Out https://www.binance.com/en/square/post/26964267410202

Grayscale Research – Why Sui Stands Out https://research.grayscale.com/reports/why-sui-stands-out

99Bitcoins – Best Sui Projects https://99bitcoins.com/analysis/best-sui-projects/

BingX – Top Crypto Projects and dApps in Sui Ecosystem https://bingx.com/en/learn/top-crypto-projects-and-dapps-in-sui-ecosystem

Tangem – Sui Ecosystem Tokens https://tangem.com/en/blog/post/sui-ecosystem-tokens/

Åsmund Holtan16/08/2025
Should not be considered financial advice. Crypto may involve high risk.