How to Buy Algorand (ALGO) in 3 Simple Steps

What Is Algorand?

Algorand is a programmable blockchain network that supports high-performing, secure, and scalable applications. The project was designed to make transactions faster, cheaper, and more efficient.

Ethereum is still the most popular programmable blockchain for hosting decentralized applications (dApps), but it suffers from slow, costly transactions and a lack of scalability. Algorand, on the other hand, can handle more than 1,000 transactions per second, with each one costing less than a cent.

Algorand achieves this through a number of blockchain innovations, such as its Pure Proof of Stake (PPoS) consensus mechanism, which is far more efficient than Ethereum’s current Proof of Work system. The ALGO token is staked to earn rewards in the PPoS system and is also used to pay transaction fees.

This technology makes Algorand an ideal home for what it calls FutureFi—the future of finance. There are already hundreds of businesses and institutions building applications and services on Algorand. The network also supports the creation and distribution of Algorand Standard Assets (ASAs), which can represent a wide range of asset types, such as cryptocurrencies, securities, real estate, loyalty points, and non-fungible tokens (NFTs).

Ways to Invest in Algorand

People may purchase Algorand with different intentions. Whether their plans for the token are short-term or long-term is a matter of choice and both have the potential to be profitable.

Buy and hold Algorand

This is the simplest investment strategy there is and it involves exactly what the name suggests—you buy ALGO and hold onto it for a period of time. The advantages of buy and hold are its simplicity and the minimal amount of time and skill required.

Once you have purchased your ALGO, you will have the opportunity to grow your token holdings, as ALGO can be staked to secure the network and generate rewards in ALGO.

Best Algorand Wallets

Custodying your ALGO yourself can provide a bit of extra security and means you don’t have to rely on a centralized company for access to your tokens. This is why many investors choose to set up their own private wallets.

These could be software wallets, which are downloaded onto computers or smartphones and tend to be free and easy to use. Alternatively, ALGO holders can pay for a hardware wallet which is even more secure. Trezor, BitBox, and Ledger are some of the most popular providers of hardware wallets.

Trade Algorand

Like most cryptocurrencies, ALGO can often experience price volatility. This is something that traders can use to their advantage by buying and selling the token much more frequently than investors to generate more regular profits. This strategy, however, requires a greater commitment in terms of time and effort.

Those who opt for this approach often choose to use the web wallet provided for free by their trading platform. Although web wallets are less secure than software or hardware wallets, they are more convenient for regular traders.

Should I Buy Algorand Now?

This is up to each individual trader and investor, based on their own finances, goals, and research. ALGO has a capped max supply, which could potentially make it a good store of value in the long term.

There is demand for the token driven by the fact that it can be staked to earn a passive income. As ALGO is required to pay transaction fees on the network, there is also demand for the token from developers and users of Algorand-based apps. The demand for ALGO should therefore increase as the Algorand ecosystem and its user base grow.

An upcoming upgrade is due to improve the network’s capacity to more than 46,000 transactions per second. This, along with Algorand’s interoperability and innovations such as ASAs and Atomic Transfers, could potentially see Algorand become well-positioned to rival Ethereum as the top destination for blockchain applications.

Is Algorand a Good Investment?

Algorand’s suitability as a good investment depends on your investment goals, risk tolerance, and time horizon. Before buying Algorans, you must first understand it as not all assets with the moniker “Crypto” perform well.

As a crypto platform, Algorand is sound. The layer 1 blockchain is one of the few scalable enough to run production applications that can cater to millions of people with minimal performance lags.

However, the network has not seen wide adoption like Ethereum, Solana, or the Binance Smart Chain. One of the network’s major decentralized finance applications was recently shut down due to low volumes.

Nonetheless, several existing applications or businesses that wish to integrate blockchain mechanics opt for Algorand.

When looking for an opportunity to buy Algorand, you must know where you are in the crypto market cycle. The crypto market moves in four-year cycles, including two bullish years and two bearish years.

Generally speaking, the best time to buy crypto is when prices are low in the bear market.

Lastly, your risk tolerance plays a key role because risk-averse investors tend to shy away from crypto, and for good reason. The market is perhaps the most volatile of all financial markets, and only investors who can tolerate their investments losing significant portions in the short term will be able to hold on for the long term.

3 Tips to Buy Algorand

Consider Associated Costs

Buying Algorand includes the cost of the coin and purchasing it. These extra costs could include deposit, conversion, account management, or withdrawal fees for those who withdraw the coins.

Ensure you know the entire cost of buying the coin before doing so.

Get a Non-Custodial Wallet

If you intend to hold Algorand for an extended period, you may want to get a non-custodial crypto wallet. These wallets are not associated with crypto exchanges and usually store your private keys on your device or a private chip in the case of cold wallets.

They give you complete control over your coins; cold wallets are difficult to hack.

Don’t Buy all at Once

When buying ALgorand, avoid purchasing a lump sum unless you are sure the market is about to turn bullish or don’t mind suffering some losses in the short term (note that the short term could be the two bearish years).

A better alternative could be buying gradually over a set time frame to spread the cost, especially during bear markets.

Final Thoughts on How to Buy Algorand

We explored how to buy Algorand and chose eToro as the overall best place because of its regulatory compliance, low deposit limits, free deposits, and community of enthusiastic investors.

The platform also provides tools that allow investors to gain diversified exposure to Algorand by investing in a portfolio containing other coins curated around specific themes.

Although several platforms allow you to buy Algorand, consider the overall costs of buying the coin. Also, remember to be sure if you want to buy it. Avoid buying coins simply because they are “cryptos”.

If you intend to hold for a long time, it’s best to get a decentralized wallet that hands over total control to you, not an exchange as they are prone to breaches.

To buy Algorand, sign up for an eToro account.