Cryptocurrency Defends $60 Million Not-an-ICO After 56% Price Crash
Algorand had its successful first auction last month, leaving its closing price at $2.40. It currently trades on cryptocurrency exchanges such as Binance for just over $1.
Algorand employed a Dutch Auction, which means traders don’t know how much they’ll get until the auction ends. The only thing the investor can initially be sure of is how much they’re investing.
Algorand Price Drops 56% After Cryptocurrency Token Sale
Algorand is one of a growing number of blockchain platforms that will provide functionality to companies investigating the nascent technology.
Other efforts like IOTA have managed to snag partnerships with companies like Jaguar Land Rover – thus far, it seems anything is possible.
Erstwhile, significant crypto platforms like Tron and Ethereum enjoy extensive usage.
Google and Microsoft even support Ethereum.
Cryptocurrency gains value in a few ways.
ICO? What ICO?
For many coins, the opening price is an essential measuring stick.
Some, like Litecoin or Bitcoin, had no determined opening price.
The amount that people collectively invested, divided by the number of tokens issued, spells out the opening price of the token in question.
The next way that a coin gains value is if it’s in high demand. Tron and others experience this due to their heavy usage. Bitcoin experiences this for several reasons, its vast liquidity and market exposure not the least of which.
Bitcoin is a global brand, which leaves the field of alternatives wide open.
Ignacio Hagopian, an ambassador for the Algorand blockchain project, took the liberty of authenticating the token’s first public sale (what was once called an “ICO”).
In a new article, Algorand Ambassador @ignaciohagopian gives insight into the transparency of our inaugural auction by explaining a step-by-step procedure that checks the published auction result. Check it out! https://t.co/vdxf7YAcMY
— Algorand Foundation (@AlgoFoundation) July 8, 2019
Algorand used the Dutch Auction model to distribute the Algo and raised $60 million in under four hours.
Hagopian, who is biased, used scientific methods to outline why the distribution was not only fair but superior to other
initial coin offering token distribution models.
“Even if the Algorand Foundation website is hacked and someone tries to trick people into thinking that the result is now different by supplying a new fake auction1.outcome file, it can easily be spotted since the hash of this file wouldn’t match the one committed to the Algorand blockchain. Since a blockchain is an immutable data-structure and forking isn’t possible by design, the auction1.outcome can’t be changed and continue to match with the committed hash.”
Algorand skips the proof-of-work phase that Ethereum will eventually exit, and is immediately a proof-of-stake blockchain.
This means that initial investors who hold their coins properly will facilitate transactions on the network.
Another Month, Another Cryptocurrency Platform
New investors can do the same, earning tokens similar to block rewards in other blockchains.
Algorand’s whitepaper says the blockchain is resistant to “tampering,” also known as “reorganizing,” which is possible on proof-of-work blockchains like Bitcoin. Algorand employs the proof-of-stake mechanism, which makes computing power “negligible.”
There’s no telling how many blockchains will emerge over the long haul. Algorand is the latest in a string that includes a growing list of notable efforts:
• Binance Chain
And many, many more.
Competition may be healthy for the crypto market, but eventually, most industries will likely consolidate around a small number of leading platforms.
Since its opening, Algo has dropped from $2.40 to a press time trading price of $1.05.