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Cosmos (ATOM) vs Algorand (ALGO): Which Is The Better Investment?

I think of this particular battle of the blockchains as the internet of blockchains VS the future of finance.

Cosmos and Algorand are decentralized platforms that strive to become faster, easier, and more practical to use. They both utilize new technology like interoperability, but Algorand may have an edge as they are functioning as the bridge from centralization to decentralization.

 In this article, I will compare their tokenomics and ingenuity to solidify my speculation on what is the better investment.

BTW: If you need a complete strategy for investing and trading Bitcoin or Ethereum, you need to check out these two articles:

My Personal Bitcoin Investing & Trading Strategy

Ethereum Trading And Investing Strategy – What I Personally Do

What Are Cosmos And Algorand?

Cosmos is deemed the internet of blockchains because they are an ecosystem of blockchains that are interoperable. They are a project launched in 2019 (with white papers published in 2016) that works on speeding up blockchain transactions, lowering fees, and eradicating scalability problems. They want blockchain creators to experience less complexity and more ability.

Cosmos’s purpose is to simplify and connect blockchain technology to developers by taking out the enigmas of decentralized apps. They believe that communication between co-existing blockchains is essential to a free crypto world so there won’t be a reliance on only one block. Originally, blockchains transacted slow and could never share information with each other.

Their website says: “Cosmos is an ever-expanding ecosystem of interconnected apps and services, built for a decentralized future.”

ATOM is their native cryptocurrency.

Algorand is yet another blockchain high-speed-low-fee-innovator that went live in mid-2019. Their website promotes: “Algorand is the future of finance, disrupters of sports and gaming, modernizing the creator economy, and empowering national initiatives.”

What that really means is, Algorand wants to bring trust and mass adoption to a decentralization system that is easy to use.

Algorand has goals to enable everyone a way to exchange value efficiently, transparently, and securely. They also have functioning interoperable technology. Read this article to see how they solve the complicated “Blockchain trilemma”.

ALGO is their native cryptocurrency.

How Are Cosmos And Algorand Similar?

  • OPEN-SOURCE. Algorand and Cosmos are open-source, meaning that the community can contribute to creating new and useful tools to improve their developments.
  • MULTI-USE. Both are platforms for building decentralized apps and both are cryptocurrencies.
  • CONSENSUS. Cosmos and Algorand both use proof-of-stake (PoS) to confirm transactions.
  • MINING. According to coinmarketcap, Cosmos and Algorand cannot be mined.
  • SCALABILITY. They concentrate on providing easier methods for mass adoption, solving congestion, and speed problems.

How Are Cosmos And Algorand Different?

  • MARKET CAP RANK. As of early October 2021, ALGO is ranked 16th on coinmarketcap while ATOM is in 22nd place.
  • MAX SUPPLY. ATOM has a max supply of 260,906,513 and ALGO has no listed max supply that I’ve seen (listed total = 260,906,523).
  • SPEED. Algorand’s transaction speed is 5 seconds while Cosmos is a close 7 seconds.

Tokenomics And Price History Of Cosmos And Algorand:

Algorand:

  • Max supply: 10 billion

  • Total Supply: 6,676,360,526

  • Token: ALGO. By the year 2030, 99% of tokens are to be in circulation.

  • Incentives: Coins can be staked for rewards; Currently on Ledger, 5-6% annual yields are possible.

  • Token distribution: 3 billion into circulation, 1.75 billion for rewards, 2.5 billion for node runners, 2.5 for internal foundation, 0.25 for end user grants

  • Inflation: The rate of inflation is quite high. However, as they reel in more stakers and developers, the network becomes more secure–thats good because then the people can trust it more and use it more.

When I look at Algorand’s chart history, without getting technical, I see that is has had more volatility and potentials to earn more through its beginning periods (if you strategized well). From February 2021 to May it had some major peakage and then swooped into the valleys for some months, similar to Cosmos. We are still in the last leg up of the bull run and it will be very interesting to see if ALGOS prices will 4-6X in the following months.

Cosmos:

  • Total Supply: 260, 906,513; Seems to be no max supply 
  • Token: ATOM. 20% distribution amongst founding companies and 80% to left available to investors.
  • Incentives: Coins can be staked for rewards; Currently on Ledger, a whopping 8-10% annual yiels are possible.
  • Inflation: A higher rate of 7-20% was set in place to incentivize users into staking their tokens. Rates fluctuate depending on the overall staking percentage (goal of maintaining at least 66% staked).

Chart history shows that ATOM launched with no incredulous pumps and used the sideways action time to strengthen their technologies. Finally, at the start of 2021, they had some tremendous moves, making investors a heap of money! And like all crypto, they had a healthy correction of 50-60% downward – BUT not too long after they recovered to break all-time highs. According to Start It Up, targets of staking overall reside around the 66% range and inflation rates will raise/lower accordingly to encourage holders to contribute. 

How far can we go depends on so many things: Fundamentals, technicals, bitcoin, and the media.

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Now, there are numerous more factors to consider, but I’ve covered enough to speculate on the…

Future Outlook For Algorand And Cosmos:

ATOM and ALGO both understand the importance of interoperability and both want a prolific future in decentralized finance.

Will they make “sick gains” for you?

So far, according to tradingview, here are percentages increases from Oct 2020-Oct 2021:

ALGO = 499% increase

ATOM = 698% increase

That’s pretty good and pretty close.

Cosmos’ Future: They could be what connects all the blockchain together ultimately. With their protocol, consensus, and development kits, they enable globalized interoperability that can allow easy-to-build blockchains that are made for users and governed by users. Everyone wants reliable, fast, and easy-to-use blockchain technology.

Algorand’s Future: ALGO basically has similar expectational visions of DeFi and they’ve created an interoperable ecospace too, but how will they stand out when there are so many other competitors. Is the CeFi-DeFi bridge they’re creating actually going to be helpful? I think so. If they dumb down smart contract explanations enough to be understood by centralized moguls, there is a good chance they may leave the dark side–we need all the support we can get!

Another thing that helps both of their popularities is the ability to create NFTs on their platforms. Yes, those trendy, nifty, magical, incredulous, impracticable, and sometimes laughable NFTs!

In the crypto space, NFT’s are the new craze. At first, I thought of it to be a little silly but then I found some use-cases. Check out my article, NFT VS DeFi. But the fact are in, the winner will have all the bells and whistles the market demands.

BTW: you might want to check out these articles as well:

Cosmos (ATOM) vs Solana (SOL): Which Is The Better Investment?

Cosmos (ATOM) vs Cardano (ADA): Which Is The Better Investment?

Conclusion:

I know it is kinda laborious to figure out which project will do the best when they both are fighting for similar decentralized things with similar ideas.

Which one’s a better investment?

In my crypto opinion, I would invest more into ALGORAND (short and long term) for three reasons:

  1. Silvio Micali is the founder of Algorand. Coinmarketcap says: “He is a recipient of the Turing Award (in 2012) for his fundamental contributions to the theory and practice of secure two-party computation, electronic cash, cryptocurrencies and blockchain protocols.” THIS MAKES ME BUBBLE WITH JOY because he’s been in the game pre 2012 and has accolades that scream future of finance.
  2. They are partnering with centralized entities to convince them to “join the force” while still maintaining a decentralized philosophy.
  3. Transactions are confirmed in 5 seconds (only 2 seconds faster than ATOM but hey, people love that)

Both Algorand and Cosmos are progressively pushing the limits but, strictly speaking of profit potential, I usually go with the one in the lead – from my research, I’ve concluded that is Algorand.

I believe Cosmos will remain ranked in the top 30 for quite some time, but it might take them a bit longer to catch up to Algorand with Silvio’s crypto resourcefulness. I’ll keep an eye on them and will most likely spread my risk amongst them.

There you have it. I hope you’ve gained some value and learned more about ALGO and ATOM.

Trade wisely my fellow crypto fanatics!

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