Ethereum (ETH) vs Algorand (ALGO): Which Is a Better Network?
Ethereum and Algorand are both top proof-of-stake (PoS) crypto networks. However, Ethereum is much older since it was launched in 2013 while Algorand was launched in 2019.
The two networks however have a lot in common since they are both PoS networks. They support decentralized applications, decentralized finance (DeFi), and non-fungible tokens (NFTs). In short, they are among the networks driving the web3 revolutions.
As similar as they are though, there are fundamental features that make them different from each other. Our goal in this guide is to highlight these differences and the unique features of each blockchain to help you choose which may be best for you.
What Is Ethereum?
Ethereum is the second largest crypto network by market capitalization and the largest PoS network. Launched in 2013, the network has grown to become the go-go platform for all things smart contracts and decentralized applications.
It was on Ethereum that DeFi and NFTs also first launched, making it a real leader in the PoS space. Though it was originally a proof-of-work (PoS) network, it recently transitioned into a PoS network in order to improve in its delivery.
However, the network still suffers setbacks despite its transition to PoS. The setbacks include slow transactions due to low scalability, and exorbitant transaction fees. There have been several upgrades on Ethereum aimed at tackling these problems but they haven’t worked just yet.
There are other upgrades lined up for the future, which hopefully will make the network more efficient and less costly to use. Ethereum has a native token known as ETH or ether. This token is used to pay for transaction fees on the network
It is also the staking currency for securing the network. Because of its PoS status, the network relies on validators who are node operators that help to verify transactions and secure the network by staking their ETH.
ETH also serves as a governance token, as holding it is one of the requirements for participating in the governance of the network by voting on changes that may be implemented on the network.
ETH has a total supply of just over 120 million premined tokens, all of which are already in circulation. It is also a valuable token for investment, as its value has risen sharply since 2019.
What Is Algorand (ALGO)?
Algorand is a PoS network that is decentralized and self-sustaining. The network supports a wide range of applications, owing to its scalability and efficiency. The network also has a robust security architecture that makes it a reliable PoS platform.
The network was created specifically as an alternative to slow and expensive networks like Bitcoin and Ethereum. It therefore offers much faster transactions that cost much less than what most networks can boast of.
As a PoS network, Algorand relies on validators who are node operators that help to verify transactions and secure the network through staking. This is where its native token, ALGO comes in.
The token is used as the staking token for the network to secure it. ALGO is also used to pay for transaction fees on the network. It is also used as the governance token that allows holders to vote on new developments on the network.
ALGO has a total supply of 10 billion tokens, and a circulating supply of over 8 billion. This makes it almost ten times the total supply of ETH, and is currently the 64th largest asset by market cap.
Which Is Better?
Ethereum has established itself as the leader in the PoS space, and that is a position that will be difficult to snatch. However, the issues of scalability and cost of transaction is still a concern.
If you’re looking for a fast network to use, Algorand will be perfect. However if you’re looking for security and reliability, Ethereum has established itself more in this regard, and ETH remains a better investment asset than ALGO.
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