ATOM vs ALGO: Making a Smart Choice

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This Article was Reviewed by The Chief Editor, Godfrey

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During the peak of the bull market, we saw the emergence of innovative blockchain projects that brought a breath of fresh air to the industry. Users that exchanged USDC to SOL at the right time were able to rake in considerable profits at the peak of the market. 

And while the industry is still led by giants like Bitcoin, Ethereum, and BNB, these have some underlying issues that hinder progress. 

Projects like Cosmos and Algorand have attempted to bring something new to the table and solve some of the recurring problems of the blockchain space. In this article, we take a detailed view of these two projects and their fundamentals. 

Cosmos vs Algorand

Cosmos vs Algorand Overview

CosmosAlgorand
TickerATOMALGO
Max SupplyN/A10,000,000,000
Circulating Supply286,370,2977,115,305,913
ConsensusTendermintPure Proof of Stake
Nakamoto Coefficient813
Market Cap$3,316,658,020$1,529,621,726

What Is Algorand (ALGO)?

Algorand was launched in 2019 by Silvio Micali, one of the most prominent academics in the blockchain space. His work on Algorand has the goal to solve the blockchain trilemma. In this regard, the protocol is aimed at becoming simultaneously decentralized, secure, and infinitely scalable. 

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To achieve this, the Algorand blockchain employs a pure proof of stake algorithm, with a very low threshold for participation. To participate in the validation of transactions, users need to hold only one ALGO token, allowing for a broad decentralization of the network. In comparison to Ethereum, where 32 ETH are needed to become a validator, Algorand is much more democratic. 

The protocol randomly chooses in the pool of validators — the reward mechanism is different from other blockchains. Instead of rewarding the block producers, the staking rewards are sent out to all ALGO holders that participate in the network. This incentivizes anyone to participate in the validation of nodes, pushing towards higher decentralization. 

Finally, note that Algorand is EVM compatible, allowing developers to easily port battle-tested dApps onto the chain. 

What Is Cosmos (ATOM)?

The Cosmos network pioneered the concept of the internet of blockchains. Through its Tendermint consensus mechanism, this protocol allows projects to build their own interconnected blockchains. Where Ethereum provided a platform for bespoke tokens, Cosmos does the same, but for blockchains. 

In this regard, builders are able to interconnect their sovereign chain with others in the Cosmos and seamlessly exchange assets. The IBC protocol provides a communication layer for the blockchains on the network, increasing their interoperability exponentially. 

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For example, an app-specific chain built on Cosmos can send its assets to another chain, without costly bridges or security drawbacks. 

Moreover, the network provides a protocol for shared security, allowing smaller developers to create customized application chains. At the same time, these chains can benefit from the validators on the Cosmos network by staking ATOM, reducing the cost and requirements to onboard their own set of validators. 

In addition, this sidechain concept of the Cosmos network provides near-infinite scalability as transactions are handled by the custom chains instead of the main network. 

What Should You Choose?

So, which one is better — ATOM vs ALGO? Well, this question doesn’t really get a straightforward answer, as these blockchains serve different purposes and goals. Cosmos plays the interoperability card, as many believe that the future lies in an internet of blockchains. The current technology doesn’t warrant a single blockchain system but multiple app-specific chains that can seamlessly interoperate and share assets. 

Algorand, on the other hand, provides a smart contract platform that competes directly with many other chains such as Ethereum, Cardano, Solana, or Polygon. In this sense, the competition for ALGO is much fiercer than for ATOM. 

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Finally, it’s worth noting that the Cosmos ecosystem suffered greatly from the UST/Luna crash. Most of the value locked in the network was valued in UST, resulting in many projects collapsing. That said, the technology behind Cosmos is much more future-proof than Algorand. 

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About the Chief Editor

Godfrey Ogbo, the Chief Editor and CEO of AtlanticRide, merges his environmental management expertise with extensive business experience, including in real estate. With a master's degree and a knack for engaging writing, he adeptly covers complex growth and business topics. His analytical approach and business insights enrich the blog, making it a go-to source for readers seeking thoughtful and informed content.

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