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How to buy Algorand online
This beginner’s guide gives you the lowdown on the Algorand platform and its coin, ALGO. It explains why you might want to own some, and how to get your hands on it.
Compare where to buy Algorand, and open an account
Use one of the brokers below if you just want to know which platform to use. We have assessed all the top trading platforms to help you choose one, and any of these would make a good choice. Otherwise, keep reading to learn more about Algorand.
What is Algorand?
Algorand is a decentralised alternative to the internet. Fuelled by its native cryptocurrency, ALGO, it was created as a competitor to the Ethereum blockchain. The ALGO coin is used to process transactions on the platform and can be held in a wallet to earn rewards.
Anyone who holds ALGO in a cryptocurrency wallet earns interest on their coins every time a new block is added to the Algorand blockchain. There is a central store of tokens used to pay these rewards, fund innovation, and attract new developers to build on the platform.
Algorand was formed by MIT professor Silvio Micali in 2017. Micali has won the Turing Award for his contributions to cryptography and computer science, and his involvement adds a level of gravitas to the Algorand project.
How does Algorand work?
Algorand works by using a consensus mechanism to add new ‘blocks’ to its blockchain. This just means that new transactions are approved so long as a majority votes in favour. The ALGO coin acts as a governance token to fuel the whole process, as the majority is determined by the amount of ALGO tokens in circulation.
Adding new blocks in this way is the main difference between Algorand and energy-intensive blockchains like Bitcoin. Using tokens to vote stands in contrast to Bitcoin’s mining process, which requires a lot of computer power and energy to create new blocks. Thus Algorand is a lot faster and more democratic, as it spreads the power out among coin holders rather than focusing it in the hands of those with the most powerful hardware.
If you invest in ALGO you have a few options of what to do with it. You can be an active holder and put it to work as a governance token, you can store it in a wallet and earn interest, or you can trade it on a cryptocurrency exchange.
How to buy ALGO online – a step-by-step guide
Step 1. Find an exchange
Once you’ve decided to invest, you need to find an exchange that offers ALGO. As it’s a smaller altcoin, you might find that you need to transfer your cash into Bitcoin first, as there’s no way to swap it for a fiat currency. To buy Algorand coins in the UK, use one of these exchanges:
- Binance: One of the biggest names in the cryptocurrency trading space, Binance allows users to trade hundreds of different cryptocurrencies, including Algorand. Open an account right now >
- ChangeNow: Integrated with other prominent trading platforms, it enables instant trading of cryptocurrency, and supports nearly 200 crypto coins. Open a ChangeNow account today >
Step 2. Sign up and fund your account
Once you’ve chosen an exchange, you need to sign up for an account before you start trading. Most exchanges require some form of photo ID, like a passport or driving licence, although this can vary from platform to platform.
When you have an account, you just need to deposit your fiat currency or buy another cryptocurrency to fund it, and then you’re ready to go.
Step 3. Purchase
This step is simple – once your account is funded, you just need to find the current Algorand price and execute the trade. If you’ve used Bitcoin to fund your account, look for the ALGO/BTC crypto pair on the exchange.
Step 4. (Optional) Get a suitable wallet
You don’t have to get your own wallet to hold cryptocurrency as most exchanges will let you store your coins in your account with them. However, in Algorand’s case that might prevent you from earning rewards, so you should check the exchange’s terms and conditions and consider getting your own wallet instead There are a few different options available, here are a couple of the best ones:
- Freewallet: An online crypto wallet that offers storage for over 100 of the most popular cryptocurrencies, including Algorand. Sign up for a Freewallet now >
- Ledger Nano S: The most popular hardware wallet available, it offers storage for more cryptocurrencies than other leading competitors. Get a Ledger Nano S today >
How to trade Algorand – a step-by-step guide
Step 1. Find a broker
Look for one that lets you open and close positions quickly. You should also consider picking out the option with the lowest fees, to avoid having too much of your money eaten away every time you trade.
It’s also important to check that your broker offers Algorand at all. Trading platforms often only offer coins at the top of the market, so it might not be available yet. Two of the most popular brokers are eToro and FXTB, so it’s worth having a look there first.
Step 2. Deposit money
You can normally use a fiat currency like GBP, USD, or EUR to fund your broker account. For smaller cryptocurrencies like Algorand, you often need to transfer your money into Bitcoin or Ethereum first, then search for the BTC/ALGO or ETH/ALGO price.
Step 3. Decide how you’d like to trade
Two of the most common methods are spread betting and contracts for difference (CFDs). These aren’t your only options, but they are the most popular way to speculate on whether the price of your chosen coin will go up or down.
Step 4. Start trading
Once you’ve set up a broker account, you’re ready to go! For beginners it’s usually a good idea to start with a demo account to get to grips with the basics and understand how the market works without the risk of losing money.
When it comes to trading, you can decide to go long or go short. If you’re positive about the coin and you think it’s going to go up, you can take a long position. Otherwise, you can take a short position and back it to fall. ‘Shorting’ an asset just means you’re selling it now and hoping to buy it back later at a lower price. If you do it successfully, you can make a profit on the difference.
For more experienced users who want to make bigger bets, you can consider using leverage. This means putting down a small deposit, or ‘margin’, as collateral and borrowing the rest of the money from your broker. You can multiple the size of your trades many times by using leverage, but it is dangerous and we recommend it only for advanced users.
It’s always a good idea to take time to think over any investment, particularly cryptocurrency. Here are some of the pros and cons to think about before investing in Algorand, and some questions to think about below.
- Algorand is ideal for beginners as an inexpensive starter coin
- You can earn interest by storing ALGO in a wallet
- It was founded by respected MIT professor Silvio Micali
Still not sure? Here are three more things to consider before you decide to invest in Algorand.
1. Is now a good time to buy Algorand?
It depends on whether you have a long or short term outlook. In the long term, Algorand could be interesting if you believe in its aim of decentralising the internet. If it succeeds and becomes the platform that brings the best developers on board then the coin’s value is only likely to increase.
If you have a more short term focus, then its big plans for decentralisation are less important. In that case, you want to get to grips with technical indicators that might help you predict price moves. You’ll want to track any developments that might cause a bump in the price, and you can follow the latest market analysis below:
Algorand (ALGO) could advance even more in the ongoing bull market, but the risk remains high
Up or down? Algorand (ALGO) price prediction for March
Zilliqa, Algorand, Sushiswap price analysis roundup
2. What problem does Algorand solve, and what are the coin’s investment prospects?
Algorand offers a platform for building a decentralised internet. It can process transactions faster than its leading competitor, Ethereum, and has many more possible uses than pure cryptocurrencies like Bitcoin.
Its long term investment prospects are complicated by the number of competitors trying to do a similar thing. There has been an explosion of new cryptocurrencies in recent years, and the likes of Polkadot are trying to solve the same problems in a similar way.
That means you need to think about a few factors, and along with the competition that means deciding on your goals and how soon you want to see results. You should always follow the latest developments, especially in cryptocurrency where things tend to change fast. You can track all the news that might affect Alogrand below.
Is Algorand a good investment opportunity in July 2021?
The Algorand revolution: is ALGO the best blockchain to buy now?
A new platform will bring music to DeFi via Algorand (ALGO)
3. Do you want to hold Algorand for the long term?
As a stable currency that pays rewards for holding it, Algorand lends itself to a more long term investment view. But that’s not to say it’s the only way to go. It depends on your goals and how quickly you want to see results. Here are the last couple of things to consider before you decide how to begin.
Considerations for a long term investment strategy
If you believe in the broader project or want to hold its token for the long term to earn rewards, then an exchange platform is the best place to start. Keep in mind that you’ll need to keep your coins in a wallet to earn the rewards.
Considerations for a short term trading strategy
If you want to trade quickly and benefit from short-term price moves, the long term rewards aren’t so important. In that case, you should choose a broker with low fees and familiarise yourself with technical indicators, because reading charts accurately gives you the best chance of taking advantage of price movements.
Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
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