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Algorand misrepresents its performance against Bitcoinopen_in_new
Blockchain startup Algorand cited incorrect Bitcoin stats while marketing its own network. The startup claimed that its network handled over 50,000 transactions in less than a month, which it said was equivalent to what Bitcoin does every six months when the network actually does 1.8 million transactions in that time.
Algorand, a Boston-based blockchain company created to improve blockchain decentralization, made the news last month after it successfully completed a $60 million token sale. The company’s token sale implied that Algo token’s market capitalization was close to $6 billion, which would make it the seventh-largest coin—above Binance’s BNB and just below EOS.
The company’s successful token sale and mainnet launch didn’t last long though, as Algo’s value plummeted just days after the sale. But, the company maintained that everything was going according to plan, saying they had a successful month.
Algorand issued various marketing texts citing their accomplishment during the last month. The company’s CEO Steven Kokinos participated in several AMA sessions, answering questions about the state of the network.
However, the company’s claims were put to the test by a well-known independent cryptocurrency analyst and blogger, who found that some of the data Algorand provided was not only exaggerated but completely incorrect.
The analyst, who goes by the name of Hasu on Twitter, called the comparison “incredibly disingenuous marketing” by Algorand. He found several instances where the company used incorrect data when comparing its transaction volume to that of Bitcoin.
While it’s unclear where the text was pulled from, the same wrong data is used on two separate occasions.
Incredibly disingenuous marketing by Algorand, claiming BTC does 50k transactions every 6 months. In reality, BTC does 27k payments (tx equivalent) *every hour*, 120M payments every 6 months. It's not a mistake, the claim is being repeated in AMAs by Algorand's CEO @stevekokinos. pic.twitter.com/thnQRYXctu
— Hasu (@hasufl) July 11, 2019
According to Hasu’s tweet, Algorand claimed it handled over 50,000 transactions since the launch of its mainnet less than a month ago. That, the company said, was equivalent to “roughly 6 months of Bitcoin transactions.”
According to data from Blockchain.com, Bitcoin network is confirming almost 300k transactions per day as of July 2019.
This wasn’t a one-time mistake, either. Steven Kokinos, the company’s CEO, used the same data during an AMA.
“In the first two weeks of live mainnet, over 50,000 transactions have been processed, which is roughly equivalent to 6 months of Bitcoin transactions or 2-3 months of Ethereum transactions,” he wrote.
And while Kokinos and Algorand were quick to react to the twitter thread, issuing an apology for using wrong stats, the crypto community still found it to be odd for a data-conscious company.
I’d like to reiterate the same. That stat around bitcoin was clearly wrong and I should have caught it. Apologies to everyone on that.
— Steven Kokinos (@stevekokinos) July 11, 2019
Users accused Algorand of intentionally using the wrong information to trick investors into believing their network was doing better than Bitcoin.
Algorand only need a fraction of their audience to miss bitcoiners' corrections for the deception to have been worthwhile. It's like the downmarket newspapers whose front page lies are corrected in small print on p14.
Indeed, cutting out the % who *are* informed helps the grift.
— Manticlops (@manticlops) July 11, 2019
Others said that using incorrect data from the world’s most transparent data record was a very bad idea.
Why would someone piss all over their own credibility like that by citing incorrect figures from the world's most accessible, verifiable, immutable and transparent data record known? Seems like a very bad idea.
— Eric Wall (@ercwl) July 11, 2019
We are yet to see whether this information spreads and affects Algorand’s price in the following days.
Algorand, currently ranked #1868 by market cap, is up 0.54% over the past 24 hours. ALGO has a market cap of $0 with a 24 hour volume of $148.78M.
Chart by CryptoCompare
Algorand is up 0.54% over the past 24 hours.
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Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in Computer Science Engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving the transportation problems at his company, he can be found writing about the blockchain or roller skating with his friends.
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