- Revenue << Costs
The cost of running Algorand Inc., Foundation and Relay nodes are in the order of tens (or even hundreds) of millions. Even if the tx# goes 100x, with current transaction fees and considering that higher tx# greatly increases costs for the network (all blockchain data, which will be in tera/peta bytes is replicated in hundreds of relay nodes, whereas each node will be a cluster of servers with very high bandwidth connections), the network revenue can barely cover the minimum costs. Stepping back for example it doesn’t make sense to replicate most transactions (e.g., planetwatch tx) on hundreds of servers for years. This is just not economically viable.
Is there any source of revenue other than selling Algo tokens? What happens when all tokens are sold and easy money is gone? The Algorand inc. revenue from other sources is likely very small. In general Algorand Inc. doesn’t have a good business model if it doesn’t come up with something that can generate billions in revenue. The blockchain technology as a decentralized trustless network has very limited use-cases (relative to tech in general) that justify using the approach. In most cases other solutions are a few orders of magnitude better.
- Long-term development and support
Algorand inc. is the only entity that is capable to develop and maintain the Algorand software. The relationship between the inc. and the foundation is unclear. What if inc. and the foundation/network incentives diverge at some point. Algorand inc. at the end is a private company that needs to make money and its incentives by definition cannot be 100% aligned with the Algo-holders interests.
Also companies die at some point and Algorand inc. is (likely) not an exception. However a blockchain is expected to stay around forever.
To put the above issues into perspective, bitcoin with all its limitations doesn’t have any of the above concerns. The only major concern for bitcoin is quantum computing, which optimistically and in theory can be addressed by a number of network upgrades.