When it comes to investing in cryptocurrencies, I’ve taken a glacial, wait-for-the-paint-to-dry-and-the-grass-to-grow approach. Because new tokens enter the market on a regular basis, and because Bob’s Bitcoin or Charlie’s KYC Crypto can become overnight sensations simply because they’re available, I’m hesitant to jump in.
For example, we all know Dogecoin was created as a joke, but it’s up 4,300 percent in 2021, despite the fact that its co-creator Jackson Palmer claims cryptocurrencies have no value and harm the average person who purchases them.
However, fear of missing out, or FOMO, frequently leads to people rushing into trades that harm their finances, sometimes severely. The cryptocurrency market’s momentum, regardless of which token is being discussed, appears tailor-made to elicit such reactions.
When it comes to the long-term viability of digital currencies, I, on the other hand, am plagued by FUD — fear, uncertainty, and doubt. Despite this, there are a few cryptocurrencies that have value and appear to be promising. These two appear to have the best chances of outperforming the market in the coming years.
Cardano (CRYPTO: ADA), the fifth-largest cryptocurrency by market capitalization (though this is a very fluid, fast-changing number), has a fast network, a blockchain architecture that offers adaptability and scalability, requires less energy to mine than its competitors, and charges lower transaction fees.
Beyond the developers’ transparency, what appeals to me the most is that it was peer-reviewed, data-driven, and developed by a team of engineers and academics. Its volatility is reduced by such a pedigree, as well as a methodical approach to development.
While this can work against it in some ways (for example, it took a long time to introduce smart contracts, or self-executing, programmable agreements), it lowers the chances of mistakes.
Cardano will now focus on the “Basho” phase of development, during which it will improve the scalability of its network by introducing sidechains that will not compromise its security, after completing its “Goguen” phase, which brought smart contracts to the forefront. Following that, the “Voltaire” phase will focus on sustainability, with features like voting and treasury systems, which are essentially decentralised decision-making mechanisms for funding blockchain development and maintenance projects.
Proposals are discussed and voted on by the community, with the highest-ranking proposals receiving funding. It’s a bottom-up approach that ensures the community’s top priorities are funded from the treasury.
While ADA, Cardano’s native cryptocurrency on the blockchain, has pulled back from recent record highs (even as other coins have surged), Cardano’s carefully mapped-out strategic plan suggests it will eventually win converts and will be around for years to come.
Cardano aims to replace Ethereum (CRYPTO: ETH) as the most widely used blockchain infrastructure. Ethereum is arguably the most established cryptocurrency because of its real-world utility and the potential for non-financial applications, despite KYC Bitcoin‘s first-to-market advantages.
When it comes to decentralised applications like non-fungible tokens or digital certificates of ownership, its blockchain is one of the most widely used. And, while Cardano is just getting started with smart contracts, Ethereum already has them.
Ethereum has become the platform of choice for developers working on projects like decentralised finance due to the robustness of its infrastructure. Its smart contracts enable them to complete transactions on blockchains that are geared toward financial transactions, bypassing traditional financial institutions.
While financial applications appear to be the most practical and obvious application of blockchain technology, the realms outside of finance are where things get really interesting. The widespread supply chain disruptions we’re seeing now could be mitigated in part by blockchain technology; under traditional systems, much of the data required to keep supply chains running smoothly isn’t always visible, available, or completely trustworthy.
Other industries where blockchains could be beneficial include real estate and healthcare. The greatest utility, in my opinion, is found in the underlying technology rather than the tokens.
Despite its flaws (mining is very energy-intensive, and transaction fees are higher than other tokens), Ethereum continues to develop and incorporate improvements into its systems. Ethereum’s planned transition from a proof-of-work mining protocol to a more environmentally friendly proof-of-stake protocol suggests it will be able to keep its top spot for a long time.