Ethereum’s 1,330% sprint over the past 12 months was driven by the dramatic emergence of decentralized funding (DeFi) and non-fungible tokens (NFTs).
Most notable among them are Cardano, which has increased more than 3,500% in the last year, and Polkadot, which has increased 1,360% since the first trade in August 2020.
How do these cryptocurrencies differ from Bitcoin?
Bitcoin’s main purpose is to establish itself as an alternative to traditional fiat currencies (such as rand or dollars). It was designed as peer-to-peer digital cash. Today Bitcoin is used both as a store of value (similar to gold) and as a medium of exchange (like a normal currency).
Unlike Bitcoin, Ethereum, Polkadot, and Cardano are cryptocurrency projects that deploy blockchain technology to do more than just act as business asset or digital money. They provide multipurpose blockchains for executing smart contracts and decentralized applications. This means that their blockchains can be used in different ways depending on what the end user wants to achieve.
For example, Ether – the native cryptocurrency on Ethereum’s blockchain – can be used as digital currency just like Bitcoin, but that’s not its main purpose. Instead, the main purpose of the Aether is to power its blockchain, much like the way oil is used to power the global transportation networks.
What are intelligent contracts and decentralized DApps?
Smart contracts and decentralized applications (DApps) sound intimidating, but are actually simple concepts. They refer to code or programs that run over a blockchain and automatically perform actions under certain conditions.
For example, if a grocery order is delivered (action completed) and the customer confirms receipt of the order (condition met), a payment to the grocery delivery service can be authorized (payment completed).
When you combine multiple smart contracts, you get what are known as decentralized apps or “DApps” which are really like apps that run on your iOS or Android phone but instead run on a blockchain (like Ethereum, or Polkadot) Cardano).
In order for these smart contracts to run or for DApps to work, you need to use the native cryptocurrency on each blockchain to pay the cost miners charge for processing and verifying transactions. With the increasing use of these blockchain networks, the value of native cryptocurrencies for intelligent contract blockchains is gaining in value. It’s just a demand that exceeds the supply of the cryptocurrency in question.
What does it all mean?
Ethereum, Cardano, and Polkadot all offer blockchains that serve as operating systems that enable the development and execution of smart contracts and decentralized applications for credit, gaming, investments and interest income, not to mention buying insurance and trading between countries, as well as millions of other potential ones Uses cases.
“The crypto market is already bigger than Apple – and it’s not just Bitcoin and Ethereum – because there will be different uses for different things,” said Sean Sanders, CEO and founder of Revix.
“If you want to take advantage of trends that are shaping the ‘new normal’, invest in assets that are global, generational, and digital – cryptocurrencies do just that.”
Sanders describes a future where everything from contractual arrangements to paying taxes to tracking bid monies is built into plumbing that connects individuals and businesses directly in a myriad of new types of business relationships.
“There is a great general purpose blockchain battle going on. Ethereum, Cardano and Polkadot are competing together with EOS, VeChain and Tron for the next global decentralized operating system for blockchain-based applications, ”says Sanders.
“This is one of the most exciting developments in the last few decades, similar to the development of the Internet in the early 1990s and cloud technology in the early 2000s.
“And one thing is certain: there will be big winners and losers,” he added
“People often hear the word cryptocurrency and only think of the currency part. However, this is a misnomer as not all cryptocurrencies are trying to become digital money.
“This is exactly why we decided to bring our smart contract bundle onto the market, which contains the five most important cryptocurrencies for smart contracts and is then automatically updated every month when the market changes.
“We see this as the safest and easiest way to securely invest in this fast-growing crypto topic without having to bet on which individual cryptocurrency will be the next big success story.”
What’s next?
The Ethereum network dominates this area but faces serious competition from Cardano and Polkadot, which were developed by some of the original founders of Ethereum. In fact, Cardano and Polkadot have seen a big catching up in the past 12 months, as shown by the returns shown below.
Source: Revix
A battle for the dominance of smart contract space is ongoing
Charles Hoskinson was one of the co-founders of Ethereum and founded Cardano with the aim of solving some of the speed and scalability problems that have plagued Ethereum.
Gavin Wood, also co-founder of Ethereum (together with Vitalik Buterin), which he described as “one computer for the entire planet”, left Ethereum in 2016 to build the Polkadot network, which, like Cardano, is more flexible and scalable than Ethereum.
Each of them want to become the dominant player in the emerging DeFi, NFT and decentralized play areas. In order not to be outdone, Ethereum is undergoing a major upgrade known as Ethereum 2.0. The main purpose is to increase the transaction throughput from the current 15 transactions per second to tens of thousands per second. Cardano plans to conduct a million transactions per second once its network is sufficiently developed. However, when this will be the case remains to be seen.
EOS is another decentralized blockchain network that promises millions of transactions per second (it doesn’t exist yet) and allows smart contracts to be built on it with some fancy features like task scheduling and account recovery. EOS is also a cryptocurrency that is traded on several exchanges.
Tron is another decentralized blockchain platform with one small difference. It was founded in 2017 by the Singapore-based Tron Foundation, led by CEO Justin Sun, with the aim of enabling peer-to-peer transactions between content creators and content consumers without incident.
While Netflix hosts content on its platform and bills subscribers to watch movies and pays content creators a fee, Tron would allow anyone to upload digital content to its platform and audiences would pay content creators directly.
The aim is to decentralize a highly concentrated global media industry that acts as a gatekeeper for information and entertainment.
As shown below, Revix’s Smart Contract Bundle has done exceptionally well over the past 12 months.
Source: Revix
Other ways to invest smartly in cryptocurrencies
Source: Revix
Revix offers two other crypto bundles that focus on specific investment themes:
Revix also offers a payments package that offers exposure to the top five payment-centric cryptocurrencies that want to compete with government-issued fiat currencies to make digital payments cheaper, faster, and more global. These cryptos include Bitcoin (BTC), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), and Stellar (XLM).
A third bundle offered by Revix is the Top 10 Bundle, which distributes your investment across the top 10 largest cryptocurrencies based on market capitalization. As with all other bundles, the portfolio is rebalanced every month to ensure that each crypto is given a weight of exactly 10%. This bundle achieved a remarkable growth of 842% over the past 12 months.
You can also buy and sell USDC (a “stablecoin” fully backed by the US dollar) and a physical gold token called PAX Gold, which provides legal ownership of an ounce of gold through Revix’s online platform.
Kindly supported by Revix.
See Revix for more information.
This article is for informational purposes only. The views expressed are and should not be construed as investment advice or recommendation. This article is neither an offer nor the solicitation of an offer to buy or sell any of the assets or securities mentioned here. You shouldn’t be investing more than you can afford to lose. Before investing, please consider your experience and investment goals and seek advice from an independent financial advisor if necessary.
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