If you have been paying attention to the news, chances are you have heard about cryptocurrencies.
Of the pack, there is one that is especially popular and named more than any other else: Bitcoin. However, with more than 11,424 cryptocurrencies out there, there is so much more to the crypto space than just Bitcoin.
We certainly love Bitcoin and have written extensively about it. However, limiting yourself to only the most popular cryptocurrency might not be an especially good idea. As with any form of investing, you want to have a balanced portfolio.
Joining the world of crypto can be daunting, especially when you start learning about all the other cryptocurrencies there are. By reading this article you are already heading the right way to understand more about all the possibilities.
These are some of what we believe are the best altcoins for 2021-2022!
What Is An Altcoin?
When it comes to crypto, there are 2 major groups: Bitcoin and altcoins. Altcoins is the term used to refer to all coins that are alternatives to Bitcoin (therefore their name).
Why the term altcoin is used to refer to all other cryptocurrencies, they all differ in technology and nature. They might differ when it comes to consensus algorithms, types of nodes, how smart contracts work, etc.
The first altcoin, Litecoin, was created in 2011 and since then more and more altcoins have been developed each year.
If you didn’t understand any of these concepts, we recommend you check this article.
While altcoins will be different from Bitcoin more often than not, they still tend to follow its performance. This is known as “coupling” and is the result of Bitcoin being the most popular cryptocurrency.
As the “king” of crypto, Bitcoin still has a lot of influence on the crypto market, although this influence is declining with time.
Of all altcoins, Ethereum is the biggest by market capitalization and one of the most popular among developers. We wrote an article explaining what Ethereum is and how it differs from Bitcoin, so we won’t talk about Ethereum here.
Altcoins were born as a result of developers looking to fix some of the shortcomings of Bitcoin. These include its energy requirements, transaction settlements time, smart contract capabilities, token standards, etc.
Why Should You Consider Altcoins?
While altcoins are pretty young when compared to Bitcoin, they have multiplied over the years as investors keep looking for the next big thing. For this reason, investing in a new altcoin is a risky move as they will usually have a spike in price when launched… followed by a drop.
However, as the market has been maturing, new altcoins have already established themselves as a solid alternative to Bitcoin. This has allowed their market capitalization to increase and their communities to create whole ecosystems around them.
A case can be made that altcoins are better versions of Bitcoin, although not as old and popular. For example, one of the biggest criticisms of Bitcoin is its high volatility. Some altcoins known as stablecoins deal with this by tying their value to a commodity like a fiat.
One of such cryptocurrencies is Tether (USDT), which has all of its coins backed by a dollar, keeping its value constant. While this is not too useful in terms of investment, it provides them with the ability to operate as a reliable alternative to fiat.
As most altcoins also provide more functionalities than Bitcoin does, they tend to gain mass adoption by certain industries.
By allowing them to operate as a sort of “digital stock”, in which its value depends on their usability and success in said industries, altcoins can create big returns. If the project is used by many institutions, the valuation of its cryptocurrency will go up, making them less speculative than Bitcoin.
Finding the projects that are most likely to revolutionize their respective industries is essential to find the best altcoins for investment. For this reason, it is essential to do your research before investing in them. While a new project could result in super high returns, it will also have the potential for massive losses.
Best Altcoin Investments For 2021-2022
It’s time to talk about what altcoins you should keep an eye on for the next year. While no one can ensure that a cryptocurrency will be the best in the long term, these projects have solid bases.
In addition to this, their unique approach, mission, community, and development team, have allowed them to establish themselves in the market.
Personally, we believe that investing in blockchain is better done in the long term. For this reason, we suggest you invest in that project you believe has the most potential to revolutionize its industry.
Cardano is one of the hottest altcoins at the time of writing, reaching the top 3 by market capitalization over the past year. The reason behind this success is simple: Cardano has put a lot of emphasis on scientific research, carefully designing its infrastructure before deploying it.
While this sounds as it is not a big deal, it is. Major cryptocurrencies like Ethereum and Bitcoin have chosen to deal with design flaws and other issues as they show up. Cardano has been years in development, a strong team of scientists backs it up, and has grown a vibrant community.
The project was co-founded by Charles Hoskinson, one of the developers behind Ethereum. As such, Cardano was designed to deal with some of the shortcomings of the Ethereum network.
With more than 100 scientific papers written around Cardano’s technology, this project stands out among its peers.
Usually known as the “Ethereum” killer, this cryptocurrency aims to revolutionize finances on a global scale. For this purpose, it focuses on being integrable with other chains and being highly scalable, while also providing high levels of security, performance, and automation.
At the time of writing, Cardano has seen its cryptocurrency’s (ADA) value increase by over 2000% during the past year. This is a reflection of the trust investors have on its approach, especially considering the project is still in development.
If you want to invest in a project backed by science, that doesn’t mind taking its time to develop features, and with a community that has supported through highs and lows, Cardano might be worth considering as one of the best altcoins for investors.
Another strong competitor for the altcoin crown, Solana was designed with the purpose of improving the Decentralized Finance (DeFi) ecosystem. If you are not familiar with DeFi, we got you covered with this article.
This objective means that Solana needs to be able to process transactions quickly and securely, which it achieves by using a hybrid consensus algorithm.
This algorithm is a combination of proof-of-stake and proof-of-history, which makes it one of the faster blockchains out there. It can process as many as 50k transactions per second!
One of the major reasons to keep an eye on Solana is Ethereum’s declining popularity among DeFi developers. This decline is the result of increased congestion, low performance, and high transaction fees.
With Solana being specifically designed for DeFi, it is receiving most of the developers running away from Ethereum. This gives it the potential to be one of the best altcoin investments for 2021 and 2022.
If you believe that DeFi will overtake traditional finance anytime soon or that performance is the most important trait for a network, Solana might be for you.
If you have been around to see how the Internet has grown over the past decades, you probably have realized it isn’t what it used to be. The internet has become increasingly centralized with companies like Google, Facebook, Microsoft, and others reigning over it.
Well, a new movement known as Web3 is looking to change this. It aims to provide users with control over their data while also facilitating its sharing. Basically, no one can profit from your data but you… and only you choose who you share it with.
However, such a paradigm requires an effective means of exchanging data. This is where Ocean Protocol comes into play: it provides a means for data to be exchanged in an effective, yet secure, manner.
Ocean Protocol uses blockchain technology to safely store any kind of data. Like any other asset in blockchain, this data is completely controlled by its owner. With him deciding who and how it can be used.
The use of the OCEAN token also allows any user to sell or charge for the use of their data, opening new capitalization options to researchers, users, advertisers, and more.
You should consider OCEAN one of the best altcoin investments if you believe that the internet transition toward Web3 is imminent. Or if you believe people around the world will pay more attention to their personal data!
Self-described as the “The trust layer of the internet”, this network aims to harvest blockchain technology to help enterprises build decentralized applications. Unlike other blockchains, Hedera is governed by some of the world’s leading companies to provide an added level of security.
While hedera is a public permissioned network, it has gained increased notoriety over the years, especially among companies. This success is the result of its low fees, high throughput, and fast transaction speeds.
These features, in addition to the trust its governing council provides, have allowed its coin (HBAR) to increase by more than 400% over the past year.
If you want to invest in a cryptocurrency that is ready for enterprise adoption, HBAR might be the right fit for you.
Exchange support for HBAR is limited because of how new it is, but it can still be found on Binance.
Most blockchain networks are blind. By this, we mean to say that they are unable to access information outside themselves. While this is not always a problem, it does limit their use cases and flexibility. If you were to design a decentralized app that requires you to have access to sports results, weather, USD/EUR value ratio, etc… This is a problem.
Due to this limitation, Oracle networks were created. They allow blockchain networks like Ethereum to gain access to external information, allowing new applications to emerge. Oracles reward data providers and validators for doing this job, incentivizing participation.
One of the most important, if not the most important, oracles is Chainlink. Built on the Ethereum network and using the LINK coin, Chainlink has played a major role in DeFi. When DeFi exploded in 2020, so did Chainlink, becoming one of the most popular projects.
With the DeFi market continuing to grow over the past year, oracles are sure to continue playing a major role.
Betting on LINK being one of the best altcoin investments is betting on the DeFi niche. If you believe blockchain will continue to become an essential technology across different industries that require external data, Chainlink should be considered.
Another contender for the title of “Ethereum killer” with Cardano and Solana, Polkadot has seen increasing popularity this year. The reason is simple: it aims to bring multiple blockchains together.
By connecting multiple networks, Polkadot might change the entirety of the blockchain ecosystem. Think of it as a Web3 of blockchains, which in turn can be integrated with the Web3 itself. It aims to do this by having two different types of chains: relay and parachains.
The relay chain is the network’s main chain, which means transactions are permanent. For all intents and purposes, it operates similarly to most blockchain networks. However, parachains work as bridges of sorts with full blockchain usability, allowing Polkadot to be highly flexible.
While the project is still in development, just as Cardano, it has a big following. This altcoin is supported by those who believe that the future of blockchain technology is interoperability instead of competition. If you agree, Polkadot is the project most likely to succeed on this mission.
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