Cryptocurrency investors are free to invest in whichever tokens and coins they deem suitable. However, I’d argue that several established cryptocurrencies, especially the ones furthering the blockchain, are among the very best. They are also among the most overlooked investments.
The blockchain is a ledger used to record transactions immutably. One of the main reasons blockchain has garnered so much attention is that it reduces risks and cuts costs overall. This explanation of blockchain from IBM (NYSE:IBM) has helped me to understand blockchain better. It provides an excellent overview for anyone unfamiliar or looking to rehash the subject.
There are several established cryptocurrencies that continue to lay the foundations for future blockchain technology. I continue to believe that they represent the best current investments that combine long-term viability and upside with relatively less risk.
Solana (SOL-USD)
Solana (SOL-USD) is a standalone blockchain platform that was launched in 2019. It continues to possess attractive qualities many believe is the future successor to Ethereum (ETH-USD).
A lot has been said about Solana in relation to its advantages in comparison to Ethereum. Any such comparison almost always focuses on Solana’s higher transaction speeds and dramatically lower gas fees. While that is appropriate, I think what ultimately propels Solana above Ethereum is its developer friendliness.
Blockchain developers in aggregate will ultimately be responsible for the future state of cryptocurrency. As time goes on, more and more developers are coming to realize Solana is much more developer-friendly than its rival Ethereum.
That creates a virtuous cycle whereby those developers increasingly focus on Solana and further its blockchain development.
Cryptocurrency investors like Solana because it performs so well as an investment. That is likely to continue because of all of the aforementioned strengths it possesses. Thus, readers shouldn’t be surprised if and when Solana continues to appreciate in value.
Polkadot (DOT-USD)
Polkadot (DOT-USD) has also received a lot of attention as an important crypto working to build blockchain infrastructure.
Remember, blockchain is simply an immediate and transparent ledger system at its heart. Every individual blockchain is disparate from every other individual blockchain. What that means is that a lot of important data is separated by blockchain. That’s where Polkadot’s utility exists. The whole purpose of Polkadot is to connect various blockchains, facilitating interoperability and data sharing in the process.
Polkadot includes various mechanisms that connect blockchains including relay chains, parathreads, parachains and bridges.
The fact that Polkadot is primarily valuable because of its ability to connect blockchains raises the question of why that matters at all. The answer is that the more connected every blockchain is, the more complete data becomes allowing more applications to be built.
More and more companies are working to digitize their real real world assets onto the blockchain as time goes by. That will create an increasing opportunity for Polkadot’s utility to grow, raising its value in the process.
Avalanche (AVAX-USD)
Avalanche (AVAX-USD) is one of the more interesting established cryptos that is working to solve important issues in the crypto space.
The project is well known for its attempts to solve what is known as the blockchain trilemma. That says that blockchains cannot achieve significant decentralization at scale, thereby invalidating one of their central purposes. High gas fees are one of the consequences of over-centralization, which is arguably manifest at Ethereum.
Avalanche has designed a system that interoperates three separate blockchains in order to solve the problem. Each of those three blockchains has different functions and design, thus far resulting in higher throughput while maintaining decentralization.
The three separate chains mentioned above can be understood in more depth by viewing this article, which highlights several of the more interesting use cases Avalanche is currently utilizing.
The crypto derivatives exchange highlighted at the top of those use cases is probably the most interesting simply for the fact that it promises to drive demand substantially. In turn, demand will likely rise as tangible, money making applications are developed using Avalanche.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
