Over the past year, the cryptocurrency market has experienced a red-hot market full of ups and downs. But the ups have far outweighed the downs. As of this writing, for example, Bitcoin has traded nearly 20% higher over the past year.
That’s a decent rally by most any metric. But in the crypto market, it’s peanuts. In fact, one crypto – a little-known alt coin – has surged by more than 8,000% in the past year.
That crypto is Polygon (MATIC-USD).
That’s no misprint. It’s also no fluke. This cryptocurrency has seen days were it has traded up more than 2X in less than 24 hours, and these rallies could really be just the start of a much bigger, much longer uptrend in the crypto.
Here’s the story.
For the time being, Bitcoin and Ethereum are the two most popular blockchains. But they are far from perfect. One of their biggest downfalls is that they are both plagued by high transaction fees due to congestion, as neither was built for the kind of traffic they’re currently seeing.
Polygon was designed to solve this problem by utilizing what are known as “sidechains.”
Sidechains are blockchains separate from but compatible with Ethereum that exist to create alternative avenues for transactions and improve scalability. If you think of the main Ethereum blockchain as a “highway,” sidechains are “side roads” that can help unload some of the traffic on the main highway during rush hour.
These sidechains have become increasingly popular because, with them, you get the best of both worlds.
On one side, you get to eliminate the high fees associated with congestion on popular blockchains.
On the other side, you still get to tap into the core technological benefits of popular blockchains, which include — among other things — an established developer base and existing code infrastructure on such blockchains.
Many folks in the crypto world believe that sidechains will be a fundamental building block of the new blockchain economy.
We agree. And that’s why we like Polygon token so much.
Polygon is a multi-chain network of sidechains, each of which serves a slightly different purpose, and all of which are compatible with Ethereum.
In other words, Polygon is a bunch of side roads which Ethereum developers can use to more quickly and cheaply develop apps on the Ethereum blockchain. It’s a very valuable network.
The Polygon blockchain was originally called Matic, hence the token symbol MATIC, and it’s one of the hottest cryptos in the market right now — so, the market clearly sees the enormous value in this token.
But we firmly believe that the best of this growth narrative is yet to come, and that when all is said and done, Polygon has a chance to be one of the most valuable cryptocurrencies in the world.
And that’s why – if you have the patience and are willing to see the Blockchain Revolution to its end over the next decade – you may want to consider taking a long-term, buy-and-hold position in Polygon coin today.
Next on our list is Hive (HIVE-USD) – not to be confused with HIVE Blockchain, a crypto mining company listed on the Nasdaq under the same ticker.
Hive is a Web3 blockchain on top of which developers can build, deploy, and scale decentralized applications.
Hive is one of many such blockchains in the world. However, the unique thing about Hive is its novel stake-based Resource Credit mechanism, which creates a fee-less model – making Hive one of the fastest and cheapest Web3 blockchains in the world.
Specifically, most other Web3 blockchains rely on transaction fees. Hive, however, leverages rechargeable Resource Credits wherein each account holds a given amount of credits related to its stake (the bigger the stake, the more credits), uses those credits when transactions are executed, and then recovers those used credits over time, at a rate of 20% per 24 hours.
This mechanism allows for the verification and execution of transactions without fees, which means that Hive transactions are ultra-fast – they take less than three seconds.
It’s no wonder, then, that Hive’s blockchain has been used to build some of the most popular decentralized applications in the world today, including the ultra-popular NFT trading card game Splinterlands.
Hive is a relatively new project. It was launched in March of 2020. Since then, the Hive token has appreciated immensely in value. Still, its market cap is just about $480 million.
We love the picks-and-shovels plays in the crypto universe. There will be lots of both successful and unsuccessful decentralized applications built and deployed over the next few years. All of them will need to be built on top of Web3 blockchains – and therefore, we see Web3 blockchains as a less-risky, higher-upside bet on the success of cryptos.
Hive’s Resource Credits mechanisms is very interesting, and an important differentiator for the project. The resulting zero transaction costs and industry-fast transaction speeds are huge value-adds for developers.
Splinterlands is an enormous success. It is arguably the most popular NFT trading card game out there today. The fact that it is built on top of Hive is bullish.
The company has built a blogging platform, hive.blog, which we think is very cool and looks a lot like the blockchain version of Reddit.
Again, Hive’s valuation is just $480 million. At these levels, Hive’s downside is limited, while upside is huge.
Hive is an under-the-radar, small-cap crypto that’s playing in a very lucrative space (Web3), and it has developed interesting competitive advantages in that space (Resource Credits). Not to mention, the company has already won a huge vote of confidence from one of the most popular NFT games in the world (Splinterlands). All in all, this project appears to have immense upside potential. And in a situation where the crypto market explodes higher over the next 12 months, Hive could be the cryptocurrency leading the rally.
The Graph (GRT) is a new and rapidly growing cryptocurrency that launched in December 2020. It is truly unique. In a market full of copycats and knockoffs, The Graph stands out in part because of its extraordinary utility.
The crypto is commonly referred to as the “Google of the Blockchain” because of its powerful indexing technology. To search a blockchain, you typically need to search all the blocks that were created – an incredibly time consuming and resource intensive process.
With The Graph, an entire blockchain can be indexed much more efficiently and securely via its GraphQL. This enhances the efficiency and capabilities of decentralied applications (dApps).
Further, with The Graph’s platform, developers can publish open application programming interfaces (APIs) called “subgraphs.” APIs are basically ways to sync and retrieve data. Have you ever bought tickets to an event and been given the option to create a calendar entry? That’s an API in which the ticket site is connecting you to a calendar service, like Google for instance.
In The Graph’s case, these subgraphs/APIs can be used to index and manipulate blockchain data. Developers can build blockchain-secured APIs that rapidly index and interact with all the data stored on a particular blockchain, again dramatically increasing the capabilities of dApps.
The crypto also decentralizes the indexing and API process, which boosts the security of the applications by eliminating the need for centralized APIs and databases.
The bottom line is that The Graph makes dApps more powerful and more secure. That is why it is quickly becoming so popular.
News flow is also very positive. In early April, the decentralized smart contracts platform Avalanche integrated with The Graph to expand indexing and querying capabilities. The crypto’s technology has also been integrated by numerous popular dApps and businesses, including but not limited to Uniswap, Compound, USDC, Synthetic, MakerDAO, Bancor, CoinGecko, Aave, Decentraland, and Balancer.
This “Google of the Blockchain” has a bright fugure as it is quickly adopted by businesses and platforms across the crypto space, making it one of the best-positioned cryptos going forward.
Solana is focused on high performance, high scalability and global usability. And in many of those regards, it is extremely impressive.
But, because it is still in the testing phase, some may consider Solana a more risky play than other well-known coins.
However, Solana’s technology renders it more than capable of carrying out its mission of mass adoption when it makes it out of the testing phase. As far as speed goes, Solana is extremely capable. It boasts 65,000 transactions per second (TPS), which makes Ethereum’s meandering 15 TPS pale in comparison.
Why is that important? Because, if a blockchain wants to have practical, real-world applications, speed is essential. Nobody wants to wait for a transaction to go through, either online or in person.
Solana’s technological capabilities also extend to its 400 millisecond block times and quick block finality — the length of time before a transaction is essentially irreversible.
In a retail setting, for example, imagine standing at the cash register and waiting several seconds, or minutes, for an Ethereum transaction to be finalized. Contactless payments via debit card take half a second or less, for comparison. In this way, Ethereum lags significantly behind even current standards.
Solana’s transactions occur and are finalized more quickly than existing payment processing technology.
Waiting for an Ethereum transaction in a real-world setting isn’t feasible.
Also, buying a coffee for a few dollars with ETH could wind up costing you upwards of $50 depending on network congestion. These fees, known as “gas fees” are paid to those responsible for running the Ethereum network to compensate them for their time and energy.
Solana has an average transaction fee of 0.25 cents. This is because it utilizes technological innovations that set it apart from Ethereum and makes it not only faster, but more secure.
In the history of technology, however, the most innovative products and services don’t always dominate the competition.
The best brands, not technology, usually survive.
In the 1970s and 1980s, Betamax lost a long and drawn-out battle to its inferior competitor, VHS.
Betamax tapes were smaller, produced better colors and footage could be navigated much more quickly than VHS tapes.
Why did VHS win the battle?
Widespread adoption.
VHS tapes were longer tapes and cheaper to obtain. JVC also opted to refrain from patenting their invention.
Their inferior quality was overlooked, because quality was the less important factor to consumers. And this led to more people getting their hands on VHS tapes than Betamax tapes.
The risk here is that Solana could find itself in Betamax’s shoes.
Let’s compare blockchains to cars for a moment.
Ethereum is currently a gas guzzler. It has widespread adoption and the number of developers flocking to Ethereum is growing rapidly. Soon, when it transitions to using a more efficient consensus algorithm, it will be some kind of hybrid. Maybe somewhere down the line it will be a full-on electric vehicle.
Electric cars have been here for some time now, but those that run on gas still make up the majority of cars on the road. Over 99% of cars on the streets today run on gasoline, to be more precise. Hybrids and electric vehicles are becoming more prevalent over time, and an electronic-dominated automotive market is now just around the corner.
If this analogy holds, adoption of a new, technologically-superior blockchain will happen, and in the crypto market, that could mean big things for Solana.
Polkadot (DOT-USD) solves one crucial problem between the blockchain and cryptocurrencies – the fact that they don’t always work well together. The crypto allows different blockchains to “talk” to one another while still maintaining their independence.
Launched in 2017 by a deep bench of blockchain researchers, Polkadot is built to be flexible. It can even incorporate non-blockchain systems or data structures.
This on-chain flexibility should be familiar to folks who follow Ethereum and its massive ecosystem of projects and users. In fact, Polkadot was co-founded by Dr. Gavin Wood, also a co-founder of Ethereum.
At its heart, Polkadot consists of many “parachains” that allow for multiple blockchain implementations to exist in parallel, each with its own characteristics. One of the key advantages this sets up for users is that transactions can be spread out across multiple blockchains, which allows for many more transactions to be processed in the same period of time.
Polkadot’s ecosystem has grown to include more than 400 projects so far, and that figure is expected to rise as more projects seek to expand their offerings through interoperability.
Part of Polkadot’s meteoric rise can be attributed to a “redenomination” that occurred on August 21, 2020. Basically, the coin’s circulating supply was increased by 10-fold, bringing the total supply to 1 billion. This process is similar to a stock split, where shares are divided into smaller units but maintain the same value overall.
Redenomination is very rare in the crypto world but was done in this case to make Polkadot easier to calculate and buy.
Another attractive attribute of Polkadot is the ability to earn “staking” fees. Staking is the process of holding cryptocurrencies to participate in transaction validation. Polkadot pays out rewards equally to all transaction validators – regardless of how much they’ve staked.
While this may sound confusing, some cryptocurrency exchanges handle staking for you. All you have to do is buy the coin, set up the right account, and the payouts will start to accumulate. Consider it like a form of dividend. In Polkadot’s case, stakers can earn up to a 12% annual return. That’s not too shabby for a hypergrowth investment that’s only just getting started.