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Missed Out on Bitcoin? 2 Top Cryptocurrencies to Buy Now and Hold

Missed Out on Bitcoin? 2 Top Cryptocurrencies to Buy Now and Hold
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Bitcoin It debuted in 2009, and first achieved a value of $1.00 in 2011. Since then, its price has risen to 4,900,000%, which means that $21 invested in Bitcoin a decade ago would be worth $1 million. today. And while Bitcoin remains a worthwhile investment, other cryptocurrencies are likely to offer more upside in the long run, especially those that contribute to Decentralized Finance (DeFi).

Blockchain technology allows money to be spent electronically without the involvement of financial institutions, and DeFi products extend this value proposition to other financial services, such as lending, borrowing, and reap interest. And since banks are left out of the equation, DeFi products can make those services more accessible and less expensive.

Based on this idea, Solana (CRYPTO: SOL) And Avalanche (CRYPTO: AVAX) Playing major roles in the DeFi ecosystem, both cryptocurrencies could be big winners down the road. Here’s what you should know.

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1. Solana

Solana is a programmable blockchain designed for smart contracts, which are the building blocks for decentralized applications (dApps) such as DeFi products. Of course, it is far from the only DeFi-friendly blockchain, but it is currently the fastest in terms of throughput.

Why is this important? Scalability is a big issue for many blockchains. in its current form, Ethereum It supports only 30 transactions per second (TPS), which limits its usefulness. Imagine what would happen if Visa Only 30 TPS can be processed – your network traffic will throttle, and you may end up waiting for hours for payment to be accepted. Fortunately, Visa can handle over 24,000 TPS.

This is why Solana is so impressive. It can handle an estimated 50,000 TPS, making it twice as fast as Visa, and orders of magnitude faster than other block chains. Of course, Ethereum remains the largest DeFi ecosystem by long term, with $163.1 billion invested in DeFi. But Solana has made its way to fourth place and now boasts $11 billion locked in DeFi products on its blockchain. It is well positioned to continue rising through the ranks.

Case in point: DeFi services are quickly becoming more and more popular. Since last December, the collective value confined to DeFi products across all blockchains has jumped from $17 billion to $246 billion — a fourteen-fold increase in one year. Assuming this trend continues, Solana’s speed makes it a great alternative to Ethereum.

so what? DeFi products are not free. Miners and validators must be compensated for their time, so that users pay transaction fees with the original cryptocurrency. In other words, as DeFi products on the Solana blockchain become more popular, users will have to buy more SOL tokens, driving their price up. That’s why Solana seems like a smart long-term investment.

An investor studies candlestick charts and trend lines on two different computers.

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2. avalanche

Solana is far from the only blockchain project trying to get rid of Ethereum. Avalanche has similar ambitions, and despite launching in 2020, the platform has already gained quite a bit of attention. In fact, Avalanche is the fifth most popular DeFi ecosystem, with $11.25 billion locked into DeFi products.

Most importantly, the platform has already been tested at 4,500 TPS, but can theoretically support 20,000 TPS. Of course, this means that the avalanche provides less than half of Solana’s productivity, but there’s another variable to consider: time to finish.

While TPS measures throughput, time to end measures how quickly the network integrates transaction data into blocks on the blockchain. At this point, transactions are irreversible. From this perspective, the avalanche is actually faster than Solana’s. In fact, Avalanche is the fastest blockchain-powered smart contract platform as measured by time to end.

From there, the investment thesis reflects Solana’s theory. As dApps and DeFi products on the Avalanche blockchain see greater adoption, more people will have to purchase the underlying cryptocurrency, driving its price up. This is why risk-taking investors should consider adding Avalanche to their portfolio.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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