With many thousands of cryptocurrencies out there and new ones coming online every day, it can be difficult to cut through the noise and decipher which ones have real value and which ones will soon be forgotten. New cryptos with attention-grabbing names and low token prices but little in the way of utility are a dime a dozen.
To separate the wheat from the chaff and find cryptocurrencies with true long-term staying power, look for differentiated projects that are offering real utility, building innovative solutions, and helping tackle real-world problems. Here are three cryptos doing just that: Stellar (XLM -0.39%), Arweave (AR 0.62%), and Chainlink (LINK 0.96%).
Neil Patel: The current financial system is a web of complication, consisting of fee-extracting intermediaries that make life difficult for those at the lowest end of the socioeconomic spectrum. For example, an immigrant in the U.S. who wants to send money back home to India would have to pay a fee of more than 5% of the amount remitted. Additionally, the recipient would have to wait as long as five days to get that money.
Enter Stellar, a crypto project launched in 2014, whose goal is to make it easier and cheaper for individuals to send money across borders. The blockchain's token, called Lumens, can be purchased using various fiat currencies, then sent to someone in a different country on the Stellar network, and then converted to the recipient's home currency. Transactions are cheap and can be completed in seconds.
This is a significant improvement compared to sending money via traditional money-remittance services. And according to the World Bank, the market for remittances sent to low- and middle-income countries will reach a whopping $630 billion this year. By using the Stellar network, the amount of money saved by not paying fees to intermediaries can be a game changer for those in poorer countries.
Stellar has secured partnerships with IBM and MoneyGram, adding to its legitimacy. What's more, the Stellar Development Foundation, the nonprofit organization that spearheads Stellar's growth, is introducing smart contracts on the platform, which should increase functionality.
Because better integrating the global financial system while lowering fees is such a huge opportunity and an important enabler of economic empowerment, it's not a surprise that Stellar has long had a direct rival in Ripple. Although it's currently in a legal battle with the Securities and Exchange Commission, Ripple is trying to accomplish the same thing as Stellar, with a focus on banks, and also has its own set of partnerships with a long list of financial institutions.
Despite the competition, the case for Stellar Lumens to one day reach $1 per token should lead investors to put this innovative crypto on their watch lists.
RJ Fulton (Arweave): Founded in 2017, Arweave is a blockchain-based solution for permanent data storage. Its ultimate mission is to provide a censorship-resistant database that ensures that all kinds of data -- including documents, reports, statistics, and images -- cannot be manipulated for ulterior motives.
The process for storing data on Arweave is actually pretty simple. Anybody, anywhere can upload data to the blockweave -- Arweave's name for its blockchain -- by purchasing gigabytes with the AR coin. It is a one-time fee for permanent, immutable storage.
Arweave ensures data is stored permanently through its mining process. To successfully mine a block and earn a reward, miners must prove they have data from not only the previous block but also one other randomly selected block. The more data miners store, the more likely they will earn the block rewards.
The data storage model that Arweave provides is slowly gaining traction as further development of Web3 unfolds. Web3 is a term used to describe the next evolution of the internet. In our current Web2 world, the internet is centralized around corporations that profit off of your data. With Web3, the internet becomes decentralized, permissionless, and entirely open source.
For Web3 to continue to develop, a data storage protocol is necessary to house all of the information that won't be stored on the servers of private corporations. This is where Arweave shines. Its unlimited, permanent storage capacity is the perfect home for all Web3 applications.
Other blockchains like The Graph, Near Protocol, Polygon, Avalanche, Solana, and Polkadot all currently integrate with Arweave to offload transactional data from their own blockchains and store it on the blockweave.
Even more interesting is the prospect that the world's second-most valuable cryptocurrency, Ethereum, might integrate with Arweave. A part of Ethereum's vision is to streamline the amount of data on its blockchain so it can process transactions faster. It's extremely speculative at the moment, but there is documentation on Ethereum's website discussing the potential of utilizing a decentralized storage solution to offload data from its blockchain. The document directly mentions Arweave as a possible candidate.
Michael Byrne (Chainlink): Most cryptocurrency proponents recognize smart contracts as one of the top use cases for crypto over the long term. But there's one problem -- blockchain-based smart contracts are limited when they aren't able to access external data. That's where Chainlink comes into play.
Chainlink is a so-called oracle that connects blockchains to the outside world by acting as an additional layer of infrastructure between smart-contract platforms like Ethereum and external data sources, thus providing them with trustworthy real-time data. For example, Chainlink can provide a smart contract with the prices of stocks, commodities, currencies, or cryptocurrencies. It can even be used to provide smart contracts with accurate weather information.
This is important in several ways. As decentralized finance grows, having reliable price information on stocks, currencies, or even other cryptocurrencies is important to ensure that smart contracts based on things like futures are executed properly. As more money flows through smart-contract platforms, having reliable and secure data will be crucial. Smart-contract protocols such as Aave, Fantom, and Sushi are already using data feeds from Chainlink.
As more companies and organizations around the world begin to adopt blockchain technology, giving these blockchains reliable information on variables like weather conditions or data from Internet-of-Things-enabled devices will become increasingly important, and can even help to make the world a better place. For example, the World Economic Forum considers oracles like Chainlink an important tool for fighting climate change, giving the example of using smart contracts and data from satellites to reward farmers who restore tracts of land with regenerative farming. Oracles can be used to provide self-serve, smart contract-based crop insurance to farmers in the developing world who are unable to access traditional insurance.
Whether they are enabling people around the world to send and receive money seamlessly, creating a new and immutable way to store data, or ensuring smart-contract platforms execute accurately based on reliable real-world data, these three innovative crypto projects are providing significant utility and are thus likely to have long-term staying power.