About 10 years ago, Bitcoin (BTC 2.79%) had a total market cap of just $111 million. There has been plenty of ups and down since then, but the general trend kept pointing upward. These days, the oldest cryptocurrency is worth approximately $392 billion -- with a B. If you had invested just $1,000 in Bitcoin a decade ago, it would be worth a life-changing $3.5 million today.
Bitcoin is a respectable investment vehicle in 2022, earning the attention of deep-pocketed institutional investors. However, the days of thousand-fold returns in just a few years are probably not coming back to the most mature name in the crypto sector. So it's only natural to look around for the next crypto name that could make you rich in a hurry.
I have to note that extreme returns always come with larger-than-life helpings of risk. Truly gigantic returns on your investment can only come from small, untested, and relatively unknown cryptocurrencies. That group also contains many names that will reach for the stars but only reach the treetops, at best. Most cryptocurrencies at this level will see only negative returns in the long run.
But that's the name of the game. A handful of big winners can make up for lots of forgotten also-rans, and you'll never find the good bets unless you're out there looking for them.
So let me show you a couple of cryptocurrencies that could make you a lot of money over the next decade if all goes well. Just keep in mind that their downside risks are just as huge, and you should keep your speculative bets fairly small. These are not the kind of names you should bet the farm, the tractor, and all the chickens on. A couple of eggs will do, relatively speaking.
CRYPTO: FIL
Key Data Points
Filecoin: Storing data in the blockchain
Let's say you want to store some data in the cloud but don't want to rely on one of the classic cloud-computing giants. Your files need to be heavily encrypted and unreadable even to the data host. You should be able to access that ultra-secure data very quickly. The storage service also shouldn't cost a lot, and you want to make sure the data can't fall through the internet cracks, lost forever to something as simple as a clumsy keystroke.
You will find that Filecoin (FIL 4.03%) checks all these boxes. Filecoin is a distributed blockchain network that lets users store digital data on a global peer-to-peer chain. Storage providers supply the physical storage space for your valuable data and compete for your business by charging low fees on an open-market platform. The financial incentives, in the form of Filecoin tokens, also ensure each storage provider will fight to keep your data safe and available. The storage fees are automatically refunded to the client if a file is ever lost or corrupted.
It's all about the money, and the Filecoin token is the lifeblood of this innovative storage service. The network can power financial services, digital media platforms, and private file-storage tools. In one of the most popular use cases so far, digital content creators rely on Filecoin to store the actual media represented by non-fungible tokens (NFTs).
This idea holds a ton of promise. Filecoin could grow into a massive service provider in the blockchain-based world of Web3. The crypto's current market value is just $1.8 billion today. If it turns out that Filecoin can support a trillion-dollar industry in the long run, that would multiply early investments by 500 times or more.
I can't promise that the storage network and its Filecoin token will skyrocket, but I'm also not completely sure it won't. Holding your breath until that vision becomes a reality is probably bad for your health. Still, Filecoin looks like a good place to put a handful of cash you won't need for the next decade or so.
CRYPTO: ZEC
Key Data Points
Zcash: A privacy-minded version of Bitcoin
The privacy-enhanced Bitcoin clone known as Zcash (ZEC 2.15%) could also make big waves over time.
This crypto offers many of the same features as Bitcoin and is built on the same fundamental code. However, this version of "digital gold" comes with some additional features that should arguably make Zcash more valuable than the basic Bitcoin currency.
This cryptocurrency supports several transaction types.
- So-called transparent transactions display the sender's and receiver's addresses and are very similar to sending or receiving Bitcoin.
- Shielded Zcash addresses hide the identities and account addresses of everyone involved and are valuable when you need complete confidentiality.
- Hybrid-type Zcash transactions allow some identifying details to be hidden and others displayed and come in handy when you need to audit a sensitive money flow.
Many governments don't like the fully shielded Zcash transactions, arguing that criminals can make money while hiding behind the encrypted data stream. Therefore, popular cryptocurrency exchanges like Coinbase and Robinhood Markets let you buy and sell Zcash tokens today, but they support only transparent transactions. That quirk essentially removes this cryptocurrency's most important difference-making quality, limiting the long-term value of the Zcash system as a whole.
This crypto could actually outgrow Bitcoin someday, but only if lawmakers worldwide accept the existence of truly anonymous digital payments or Zcash finds a way to work around the privacy problem. And that may very well never happen. However, it's much too early to give up on that dream.
Imagine a world where consumers and businesses are free to make truly anonymous payments with Zcash, similar to using an unmarked bar of gold or a massive bag of dimes. In that scenario, this billion-dollar cryptocurrency could eventually be worth several trillion dollars. Again, that could take a while, if it happens at all. Remember what I said about making small investments in these highly speculative names and you'll be fine either way.
