Cryptocurrencies have always been unpredictable. I mean, you can trust the digital security of any serious crypto name, but the value of each token started a thrilling roller-coaster ride when the first digital coin was minted. And the wild ride is not slowing down in 2023. After last year's hard crash, the digital currencies are showing their resilience with a spirited rebound that would make even the most jaded investor take notice.
Nobody can predict what the crypto market will look like next month or next year. Difficult to see. Always in motion is the future. Eventually, though, cryptocurrencies and other blockchain technologies will almost certainly change the world. The combination of publicly available data ledgers on a global scale and unbreakable transaction security is sure to disrupt how people and companies handle financial transactions, data management, and more. Just you wait.
And while you're waiting, why not invest in the blockchain future before the sector starts to skyrocket again? Amid the countless coins vying for a spot in the digital hall of fame, two tokens are making a strong case for a promising future. Whether you're already a seasoned cryptocurrency investor or just dipping your first toe in the digital waters, you should know what Ethereum (ETH -0.49%) and Polkadot (DOT -0.99%) are all about.
Ethereum: the concrete foundation of the digital future
Ethereum, the crypto juggernaut, has been a linchpin in the digital currency world for nearly a decade now. Currently boasting a market cap of $237 billion, it's earned its reputation as the go-to platform for smart contracts.
And this platform is bigger than it looks at first glance. On closer inspection, countless altcoins don't actually run their own blockchain networks. They often turn out to be Ethereum-based ERC-20 tokens. That's a quick and easy path to launching new crypto projects with Ethereum's security, decentralized management, and advanced smart contracts.
Shiba Inu is the most popular ERC-20 token right now, ahead of the high-speed Arbitrum network and the virtual gaming token of The Sandbox. Ethereum's open design makes these projects possible.
The second-largest cryptocurrency by total market value is currently trading around $1,986, and its recent price movements have been nothing short of exciting. It has gained 13% over the last month, and the year-to-date return is an impressive 70%. While down 34% from its all-time high in November 2021, Ethereum has some powerful upward momentum behind it.
One reason for this upswing is the recent progress toward a fully functional Ethereum platform on a proof-of-stake blockchain. The progress continued with Ethereum's Shanghai upgrade on April 12. This significant development introduced staking withdrawals and several smaller tweaks, pushing Ethereum's capabilities even further.
Co-founder Vitalik Buterin said that "the hardest and fastest parts of the Ethereum protocol's transition" are over and done with. The focus will now shift toward tackling scaling issues to make transactions faster and cheaper.
Make no mistake -- these upgrades are very important to Ethereum's owners. Why? Well, the system could break down if Ethereum trading and smart contract executions suddenly gain momentum again. In an online event around the Shanghai upgrade, Buterin said, "If we don't fix scaling before the next bull run, we know people are going to be stuck paying $500 transactions."
With a more mature Ethereum system on the horizon and its outsized impact on the blockchain ecosystem as a whole, this crypto titan is a solid choice for investors looking for long-term growth.
Polkadot: the digital glue of the Web3 vision
The trailblazing cryptocurrency known as Polkadot is earning attention among cryptocurrency enthusiasts, with its focus on connecting different blockchains. Funded and developed by the Web3 Foundation, Polkadot aims to revolutionize the web as we know it by creating a decentralized and interconnected ecosystem for the digital world.
The Web3 vision calls for various blockchain-based technologies to work together to move ownership away from central organizations and into the hands of content creators and consumers.
As of last December, around 550 Polkadot projects have been launched or are under development. The key innovation behind Polkadot lies in its ability to connect various blockchains and help them work together seamlessly. This allows developers to create applications that can interact with multiple blockchains, making collaborating and sharing resources easier between different projects.
The XCM communication standard at the heart of this interconnection effort was recently upgraded to version 3, making the Polkadot ecosystem even more decentralized and resilient.
Polkadot's parachains, or individual blockchains connected to the main network, provide a flexible and secure environment for projects to build upon. This cross-hatched network of blockchains enables a wide range of use cases, from decentralized finance (DeFi) to gaming, and helps drive the development of a more inclusive and accessible Web3 ecosystem.
As Polkadot grows and develops, it gets closer to realizing its vision of a connected, multichain future, making it easier for businesses to choose a Web3 platform without worrying about being locked into a single system. For everyday Web3 users, Polkadot promises a smoother experience by removing barriers between networks, ensuring that their data and assets can be used across blockchains.
Polkadot is an attractive investment opportunity for those looking to get in on the ground floor of the next generation of the web. Its innovative technology, dedication to a secure and connected Web3, and potential to reshape the internet as we know it make Polkadot a strong contender. In fact, I have recently converted most of my altcoin holdings into more Polkadot. This innovative crypto project is going places.
