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Are these cryptos the next Bitcoin or Ethereum?


OWhile there are literally thousands of cryptocurrencies, when it comes to the big dogs, there are really only two: Bitcoin and Ethereum. Bitcoin is the original crypto, created in 2009, and Ethereum was created as the “Bitcoin killer” in 2015. Together, the two account for nearly two-thirds of the crypto’s $1.3 trillion global market cap, with Bitcoin alone accounting for nearly half.

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Although their prices have been volatile, both coins have provided exceptional long-term returns since their respective inception dates. This is part of the reason why investors have jumped into alternative cryptocurrencies, hoping to choose “the next Bitcoin or Ethereum”. But how likely is another crypto to rise to prominence like the two market leaders?

Here are three cryptocurrencies that various experts and market analysts believe have a chance of being contenders.

Solana

Solana quickly became a favorite among traders to become “the next” Ethereum in late 2021, when its price soared to over $260. Since then, it has dropped dramatically to below $40 in June 2022. However, the general crypto market has been hammered in 2022, and Solana still maintains a market capitalization of around $13.5 billion, good enough to rank it as the ninth-largest cryptocurrency.

One of the reasons Solana has often been touted as a crypto of the future is that it is the only major cryptocurrency blockchain that uses proof of history. Proof of history is supposed to be extremely fast compared to the proof of work protocol used by cryptos like Ethereum, and it also has lower fees.

Solana claims to be able to process around 50,000 transactions per second, compared to 15-45 transactions per second handled by Ethereum. This can allow Solana to grow rapidly, one of the main requirements for a coin to catch up or even surpass the industry leaders Bitcoin and/or Ethereum.

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These features have helped Solana earn the trust of major institutions like JPMorgan Chase and Bank of America, which once said Solana could become the “Visa of the digital asset ecosystem”.

Currently, Solana runs over 400 projects on its ecosystem, including decentralized exchanges, wallets, and other defi projects. Stablecoins like Circle’s USD Coin also work on the platform. Given its low cost and scalability, the future may still be bright for Solana.

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While Solana has gained popularity for being faster and cheaper than Ethereum, Cardano aims to beat the top cryptos by being a more environmentally sustainable alternative. Cardano was actually developed by one of Ethereum’s creators, Charles Hoskinson, suggesting that Ethereum may be based on older technology and principles than Cardano.

Indeed, Cardano was designed as the first proof-of-stake cryptocurrency, designed to provide a faster, cheaper, and more secure blockchain.

Cardano’s approach is more research-driven than Ethereum’s, with every stage of its development being peer-reviewed and thoroughly tested before implementation. The third-generation crypto is also launching smart contract capabilities, which will help make Cardano more sustainable and scalable. As some analysts describe it, Bitcoin is Crypto 1.0, Ethereum is Crypto 2.0, and Cardano is Crypto 3.0.

Cardano is actually the sixth largest cryptocurrency, with a current market capitalization of around $30.5 billion. Like most other cryptos, Cardano’s price has been hammered. After peaking at around $3.10 in September 2021, Cardano now sits at just $0.58, demonstrating the immense risk of investing in even market-leading cryptocurrencies.

Spotted

Polkadot is the 11th largest cryptocurrency, with a current market capitalization of around $9.3 billion. Polkadot’s “special talent” is its interoperability, or its ability to connect multiple blockchains together into a single network. Being part of a single network, these many blockchains can exchange information without compromising security by leaving the network. This type of secure protocol is considered by some to be essential for the future of Web3, or the decentralized digital ecosystem.

As with Cardano and Solana, Polkadot aims to outperform Ethereum in terms of cost and scalability. But what can differentiate Polkadot from either of these other cryptos is its interoperability.

Unlike many other cryptocurrencies, many investors buy Polkadot not only to speculate on the currency itself, but also to bet on the success of its underlying technology. If this trend gains momentum, it could help Polkadot’s price remain less volatile than other cryptos, which in turn could attract other long-term investors.

However, Polkadot still remains quite volatile, dropping from a 2021 high of $55 to its current level below $10.

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This article originally appeared on GOBankingRates.com: Are these cryptos the next Bitcoin or Ethereum?

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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