Cryptocurrencies are having their best time on record. This year, the Bitcoin price has soared to more than $40,000, and its market cap jumped to more than $753 billion. Other cryptocurrencies like Ethereum and Litecoin have also surged, pushing the combined market cap of currencies to more than $1 trillion. In this article, we will look at four of the best upcoming cryptocurrencies that you should pay a close attention to.
Polkadot is a fast-growing digital currency started by Gavin Wood, a computer programmer who is best known for co-founding Ethereum. The currency goal is to solve the main problems facing the “traditional” blockchain projects. It does this by providing a new architecture, known as the heterogeneous multi-chain, which helps solve the challenge of extensibility and scalability.
Most importantly, Polkadot’s network helps to connect private and consortium chains with the already public ones such as those built in the Ethereum network.
Polkadot has been in high demand in recent years. This has seen the price of DOT rise from less than $2 in the past few months to $9. At the same time, its market cap has skyrocketed to more than $9 billion. This makes it the eighth biggest digital currency in the world. The bigger ones are Bitcoin, Ethereum, Tether, Ripple, Litecoin, Cardano, and Bitcoin Cash.
Polkadot vs. Bitcoin
Chainlink is a relatively young digital currency that has moved from obscurity in recent months. The network was started in 2017 by Sergey Nazarov, a 32-year old computer programmer. The network helps to move data from off-blockchain sources like a school and hospital to an on-blockchain network like smart contracts.
It moves these items through oracles, which are the middleware that translates data from the real world to the blockchain. For starters, a smart contract is a set of agreements that are only fulfilled using blockchain technology. They are not controlled by anyone.
The network is made up of three vital components. First, it has the Chainlink Reputation Contract that checks the track record of the oracle’s provider. Second, it has a Chainlink Order-Matching Contract that delivers the Requesting contracts request. Finally, there is the Chainlink Aggregation Contract that takes all this data and validates it.
LINK has been in high demand recently. It has jumped by more than 600% in the past year. This has brought its market cap to more than $6.44 billion, making it the tenth biggest digital currency in the world. It has also outperformed Bitcoin, as shown in the chart below.
Bitcoin vs. Chainlink
Wrapped Bitcoin (WBTC)
Bitcoin is the best-known cryptocurrency in the world. Over the years, many digital currencies have been born from its network. The best-known ones are Bitcoin Cash and Bitcoin Gold. The newest variant is known as Wrapped Bitcoin (WBTC).
Wrapped Bitcoin is a network that helps to join the world of Bitcoin with the Ethereum network. That’s because when you own Bitcoin, there is no bridge that connects you to the Ethereum ecosystem.
To a large extent, Wrapped Bitcoin can be viewed as a stablecoin; those digital currencies tied to fiat currencies. Indeed, the WBTC is backed on a 1:1 basis with Bitcoin. The main benefit of doing this is that it lets owners interact well with the Decentralised Finance (DeFi) industry that is mostly based on the Ethereum network. Also, many DeFi projects like Maker have now started allowing their borrowers to use WBTC as collateral for their borrowing.
Another benefit you get if you invest in WBTC is that its price tends to track that of Bitcoin, as shown below.
WBTC vs. BTC
To understand what Maker is, you need to know more about DeFi. The Decentralised Finance industry is changing how global finance happens. In the traditional world, the financial industry is highly regulated. This has hindered many companies from operating in many countries.
For example, an American bank cannot lend easily to a UK-based person. As such, the DeFi industry is changing this by making it possible for people to build global products using the network.
Today, there are hundreds of DeFi projects, which are valued at more than $20 billion. Of these, Maker is the biggest, with more than $4 billion being locked in the network.
MakerDAO is, therefore, a lending platform built on the Ethereum network. It supports a currency known as Dai, which is pegged to the US dollar. Therefore, holders of this Dai can borrow a certain amount of money in the network. They can also lock their Dai and earn interest.
MKR has also been in high demand. This has pushed its price by more than 300% in the past 12 months. This has brought its total market cap to more than $1.3 billion, making it one of the biggest currencies in the world.
Maker vs. Bitcoin
Like Maker, Aave is a DeFi project that is in the lending industry. It has liquidity of more than $3.16 billion and is built on the Ethereum network. Users in the system can borrow and even invest. Members can borrow against most of the supplied assets, which include Dai, Tether, Yearn, and even Gemini.
Aave has also been on an upward trend since it went public a few years ago. It has jumped by more than 260%, bringing its market cap to more than $1.39 billion. This makes it the 26th biggest digital currency in the world. As shown below, it has done well in the past few months.
Aave vs. Ethereum and Bitcoin
The digital currencies industry is a substantial one. There are more than 4,300 digital currencies in the world that have a market cap of more than $1 trillion. If they were a single company, they would be the fourth-biggest in the United States.
While some of the currencies in existence today are great, most of them are not worth your time. Therefore, if you are interested in investing in Bitcoin, we recommend that you focus mostly on large-caps like Bitcoin, Ethereum, and Litecoin. However, you should also study some of the upcoming ones to see whether they are investable.