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Missed Ethereum? My top cryptocurrency to buy right now

Since its premiere in 2015 ether has played a crucial role in the advancement of the blockchain utility. In particular, the concept of programmability was introduced, which enables developers to write self-executing code (smart contracts) on the blockchain. This technology has in turn evolved into decentralized applications (dApps) and decentralized financial products (DeFi).

Driven by this innovation, Ethereum’s price has soared 881,500% since its low in October 2015 and is currently by far the largest DeFi ecosystem. For both reasons, Ethereum still looks like a worthwhile investment, but the chances of recurring are virtually non-existent. So if you are looking for a cryptocurrency with moonshot potential, you better look elsewhere.

For example, Speckle (CRYPTO: POINT) has an ambitious vision backed by an experienced founder. Here’s what you should know.

Image source: Getty Images.

The foundation of Web 3.0

Polkadot was designed by Gavin Wood, co-founder and former chief technology officer of the Ethereum Foundation. He actually invented Solidity, the programming language used to create smart contracts on Ethereum. Wood also co-founded the Web3 Foundation, a nonprofit group working to build a decentralized version of the Internet known as Web 3.0.

If successful, this technology would allow users to access secure web applications that are beyond the control of third parties. Just like today’s internet, these dApps can be anything from financial services and productivity tools to video games and social media platforms. But unlike today’s Internet, no company would collect user data in the background. Polkadot is at the heart of this vision.

For this purpose, the Polkadot blockchain is uniquely structured. The core is the relay chain, a blockchain based on the energy-efficient proof-of-stake consensus. The task of the relay chain is to orchestrate and secure various programmable side chains (so-called parachains). Polkadot also supports bridges, a special type of parachain designed to communicate with external networks.

This means that Polkadot is interoperable with other blockchains and makes it possible to exchange data with platforms such as Ethereum. This feature is vital as the future of blockchain technology is likely to be made up of many bespoke chains, each with a specific use case, that can all interact.

The polkadot ecosystem is growing

In November, Polkadot began auctioning Parachain slots to blockchain project developers. Only five auctions have taken place so far, with the DeFi platform Acala winning the first and the Ethereum bridge Moonbeam winning the second. Both Parachains are slated to join the relay chain on December 17th, marking a pivotal moment in Polkadot’s history as both Acala and Moonbeam could dramatically accelerate the growth of its dApp ecosystem.

The auctions will continue for some time at regular intervals with the long-term goal of reaching 100 parachains. At this point, Polkadot’s throughput could reach 1 million transactions per second (TPS), making it far more scalable than virtually any other blockchain platform, although there is at least one exception.

People sit around a table and discuss financial charts.

Image source: Getty Images.

The investment thesis for Polkadot

Polkadot is energy efficient, highly scalable and interoperable with other networks and solves several problems that are currently hampering other blockchains. From that perspective, Polkadot could certainly power Web 3.0, or at least a thriving ecosystem of dApps and DeFi products, and that’s at the heart of the investment thesis.

DeFi products and dApps are not free. In exchange for securing transactions, validators collect transaction fees from users, and these fees are paid in native cryptocurrency. In the case of Polkadot, that means DOT token. In other words, as more developers, consumers and investors adopt products on Polkadot, the demand for DOT should increase, which drives the price higher.

Likewise, owning DOT makes you a stakeholder in the Polkadot ecosystem. That means you can propose and vote on changes and earn rewards by staking DOT tokens. Currently, these rewards would be 13.8% on an annual basis (before commission fees). If Polkadot does become the foundation of Web 3.0, owning some of that infrastructure will be a very compelling investment.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all reflect critically about investing and make decisions that will help us get smarter, happier, and richer.

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