The crypto world is exploding. The total value of the crypto market, meanwhile, hovered near $1.5 trillion in late July.
“There’s a mainstream recognition now that crypto is more of an architecture and operating system, and that all kinds of products and services can be built on top of cryptosystems,” says Andreessen Horowitz general partner Katie Haun.
VC firms have poured an unprecedented $17 billion into the crypto space for the year through mid-June, and they’re diversifying the kinds of blockchain-related solutions they’re making.
Andreessen recently raised $2.2 billion for a new crypto NFT fund. NFTs allow creators to turn digital media, ranging from artwork to sports highlights to video game avatars, into collectible, tradable commodities. The firm’s recent NFT venture includes leading a $100 million funding round for NFT marketplace OpenSea that valued that company at $1.5 billion, along with an investment in Virtually Human Studio, which operates a virtual game that allows users to buy, sell, and breed NFT “racehorses.”
Ideally, your crypto investments should represent 5% to 10% of your total investments. Investors aim to have the majority of their crypto assets (60% or more) in safer, more established coins such as Bitcoin and Ethereum.
That aside, let’s look at the top cryptos some experts are looking to invest in and some of the risks associated with them.
Ethereum launched on August 4 a long-awaited hard fork, also called the London upgrade. A hard fork is a significant change to a network’s programming that makes older versions obsolete.
The hard fork will reduce the quantity of Ethereum on the market, improve transaction times, and stabilize fees, according to Coindesk.
However, there are some risks. The changes will reduce the fees miners receive, which may disincentivize Ethereum miners. This, in turn, could increase transaction times and pose a security risk. Plus, any major upgrade brings the risk of technical glitches and issues.
There are several interesting cryptocurrencies in the programmable blockchains space like Algorand. It’s faster, cheaper, and more environmentally friendly than Ethereum. The average transaction cost is a fraction of a cent.
Algorand can process 1,000 transactions per second (TPS) right now and expects to increase to 46,000 later this year. To put that in context, Ethereum currently processes around 15 TPS.
Algorand already has its smart contract capability up and running.
NFTs are a type of digital collectible, and Enjin users can build them, own them, and play with them.
Earlier this year, Enjin partnered with Microsoft and the popular video game Minecraft to create unique NFT heroes that players could use in the game.
Gaming is a promising blockchain sector, particularly because of the potential for players to own NFTs as in-game assets. Before, if a player bought something in a game, it would only belong to them in the game. The magic of NFTs is that players own them and can trade them in the real world as well.
Blockchain’s relatively slow transaction speed has so far held it back when it comes to running complex games.
- Bitcoin Cash
Bitcoin Cash works on blockchain technology that can store up to 8 MB of data, enabling faster transactions and lower fees. As per its value, Bitcoin Cash has not reached its peak potential yet, but the scalability it offers shows growth potential. During the beginning of 2021, it was trading for less than $500 and recently saw a spike of $1,500.
Cosmos is one of the most ambitious projects in the cryptocurrency space. The Cosmos network allows independent blockchains to transfer assets and communicate with each other on the network through Inter Blockchain Communication.
The Cosmos Hub has secured more than $120 billion in digital assets. The company behind this crypto coin is planning new launches like a network-specific decentralized exchange which will add more value and provide an advantage for Cosmos crypto investors.
According to several market experts, the best cryptocurrency to focus on is Polkadot. Polkadot is considered as the evolution of blockchain technology and what makes it class-apart is its speed, security, and governance. It is near the 10th largest in the cryptocurrency market.
Although it hasn’t gotten as much attention as the most popular altcoins yet, Polygon (MATIC) has shot up in value.
Over six months ago, one Polygon token was worth about $0.03. The price is now around $0.88, for an increase of over 2,800%.
Polygon is a protocol for building and connecting Ethereum-compatible blockchain networks. Its main benefit is that it solves issues with Ethereum, the most popular blockchain for decentralized finance (DeFi) applications. The biggest competition on the horizon for Polygon is Ethereum 2.0, also known as Eth2.