One of the most intriguing aspects of cryptocurrency is that it is decentralized by nature. While some coins and tokens have become industry leaders in terms of market capitalization, many others are carving their niches.
In this article, we take a look at some smaller cryptocurrencies that you may want to add to your watchlist in the coming years. We will discuss their unique features, competitors, long-term potential, and where they are most likely to succeed or fail.
Polkadot is a Cryptocurrency that is Worth Watching
Polkadot is a cryptocurrency that was developed by Web3 Foundation, which has its headquarters in Switzerland. Its main purpose is to act as an umbrella blockchain that lets other blockchains connect to it. This connection lets users interact with each other across different blockchains without having to go through third parties or intermediaries. The official token of the network is DOT, which allows members of the network to make governance decisions and store value on the network itself.
Why should I buy DOT?
If you are interested in owning multiple cryptocurrencies, DOT could be a good choice. It is likely to increase in value over time due to its unique architecture and use cases. If you are looking for a cryptocurrency beyond Bitcoin or Ethereum, this may be an excellent opportunity to invest in Polkadot. When compared to other currencies, its robust core features and low price per token are some key points that attract investors.
Plus, if you believe strongly in cryptocurrencies’ ability to decentralize the internet and give power back into people’s hands, then supporting DOT could be one way of showing your support for these ideals.
How to buy DOT? The native cryptocurrency to the Polkadot network is known as DOT. It can be bought from cryptocurrency exchanges such as Binance with BTC or ETH, or you can buy DOT directly with fiat currencies via ChangeNOW or Binance.
Tezos is an Exciting Coin to Watch
If you are looking for a specific example of a cryptocurrency that has seen its fair share of ups and downs over the years, Tezos is pretty much it. It has had a rocky development following the ICO phase, but it has emerged as one of the leading protocol projects in terms of technology.
While there are a few more technical differences between Tezos and Ethereum, at their core, they are doing essentially the same thing: allowing developers to build decentralized applications (called dApps). The main difference is that Tezos uses a delegated proof-of-stake instead of proof-of-work like Ethereum.
The future looks bright for Tezos. It has support from large investment firms and could see significant growth with adoption by institutions. That said, it still has some obstacles to overcome to keep pace with Ethereum and other protocols.
Zcash Could be a Contender in the Years Ahead
Zcash could be a contender in the years ahead. Zcash is a privacy coin that uses cryptography to enhance user anonymity. It is not entirely anonymous, but it makes transactions far more difficult to trace than Bitcoin. It was launched in 2016 by Zooko Wilcox and got its start as a fork of Bitcoin, but with added encryption features designed to improve upon the original bitcoin concept.
As with other decentralized cryptocurrencies, it relies on blockchain technology to process funding requests and exchanges of coins between users globally. Like many other cryptocurrencies, it can also be mined using specialized hardware and software computing power by individuals or groups. Compared to Bitcoin, however, Zcash offers some added features that enhance privacy and security: namely zk-SNARKs (zero-knowledge Succinct Non-Interactive Arguments of Knowledge).
This unique privacy feature obfuscates both transaction information such as sender/receiver addresses and payment amount details for all transactions on the blockchain ledger. Unlike most other crypto projects, which focus exclusively on enhancing speed and efficiency or developing new applications for an existing token (i.e., Ethereum), Zcash has focused laser-sharp on improving transaction security through its unique cryptographic protocol for obscuring data across its open ledger system.
As one of the top cryptocurrencies in the market, Cardano is a smart contract platform that aims to combine more advanced features with a robust consensus mechanism to scale and meet the user’s needs of today and in the future.
As a highly experienced team of developers behind it, they aim to create a platform that can power large-scale decentralized applications. Using a proof of stake consensus algorithm will allow for scalability features not seen in other smart contracting platforms.
The hype around Cardano is real. Especially since their recent partnership with New Balance. With this new partnership, New Balance hopes to use ADA as its primary currency for payments with what they call “Cardano Pay.”
Ripple is a blockchain technology that enables global payments for its clients. Its payment network, RippleNet, aims to increase speed and transparency and reduce the cost of international crypto payments. RippleNet has more than 300 customers.
Its goal is to provide liquidity to financial institutions when they need it. Liquidity means that money can be accessed when required without losing value or being tied up in investments. Financial institutions can buy XRP to use as liquidity on RippleNet or from each other when needed. Banks and payment providers can use XRP to source liquidity in cross-border transactions, reduce costs, and access new markets.
Stellar is an open payment network that was created by Jed McCaleb, who also started the Mt. Gox exchange and the Ripple payment system. It aims to connect financial institutions and allow them to facilitate cross-border transactions more cheaply and quickly than they currently can.
The Stellar network lets users send money to anyone, in any currency, anywhere in the world, in just seconds. The user’s local currency is automatically converted into Lumens (XLM), which are then transferred to another user’s account on the Stellar network, where they’re converted back into the recipient’s local currency of choice.
At this time of writing, one XLM equals about $0.30!
Keep an Eye on Smaller Cryptocurrencies
Why should you keep an eye on small-cap cryptocurrencies?
The chances of a small-cap coin becoming a market leader are much higher than that of a large-cap coin. A small-cap coin may be the only coin in its niche, but it will see growth if it does well and attracts users.
Larger names will likely acquire many smaller coins down the line as these companies look to expand their offerings. For example, Facebook is already looking at ways to leverage an existing cryptocurrency into its offering.
Smaller cryptocurrencies have more room to grow than larger caps, which have hit their limit as far as value is concerned. While a smaller value coin can go from $0.20 to $2 in a year, a large-cap coin might go from $3,000 to $4,000 for that same time frame, a marginal gain for the investment made by most users.