Ethereum (ETH) is the second largest cryptocurrency in terms of market capitalization and its price has risen over 150,000% since it was first launched in 2015. However, its performance this year – an increase of 500 % from January 1 – the comparison with currencies that have produced profits over 5000% fades.
One reason why many arguments have surpassed Ethereum
It is fair to say that Ethereum revolutionized our ideas of what blockchain technology could do. Where Bitcoin (BTC) uses the blockchain as a sophisticated book to track its decentralized money, the Ethereum blockchain can store smart contracts. Intelligent contracts are small pieces of self-executing code that empower things like decentralized finance applications (DeFi).
The first Ethereum mobile still hosts most applications. But it has also been a victim of its success. The network is overloaded and users complain about high transaction fees. As a result, a host of newer, faster and cheaper platforms – the so-called Ethereum killers – are digging into the foothills. And some of them have seen dramatic price increases this year.
Indeed, according to CoinMarketCap data, out of the top 100 cryptocurrencies by market capitalization, 41 have surpassed Ethereum since the beginning of 2021. We have selected five that look like they will continue to perform well.
1. Solana (SOL)
2021 could be Solana’s year. The super fast platform of smart contracts has gained over 11,000% since January 1st. Like Ethereum, it is a programmable blockchain. It currently hosts over 500 different projects, from fixed tokens (NFT) to DeFi applications.
The reason Solana caught people’s attention is that it is able to process over 50,000 transactions per second (TPS), and each costs a fraction of a cent. To put this in context, until Ethereum can complete its ambitious upgrade to Eth2, it processes only 15-45 TPS. Costs vary depending on how busy the network is, but can reach over $ 100.
2. Cardano (ADA)
Cardano is another programmable blockchain that has a different approach to many cryptos on the block. It reviews each stage of its development prior to implementation. As a result, development has been slower than other similar projects – it launched intelligent contract capability only in September.
However, in theory, Cardano is built to stay – and that is why it remains one of the best cryptocurrencies by market capitalization and has gained almost 1000% since the beginning of the year. What is also interesting about Cardano is that he has spent a lot of time building real-world partnerships and use cases. For example, it has a partnership with the Ministry of Education in Ethiopia to store student academic data in the blockchain.
3. Polygon (MATIC)
Solana and Cardano are both called Layer 1 solutions – which means that everything is integrated into the original blockchain. There is another set of cryptocurrencies called Layer 2 solutions, which aim to solve Ethereum problems by adding an additional processing layer on top of the existing blockchain.
Polygon is a leader in this field, hence its growth of 9,000% plus this year. It calls itself a Layer 2 solution builder, which means it offers several different ways to improve Ethereum performance. Instead of offering a single solution for everyone, developers can choose the path that works best for their project.
4. Decentraland (MANA)
Metaverse signs have flown in this year – all the more so after Facebook announced it would be renamed Meta. It is no surprise that the world’s leading 3D virtual earth has surpassed Ethereum by an increase of over 4,600%. Players can use MANA to pay for goods and services in Decentraland, as well as to buy and develop land there.
Keep in mind, given that Decentraland is currently built on the Ethereum ecosystem, it can be argued that a win for MANA is also a win for ETH.
5. Helium (HNT)
Helium is one of the few cryptocurrencies that use blockchain technology to solve real-world problems. In this case, members of the Helium community run a series of powerful wireless hotspots, called LongFi. Hotspots empower the Internet of Things (all Internet-connected devices). When people use the network, hotspot owners earn HNT marks.
The appeal of Helium is that it can provide free and secure internet access worldwide – which is probably why the price of crypto has risen over 3,000% this year.
Smaller cryptocurrencies carry more risk
All of the currencies listed above are available from the best cryptocurrency exchanges in the US. But before you dive in, make sure you do your research and understand how projects are likely to work in the long run.
Indeed, it is not really fair to compare Ethereum with coins that are smaller, newer and more dangerous. All cryptocurrencies carry risk, but Ethereum’s relative longevity and $ 500 billion market capitalization make it a more secure investment. There are currently 14,000 cryptocurrencies on the market and many have not produced 500% Ethereum profits this year (not to mention 150,000% of it since the beginning). Smaller coins can produce higher rewards, but they also have a higher chance of failure.
What is interesting about the five signs listed above is that each presents a clear solution to a problem – whether it is upgrading to the Ethereum ecosystem or securing money for a new virtual world. And this is something worth looking into in any crypto project.