5 Best Cryptocurrencies to Invest In for 2021 & 2022
In this post we’re going to look at 5 of the best cryptocurrencies to invest in. We’ll look at what each cryptocurrency does, the scope of it’s ambitions and why each one is a good investment choice.
Ethereum (ETH) is a blockchain based development platform for smart contracts and decentralized applications (dapps).
Ethereum also has its own cryptocurrency called Ether (ETH) which can be used for transferring money, buying goods or powering any of the products on the Ethereum network.
Ethereum’s features enables developers to create a wide range of products including:
- Decentralized Exchanges (DEX’s)
- Non-fungible Tokens (NFT’s)
- New cryptocurrencies via the ERC-20 Token standard
Every dapp, smart contract, token or cryptocurrency created on the Ethereum network needs ETH to power it’s usage. For example:
- Smart contracts take payments in ETH every time they execute.
- ETH is needed to create, sell and buy NFT’s.
- ETH is needed to create new cryptocurrencies on the Ethereum network as ERC-20 tokens.
- Transaction fees for ERC-20 tokens are paid in ETH.
- Transaction fees for Ethereum based DEX’s are paid in ETH.
All of these factors create a demand for the ETH cryptocurrency. Another factor that makes Ethereum a great investment is the upcoming Ethereum 2.0 or “Serenity” upgrade.
Ethereum 2.0 is an upgrade that aims to speed up transaction speed and drastically reduce transaction fees on the Ethereum network.
Ethereum 2.0 will accomplish this via beacon chains and sharding technology. A new Proof-of-Stake (PoS) algorithm will be implemented on Ethereum too.
Proof-of-Stake will allow investors to “stake” their ETH and earn passive income for securing the network. ETH holders will earn 4-10% just for staking their ETH.
Why Ethereum (ETH) is a good investment
Ethereum is the first blockchain to bring us new technologies such as smart contracts, NFT’s, ERC-20 Tokens and dapps.
Ethereum is also the most popular blockchain for all of these use cases. Once Ethereum 2.0 is fully implemented, Ethereum will be unstoppable and could possibly replace Bitcoin as the number 1 cryptocurrency.
Ethereum is a great investment since ETH is needed for any application, NFT, smart contract or product that runs on the network.
Combine this with the fact that Ethereum is the most popular blockchain development platform and it’s not hard to see why ETH will increase in value.
Staking is another huge reason why ETH is a promising investment. Retail and institutional investors can stake their ETH holdings and earn money in their sleep.
Ethereum (ETH) is currently $2,700 and I expect it to reach $10,000 in the long term.
How and where to buy Ethereum (ETH)
You can buy Ethereum (ETH) directly on CEX from any country in the world.
If you live in Europe (including the UK) you can also use Bitpanda to buy Ethereum (ETH) directly with cash.
Chainlink (LINK) is a decentralized oracle network that connects blockchain smart contracts to real world data.
Blockchains by themselves don’t have the ability to connect to external applications and data in a reliable manner.
Chainlink oracles operate on the LINK network, connecting off-chain data such as price information or events to smart contracts on the chosen blockchain.
LINK, the native cryptocurrency of Chainlink is used on the LINK network to pay contributors who provide off-chain data to data buyers.
The system works like this. Data buyers choose the data they need and data providers place bids to be able to provide that data.
Data providers stake LINK tokens for the ability to provide information to data buyers. Data providers only get paid if the information provided is reliable and satisfactory.
This is all part of the internal economy of the LINK network which drives a large part of the demand for the LINK cryptocurrency.
Why Chainlink (LINK) is a good investment
Connecting real world data to the blockchain via oracles is a big step forward in the blockchain space, and Chainlink has the first mover advantage by being the first cryptocurrency to enable this.
There are many important use cases for Chainlink oracles including supply chain monitoring, NFT generation and building price feeds for Defi apps.
Currently, Chainlink oracles have over 77 real life use cases, including:
- Decentralized Finance (Defi)
- External Payments
- Gaming, NFTs, and Randomness
- Enterprise Systems
- Supply Chain
- Authorization and Identity
Chainlink is a great investment since oracles are becoming increasingly important as blockchain technology becomes more mainstream.
Connecting real world data to the blockchain makes smart contracts more attractive to big industries. Oracles enable the automatic execution of invoices, bills, fines and more, saving valuable time and money for corporations.
Chainlink already has the first mover advantage and has made loads of progress with multiple working products under their belt.
Chainlink (LINK) is currently $31.78 and I expect to see at least $100+ in the long term.
How and where to buy Chainlink (LINK)
You can buy Chainlink (LINK) directly on CEX from any country in the world.
Polkadot (DOT) is a proof-of-stake blockchain that aims to interope (exchange information) with other blockchains.
Polkadot is designed to connect with all types of blockchains as well as oracles, allowing all systems to be used under the Polkadot blockchain.
One of Polkadots main features is it’s relay chain that allows it to connect with different networks. It also uses parallel chains or “parachains”, which are individual blockchains that work alongside the Polkadot blockchain.
Parachains improve scalability by running transactions on their own blockchains, this prevents the Polkadot blockchain from getting congested.
Another major feature of Polkadot is “shared security”. This is the ability for developers to create their own blockchains, whilst using the security of the larger Polkadot blockchain.
For example, with Ethereum, developers can create their own blockchains and tokens, however they also need to create their own security measures for that blockchain.
Polkadots cryptocurrency “DOT” is used to power the Polkadot network by paying for transaction fees, paying smart contracts, oracles and more.
Polkadot was founded by Gavin Wood, a co-founder of the Ethereum project.
Why Polkadot (DOT) is a good investment
At first glance Polkadot seems very similar to Ethereum, they‘re both blockchain platforms where developers can build dapps and deploy smart contracts.
However Polkadots biggest difference is it’s relay chains and parachains. Polkadot relay chains make it possible for dapps to communicate with other blockchain networks.
Parachains reduce the strain on the Polkadot network by running transactions on their own blockchain. They also enable the Polkadot network to cater to specific and niche use cases since each parachain is unique and self-governing.
Polkadot (DOT) is a good investment since interoperability (the ability for different blockchains to communicate with each other) will make it easy to transfer digital assets between different blockchains.
This is important since different companies will be using different blockchain networks for their needs. These companies will need an easy way to exchange data between the different blockchains.
Polkadots scalability also makes it a good investment choice since that is another big issue in the blockchain space.
Polkadot (DOT) is currently $24.58 and I expect to see $100+ in the long term.
How and where to buy Polkadot (DOT)
You can buy Polkadot (DOT) directly on CEX from any country in the world.
Uniswap is a decentralized exchange and defi protocol built on Ethereum. Uniswap uses smart contracts to enable the exchange of ERC-20 tokens (cryptocurrencies built on Ethereum).
According to Bloomberg, Uniswap is currently the largest decentralized exchange and the fourth-biggest exchange overall in the crypto space.
Uniswap is different from centralized exchanges in many ways. Firstly, users can instantly exchange ERC-20 tokens at the current market price, without the need for an immediate buyer or seller.
This is due to Uniswaps automated liquidity protocol, a system where users can pool their funds together to provide liquidity for tokens on the platform.
In return for this, liquidity providers receive a portion of the fees generated on Uniswap.
Secondly, since Uniswap is decentralized, users don’t need to deposit their crypto to trade, instead you just connect your Metamask wallet directly to the Uniswap app.
Once connected you choose the token you want to swap, the token you want to exchange it for and the amount of tokens to swap.
The price is calculated automatically using Uniswaps automated market maker system.
Finally, users can add their own tokens to Uniswap without paying an exchange fee. This makes it easier for investors to get access to new cryptocurrencies.
Uniswaps cryptocurrency “UNI” is used to vote on strategic decisions to the Uniswap protocol. 1 UNI = 1 vote, so the more UNI a user holds, the more voting power they have.
Why Uniswap (UNI) is a good investment
Decentralized exchanges have changed the way investors trade Ethereum tokens. Unlike centralized exchanges, DEX’s like Uniswap allow users to swap Ethereum tokens instantly from their own wallet.
Since you don’t have to deposit or withdraw any coins onto the Uniswap platform, you control your funds at all times. So if Uniswap ever gets hacked, your funds won’t be affected since they’re stored in your personal wallet.
Uniswap’s automated liquidity protocol is another game changer in the crypto space. With traditional exchanges you need to set a buy or sell price and your order is placed in a queue of other orders, this is known as an orderbook.
Your order is only executed once other traders buy or sell enough of your chosen token at the exact price that you set.
For example, let’s say that you want to place an order for 1000 coins of Imaginary Token (IMT) at 0.005 ETH each ($15), and the current market price is 0.008 ETH ($20) per IMT. You need to wait until there’s enough sell orders for IMT at 0.005 ETH ($15).
This could take anywhere from minutes, to hours and even days depending on the market conditions.
Even if you wanted to buy 1000 coins of Imaginary Token (IMT) at the current market price of 0.008 ETH ($20), there might not be enough sell orders for IMT at that price.
For example there might only be 300 sell orders for IMT at 0.008 ETH ($20), then 300 at 0.009 ETH ($23), 400 at 0.010 ETH ($25) etc.
This means you would have to pay more ETH if you wanted to buy 1000 coins of Imaginary Token since there isn’t enough liquidity to buy the coin at your chosen price.
This ultimately makes the cost of acquiring your chosen token more expensive, however this only applies if there is not enough liquidity for the token at your target price.
On the Uniswap app, their automated liquidity protocol allows users to instantly swap their tokens at the current market price without having to wait for a buyer or seller.
So with Uniswap, you would instantly swap your ETH for the Imaginary Token (IMT) at the market price of 0.008 ETH ($20).
This is powered by smart contracts called liquidity pools, which each hold balances of token pairs and use special rules to determine the token price.
Tokens are supplied to these pools by liquidity providers staking their tokens on the platform, which makes those tokens available to traders on the Uniswap app.
So in short, there’s no need to set a buy or sell price, investors can just swap their tokens instantly for the current market price.
Uniswap is currently the biggest player in the decentralized exchange market, it’s also the fourth biggest exchange in general. This combined with all of the above factors make Uniswap a promising investment.
As Uniswaps popularity grows, demand for it’s cryptocurrency UNI will grow too. Liquidity providers especially will seek to acquire as much UNI as possible so they have more voting power on the platform.
Uniswap (UNI) is currently priced around $23.
How and where to buy Uniswap (UNI)
You can buy Uniswap (UNI) directly on CEX from any country in the world.
If you live in Europe (including the UK) you can also use Bitpanda to buy Uniswap (UNI) directly with cash.
Previously known as Matic, Polygon is a protocol and framework for building and connecting Ethereum-compatible blockchain networks. It also functions as a Layer 2 scaling solution for Etheruem.
The platform aims to address some of Ethereum’s biggest challenges which include high gas fees, slow transaction speeds and poor user experience.
Polygon plans to solve these issues by providing a simple framework that enables developers to launch their own preset blockchain networks with a single click.
The platform started off as Matic Network, but was later rebranded to Polygon as the scope of the project expanded. Matic Network was originally built as a Layer 2 solution to improve Ethereum’s scalability.
Polygon has since expanded on that mission to enable the creation of multiple, interconnected and self-governing blockchains that can communicate and collaborate with each other.
Polygon’s cryptocurrency is MATIC. The token powers the Polygon network by paying for transaction fees and by validators staking their MATIC to confirm transactions.
Why Polygon (MATIC) is a good investment
Polygon is addressing Ethereum’s major issues, including transaction fees and speed.
For example transaction fees on Polygon are almost free, costing less than 0 MATIC for most transactions.
Compare this to Ethereum’s transaction fees which cost around $3-$4 on average and can reach up to hundreds of dollars when the network is congested.
Polygon is also much faster than Ethereum with transaction speeds taking less than 5 seconds each.
With Ethereum, the average transaction time is 8-10 minutes, but that can slow down considerably when the network is congested.
These factors make Polygon an attractive platform for blockchain developers, and as more developers join the Polygon network, the more MATIC will appreciate in value due to demand and speculation.
Solving the scalability problem and allowing developers to deploy their own blockchains with one click will make it easier and cheaper for developers to create Ethereum based dapps.
This will increase adoption for decentralized applications which will have a major impact on the major blockchain industries including:
- Decentralized finance (Defi)
- Decentralized exchanges (DEX’s)
- Non-fungible Tokens (NFT’s) and more.
Another factor that makes Polygon a promising investment is the fact that it’s backed by Coinbase Ventures, the team behind Coinbase, a popular crypto exchange. A billion dollar crypto exchange company having faith in Polygon is a very good sign.
Polygon (Matic) is currently floating around $1.50 and I believe we’re still early. I can see the price reaching double digits in the long term.
How and where to buy Polygon (MATIC)
You can buy Polygon (MATIC) directly on CEX with cash from any country in the world.
If you live in Europe (including the UK) you can also use Bitpanda to buy Polygon (MATIC) directly with cash.
Cryptocurrencies are a great way to make money for investors and the best cryptocurrencies are the ones which will actually make a difference in the blockchain space.
Below is where you can invest into each cryptocurrency mentioned in this post:
- Ethereum (ETH), Chainlink (LINK), Polkadot (DOT), Uniswap (UNI) and Polygon (MATIC) can be bought directly with cash from CEX (global) and Bitpanda (Europe).
What do you think about the cryptocurrencies mentioned in this post? Do you have any opinions or any questions? If so, leave them in the comment section below.
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