Here’s My Top Cryptocurrency to Buy Before the New Year

Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) gain the most attention in the cryptocurrency world due to their high valuations and large holder base. But they may not be the best way to invest in cryptocurrency for the long term.

If you believe, like me, that the real value of cryptocurrency is in utilities like gaming, art, ticketing, decentralized finance, and NFTs, then a fast and inexpensive cryptocurrency like Solana (CRYPTO: SOL) is a better place to put your money. And in 2022, I think Solana will make its debut in the general public.

A smiling person leans back in front of a laptop.

Image source: Getty Images.

Solana is just beginning

For years, cryptocurrencies have tried to integrate utilities into their blockchains, primarily in the form of non-fungible tokens, or NFTs. These mainly take the form of JPEG images, but they can unlock other benefits like accessing websites or other digital assets. Ethereum was the first blockchain to widely use NFTs with smart contracts. NFTs themselves were made popular with the launch of CryptoPunks in June 2017. NFTs have grown steadily on Ethereum since then with billions of dollars in market value every month.

Solana did not enter the NFT in any significant way until August 2021, just four months ago. “The Degenerate Ape Academy” was NFT’s first big launch on the platform with 10,000 monkeys sold in eight minutes and raising $ 2.5 million.

This launch launched a now thriving NFT ecosystem, from art to metaverse sites to public service projects. There are also a number of decentralized financial apps where users can put tokens and stablecoin. USD coin (CRYPTO: USDC) and help applications create a market, generating return for risk taking.

Most of these apps sprouted in just a few months. Now imagine what can be built on Solana by the end of 2022.

Solana Solves Biggest Cryptocurrency Problems

Traditionally, two of the biggest drawbacks of cryptocurrencies are their slow speed and high transaction costs. Bitcoin and Ethereum can have transaction costs of up to hundreds of dollars; you can see below that the average is a few dollars per trade. This is roughly the same as the credit card transaction fee for a purchase of $ 100 or more and applies even to the smallest transactions. Solana, on the other hand, has an average transaction cost of $ 0.000025.

Bitcoin Average Transaction Fee Table

Bitcoin Average Transaction Fee Data by YCharts

The speed measures are also in Solana’s favor. The network can process up to 65,000 transactions per second, comparable to the credit card giant Visa, and light years ahead of the 15 or more that Ethereum can handle.

Lower costs and faster speeds have two advantages. First, they drastically reduce the barriers to entry for new users. You can create a cryptocurrency account on Solana with $ 20 and buy some NFTs today. On Ethereum, this would not cover the average gas costs, nor the transaction costs for the network.

The second is that low costs allow more innovation by developers. Decentralized financial apps that can pool $ 5 from millions of users or games that can charge a few dollars for items could change the way we think about and interact with cryptocurrencies. If the financial frictions in a cryptocurrency’s ecosystem are reduced to near zero, the only limit to its potential is the imagination of the innovators and creators who build the ecosystem.

Illustration of a graphic going to the moon with a rocket.

Image source: Getty Images.

Building a cryptocurrency future

I think the next wave of cryptocurrency users and developers will mainly move to a low cost blockchain like Solana, which would give it a leg up on the competition, at least until the upgrade. Ethereum’s proof of stake that was pushed back at one point. in 2022. Solana may not yet be the largest cryptocurrency, as existing networks offer bigger projects and higher valuations, but it is a booming cryptocurrency. I think it is expected to significantly outperform the cryptocurrency market in 2022.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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John Bunyan Bristol (American 1826 - 1909)

John Bunyan Bristol (American 1826 – 1909)