3 way more thrilling cryptocurrencies than Dogecoin, in line with one crypto skeptic – Motley Idiot

For more than a century, the stock exchange has been the undisputed leading wealth creator. While it doesn’t outperform the returns on gold, real estate, or bonds every year, it delivers the highest average annual return of any of these investment vehicles over the long term.

But in the past decade, cryptocurrencies have stormed the investment scene and become a formidable challenger to stocks. In fact, some of the most widely tracked digital currencies have seen returns in the five- and six-digit percentage ranges. This includes the “people’s currency”, Dogecoin (CRYPTO: DOGE), which galloped 27,000% higher within six months between the beginning of November 2020 and the beginning of May 2021.

A person is typing on a laptop that is displaying a rising stock chart.

Image source: Getty Images.

Dogecoin lacks a competitive advantage

But not everyone is on board with the rise of cryptocurrencies. I consider myself a full blown crypto skeptic. I don’t own digital currencies, have no short-term plans to buy them, and believe the market is in a massive bubble that is in dire need of cleanup.

Of all the digital currencies that investors could invest their money in, Dogecoin is the most astounding. That’s because it doesn’t do anything very well. In other words, if you want a network and a tethered token to replace the existing financial infrastructure, it better offers clear benefits. Dogecoin doesn’t offer any of this.

In no particular order:

  • Dogecoin transaction fees are significantly higher than most common cryptocurrencies.
  • The average time it takes to validate and settle transactions is slower than many of the same networks that have lower (or nonexistent) transaction fees.
  • The average number of daily transactions completed on Dogecoin’s blockchain has recently dropped to a three-year low, suggesting poor adoption.
  • It has practically no practical use, only a little over 1,400 mostly obscure companies accept it as a means of payment.

I don’t see a future where Dogecoin will play a significant role in transaction capacity.

This trio of cryptocurrencies has a more exciting future than Dogecoin

However, I find a number of digital currencies and blockchain projects in the crypto space exciting. To reiterate, “exciting” doesn’t mean go out and buy it right away. As I said earlier, I believe the crypto market is grossly overrated considering how little functionality it has shown in the real world so far. But with a lot of time, these following three cryptocurrencies could be success stories – and will almost certainly have turned circles around Dogecoin.

A person holding up a gold-colored coin with the Ethereum logo emblazoned on it.

Image source: Getty Images.

ether

I know I’m not going to score points for originality here, but that’s not my intention anyway. ether (CRYPTO: ETH), the second largest cryptocurrency by market capitalization, is arguably the most exciting digital currency.

The big selling point for Ethereum has long been the use of smart contracts. These are protocols that review, facilitate, and enforce the negotiation of a contract. For example, if two parties agree that a certain action should be taken when the conditions are met, smart contracts can handle it. This could mean fulfilling a grandson’s wishes many years later when a grandson reaches a certain age, or maybe reordering a business once a certain percentage of an item has been sold.

Right now, Ethereum is set to generate a lot of buzz because of its role in decentralized finance, or DeFi. DeFi aims to use smart contracts on a financially focused blockchain to bypass the financial intermediaries who have the potential to slow down or refuse transactions altogether. But it’s the non-financial uses of Ethereum and how it could streamline supply chains that excite me.

In particular, the Enterprise Ethereum Alliance has more than 100 members, each of which is focused on promoting the use of the Ethereum network. While some of these EEA members are banks – note that I’m not gauging the role of Ethereum’s ether token in the future – it is much more telling that a large number of these companies are in the tech sector or are focused on logistics. This contains FedEx, Microsoft, JUICE, and modern micro devicesto name a few.

The blockchain network with the greatest chance of acceptance in the real world makes Ethereum the simple digital currency to monitor.

A silver Stellar Lumen coin with a rocket ship logo.

Image source: Getty Images.

Stellar

Something off the radar than Ethereum that got me excited is Stellar (CRYPTO: XLM). Stellar is the 22nd largest cryptocurrency by market value ($ 8.4 billion) (as of September 1).

While Ethereum piqued my interest in its non-financial applications, Stellar and its Lumen coin are fascinating for their potential in the payments space.

If the infrastructure is in place, it can take up to a week to validate and process a cross-border payment. Meanwhile, more than 180 different fiat currencies can be converted into lumens on the Stellar blockchain, sent across the oceans and fully validated and processed within seconds. In addition, Stellar claims to be able to process up to 3,000 transactions per second. In some contexts, that’s still a long way from the payment kingpin Visathat can process up to 24,000 transactions per second. But compared to Dogecoin (40 transactions / second), Stellar offers serious validation and billing advantages.

Despite this efficiency, the fees for transactions on Stellar are microscopic. The average transaction costs 0.00001 lumens, which translates into an average fee of approximately $ 0.00000 per transaction. In other words, it would take a user about 250,000 transactions to earn the equivalent of about $ 1 in fees. That’s insanely cheap considering how effective this network could be.

The last thing to note about Stellar is that it has attracted well-known project partners. Stellar in particular has worked with. teamed up IBM four years ago to enable blockchain-based international payments for a dozen major banks in the South Pacific. Strictly speaking, Stellar is a name to watch out for.

A person holding a shimmering golden lock surrounded by latticework that represents a blockchain.

Image source: Getty Images.

Cardano

A third exciting cryptocurrency that seems to have a much better future than Dogecoin is Cardano (CRYPTO: NO). Cardano is probably no stranger to crypto enthusiasts as its ADA token has done incredibly well, with a gain of more than 3,700% over the past year.

What I find particularly interesting about Cardano is the transparency of its developers and the clearly defined multi-layered approach that these developers are pursuing to further decentralize the network, improve acceptance and expand the range of applications for blockchain technology.

Last year, Cardano’s developers launched the Shelley upgrade, which ultimately increases the number of nodes network subscribers can run. Since the release of this upgrade, the average transaction volume on the Cardano network has increased from 1,000 to 3,000 transactions per day in 2019 to between 24,000 and 42,000 per day in 2021. While some of this is certainly related to the outperformance of its ADA coin, it is also a clear sign of a development leading to increased adoption.

However, what is really getting people excited is the Goguen update, which is slated to go mainstream this month. Goguen will integrate smart contracts into Cardano’s blockchain, opening up financial and non-financial applications for this most powerful cryptocurrency. According to Goguen, developers will focus on improving the scalability of the network.

To reiterate, my intrigue over Cardano is not a confirmation of buying the ADA token now. But the transparent development process presented by Cardano has not gone unnoticed. It’s definitely worth keeping an eye on, as blockchain projects vie for real-world experience.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.


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