With only nine days left until the turn of the year 2021, one can say that cryptocurrency investors have another above-average year behind them. As of December 18, the total value of all digital currencies had increased 185%. Additionally, the market value of all cryptocurrencies has increased more than 1,400% since the March 2020 low.
While throwing an arrow at many of the most popular cryptocurrencies would have worked for investors last year, there are five cryptocurrencies that really turned out to be. So much so that they are sure to be on Santa’s lovely list this Christmas season.
Image source: Getty Images.
Solana
Would you like to know how to easily get on Santa’s nice list? Offer investors more than 11,000% profit since the start of the year. That’s it Solana (CRYPTO: SOL) for investors who had the luck, the stomach, and the change to buy it at midnight on January 1st.
Since old Saint Nick’s whole job is based on delivering gifts to households worldwide in one night, he will appreciate Solana’s need for speed. According to its developers, Solana is capable of 50,000 transactions per second (TPS). To compare the two most popular blockchain networks in the world, Bitcoin and ether (CRYPTO: ETH), process 7 TPS and 13 TPS respectively. In fact, the TPS advertised by Solana is more than double that of the payment processing king Visa (24,000 TPS).
What makes Solana so special is its unique proof-of-history log. Rather than wasting valuable time talking to each other to confirm the amount of time that has elapsed between events, the proof-of-history log creates a record of an event. This speeds up network processing and enables rapid scaling.
Although Solana stays a bit rough around the edges, its sheer speed gives it real long-term potential and stamina.
Image source: Getty Images.
Algorand
Another cryptocurrency that is sure to bring the Christmas cheer is Algorand (CRYPTO: SOMETHING). This lesser-noticed digital coin is up nearly 300% this year and looks set to have a bright future.
Like Solana, Algorand will grab Santa’s attention for the efficiency of its blockchain network. Last weekend, Algorand processed at 1,162 TPS and offered a block final of 4.36 seconds. This means that transactions are validated and processed in just over four seconds. In comparison, cross-border payments with existing financial infrastructure can take up to a week to be verified and processed.
The exciting thing about Algorand, however, is the project’s focus on blockchain interoperability. With so many unique blockchain projects under development, there is a risk that many will not be compatible with each other and therefore not be able to exchange files, data or money. Algorand developers are focused on filling these gaps, especially in the business world.
The icing on the cake is that Algorand also has a special consensus mechanism called the Pure Proof of Stake (PPoS). With PPoS, users are secretly and randomly selected to propose blocks and vote on proposals. Thus, PPoS ensures that malicious actors who own small amounts of ALGO cannot disrupt the network.
Image source: Getty Images.
Axie infinity
Santa Claus is sure to sit too Axie infinity (CRYPTO: AXS) on its nice list, especially when you consider how much fun it has given investors this year. The AXS token shot up 18,600% in 2021.
Axie Infinity is a earnest game based on the Ethereum blockchain. It enables users to collect, raise, breed, and fight monsters known as the Axies. At least three Axies are required to go into battle, with the winner receiving experience points that can be used to upgrade their Axies.
While there’s no shortage of games or gaming platforms to choose from, what’s fascinating about Axie Infinity is that every Axie is a non-fungible token (NFT). This means that users own their Axies as digital assets that can be used in gameplay or monetized in a marketplace (i.e. they can be bought or sold to other users).
What has really made it possible for Axie Infinity to exist is the real-world revenue that the game brings in. Axie Infinity generated $ 1.24 billion in trailing 180-day log revenue, according to TokenTerminal.com. This makes it the second largest decentralized application (dApp) by revenue over this period, after just Ethereum ($ 4.73 billion). These dollar numbers demonstrate the attractiveness of the real world.
Image source: Getty Images.
avalanche
A fourth cryptocurrency that was a real gift under the tree for investors this year is is avalanche (CRYPTO: AVAX). After starting the year at around $ 3 per AVAX token, Avalanche has grown over 3,500% to $ 116.
Similar to Solana and Algorand, the good news from Avalanche comes in the form of a very fast and highly efficient network. The Avalanche development team claims that its smart contracts-based network can process more than 4,500 TPS and complete transactions in less than two seconds. Smart contracts are protocols that help enforce, review, and negotiate a contract between two parties. They can be particularly useful in non-financial applications, such as supply chain management.
But what could be most responsible for getting Avalanche on Santa’s nice list is his ability to play well with others. As you can see, the Ethereum Virtual Machine is already running on Avalanche’s blockchain. While Ethereum is the preferred target for dApps development, Avalanche offers a damn good carrot given its faster execution, lower transaction costs, and clear competitive advantages over the Ethereum network.
Suffice it to say that Avalanche seems to have a lot of momentum through 2022.
Image source: Getty Images.
Cardano
The fifth and final cryptocurrency that found its way onto Santa’s lovely list is Cardano (CRYPTO: NO). A 625% gain through December 18th is more than enough to send investors onto the streets to Christmas carols.
The reason Santa is holding Cardano so high has to do with the “milk and cookies” that the development team left out for investors. In other words, Cardano’s developers are providing transparent updates on which direction the network will go next.
For example, the Shelley upgrade went live in July 2020. This upgrade increased the number of nodes that users can run on the network. In the course of this upgrade, the average number of daily transactions on Cardano’s blockchain rose from around 2,000 to over 100,000.
In September 2021, the much-anticipated Goguen update made its debut. Goguen brings smart contract capability to the Cardano blockchain, which in turn enables more complex transactions. Goguen is Cardano’s ticket to becoming a serious threat to Ethereum.
Looking ahead, the Hydra upgrade will make the most noise. Hydra maneuvers transactions to off-chain staking pools (i.e. Hydra nodes) which allows for rapid scaling without negatively impacting the processing efficiency of the main block chain. In short, it means that Cardano could eventually blow Visa’s 24,000 TPS out of the water.
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 reflect critically about investing and make decisions that will help us get smarter, happier, and richer.
