3 Cryptocurrencies to Keep Your Eye on in 2022

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While the crypto market is being pounded by another round of FUD and sell-offs, the finance savvy investor might be looking to invest.

The world of digital tokens is getting increasingly more attractive for retail investors. At the same time, cryptocurrencies that are not as wasteful to mine as Bitcoin are taking the market by storm.

Mining crypto refers to the validation process of transactions taking place on the blockchain, a kind of decentralised public ledger. Miners who get this job done are rewarded with mining fees and new tokens. The proof of work system that Bitcoin, the largest cryptocurrency per market cap, employs depends on energy hungry computing power to validate transactions on its blockchain. Proof of stake, a process where investors stake their coins to become a validator on the blockchain, emits significantly less than the proof of work system or our current way of banking fiat money.

1) Avalanche (AVAX)

Avalanche, a blockchain eco-system developed by crypto company Ava Labs, has been pulling investors away from Ethereum, the second biggest cryptocurrency, for months. This earned Avalanche the nickname of ‘Ethereum killer’, even though it doesn’t want to be known like that.

This blockchain actually operates with multiple chains. The X chain is used to create AVAX coins and process financial transactions (for which it uses a very low emission proof of stake system). The P chain handles the staking itself and a C chain takes care of smart contracts, agreements coded in blockchain. This multi chain solution makes the Avalanche blockchain lightning fast. Avalanche’s Wilson Wu told us that their system handles 4.500 transactions per second.

The good: At the time of writing Avalanche is the 11th biggest cryptocurrency on the market, and its share will likely continue to balloon in the coming months as Ethereum faces more competitors like it. Avalanche is also looking to give away 10 million AVAX coins for new users to get familiar with the system. The price of AVAX has seen an increase of 80,8 percent in the last month, according to CoinGecko.

The bad: You probably won’t be mining your own AVAX coins any time soon. If you want to become one of the more than thousand validators on this network, you would have to stake about 2.000 AVAX coins. That’s more than 200.000 euro!

2) Filecoin (FIL)

Filecoin is another interesting protocol token. The aim of the Filecoin project is actually to store the most valuable information humanity has to offer and eventually revolutionize (and decentralise) the world of cloud storage.

The Filecoin system connects thousands of computers around the world to create a giant storage system which is available to users at any time. To mine Filecoins on the blockchain, the protocol uses its own unique system called proof of spacetime. Using this mining process, blocks are added to the chain by users who are storing data for others. That means miners actually earn tokens by providing storage space and serving data.

The good: Filecoin is a neat project to be a part of. This coin is relatively eco-friendly due to the blockchain system only using existing devices while validating transactions. A FIL coin is currently priced at about 45 euros.

The bad: Although decentralised and impossible to crack, the system of Filecoin still depends on local internet speed and availability. The Filecoin network itself still remains a pretty obscure dApp (decentralised app), rendering its adoption among the population rather slow. Don’t expect any crazy rallies when you’re holding this coin, but rather a steady growth. However, the price of the token did increase by 68 percent over the last 12 months.

3) Bitcoin (BTC)

Although Bitcoin remains one of the most polluting decentralised technologies (some researchers estimated the coin could have left a carbon footprint the size of London this year alone), many argue the cryptocurrency might actually be driving green energy now. Among those defending Bitcoin is Twitter CEO Jack Dorsey, who has made a Bitcoin tip jar available on his social media platform and is working on a decentralised exchange, mining system and wallet for Bitcoin with his payments company Square.

To understand Bitcoin is to understand crypto. It is the oldest cryptocurrency in the world and was invented in 2009 by an anonymous computer scientist, only known by his pseudonym Satoshi Nakamoto, to enable a global payment system, completely free from the control of banks and governments.

The good: Bitcoin is very likely to continue to play a central role in the story of cryptocurrencies. Buying your own stake in Bitcoin is pretty much universally considered to be the first stepping stone to crypto investing. There’s not a crypto exchange out there that doesn’t sell Bitcoin. Price outlooks for Bitcoin in 2022 are extremely bullish too.

The bad: Transaction fees for Bitcoin are still quite high and obviously there’s a lot of work to be done to make the mining process of this coin less polluting.

Source: Pexels (CC0).

3 Cryptocurrencies to Keep Your Eye on in 2022 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.