BTC, the King of the crypto world, has recently pushed past the $60,000 mark. This has suddenly garnered the interest of the majority in the cryptocurrency market. These digital assets are becoming a hot topic in the investment world, despite their highly volatile nature. And why is it so? Simply put, investors who jumped onto the ship when BTC and ETH, the two major cryptocurrencies, were still in their early stages have reaped some good benefits.
However, now that these two prices have soared high, investors feel it may be challenging to get into action. But the good news is that there are still lots of other altcoins out there which have great potential. And the best part, they currently have lower entry barriers. These two cryptocurrencies that are worth the mention are Cardano (ADA) and Polkadot (DOT). Bitcoin T-shirts and Hats still outsell Ethereum wearables almost 9 to 1, and the market caps reflect a similar following.
Over the past year, both ADA and DOT have seen unprecedented adoption and development. What’s more, these two currencies are neck to neck in terms of market cap alongside with other ten cryptos. Market analysts are even saying that ADA and DOT could be a threat to Ethereum. But why is it so? Read on to find out.
What Sets Apart ADA and DOT from the Other Cryptocurrencies?
To start with, Cardano blockchain hosts applications and smart contracts just as Ethereum. However, what sets Cardano apart is its unique double-layered architecture that gives the crypto better flexibility with its smart contracts.
On the other hand, Polkadot aims to connect individual blockchains efficiently into a single unified network. Most people will refer to Polkadot as the Internet of Blockchains. The most exciting part is how each of these cryptos shares a similarity with Ethereum. But before we decide if ADA and DOT really are a threat to Ethereum, let’s take a look at what you need to know about them.
1. Polkadot (DOT)
Polkadot is an open-source project founded by the Web3 Foundation. It is a sharded protocol to create a synergy in the operations of the blockchain networks. The Polkadot token DOT serves three primary purposes: bonding, staking, and governance over the network.
Unlike ADA, DOT is designed to coexist with the existing smart contract blockchain protocols instead of directly competing with them. That is why, in the investors’ eyes, DOT is very appealing due to this relationship. Knocking off ETH, an already widely utilized token, is not a walk in the park. Even with the backing of a technically superior project like Polkadot, it won’t be easy.
What’s the Future of Polkadot?
The future of the DOT token is bright. First, it has a large active community, a couple of ongoing projects in the ecosystem and the fact that it’s riding the Decentralized Finance concept. We might witness a great price action in its next market cycle.
And now that Tether (USDT) is the largest stable coin, has announced their plans to launch their coin on the Polkadot network, it could be a big move for DOT. Polkadot has no intentions of displacing other coins, but the inclusion of USDT on its network could make it possible for the users to transition between the networks hassle-free.
This development will add value for both Tether and Polkadot. That’s because this collaboration will fuse stability, scalability and affordability. Such projects will likely overcome some of the challenges hindering the growth of the network for years.
Will DOT Replace ETH?
There have been many people who firmly believe that Polkadot could eventually become the next Ethereum. With its high speed and fee-free transactions setup, DOT could become something even more remarkable.
Many developers are even considering using Polkadot’s network for their future blockchain networks. That’s because DOT provides these developers with the technical freedom and functionality they need.
Even better, Polkadot comes with much lower fees as compared to the Ethereum network. The growth of DeFi is simultaneously increasing the investors’ appetite for the Polkadot token. So far, the Polkadot token has proven to have exceptional capabilities. If you believe that it will get attention and adoption from developers as Ethereum did, it might be one of the cryptos worth watching this year.
2. Cardano (ADA)
In comparison to the other digital currency projects, Cardano is unique and for good reasons. Cardano defines itself as a third-generation blockchain, meaning that it tries to find solutions to problems that have faced its predecessors and have not yet been resolved. Also, unlike most digital coins, at this point, Cardano is still not fully implemented.
And seeing the progress that Cardano has made so far, supporters believe that ADA could throw off even some of the major currencies like ETH off the pedestals when it’s fully deployed.
How Can ADA give ETH a Run For its Money?
One of the leading contenders that Cardano has in mind is Ethereum. Currently, Ethereum dominates the smart contract space. However, ADA aims at offering smart contracts that could prove to be even more efficient than what Ethereum is presently offering.
What’s more, ADA is now available on the largest crypto exchange platform, Coinbase, for trading. It will also be available on Coinbase Pro. That means that ADA will soon be opened up to a much bigger audience
Besides that, Cardano has other selling points. Currently, Cardano has a potential connection to the red-hot NFTs trend. In fact, most traders are eyeing Cardano due to its potential for these non-fungible tokens. If it is possible to create these digital collectibles on the Cardano blockchain, this will be a significant catalyst for ADA’s price.
All in all, if you are an investor, you must understand that Cardano has not yet supported smart contracts or the NFTs. So, if you are anticipating getting in the NTFs stocks rally, you could add ADA to your watchlist.
Given everything we’ve discussed on both ADA and DOT, it’s pretty hard to tell which one will take over the crypto market. As we have seen, both these networks have the incredible potential of integrating blockchains. If Cardano can fulfil its potential of lowering transaction fees and increasing tech speed, then without a doubt, it might be a threat to Ethereum. On the flip side, if DOT can demonstrate sustainability in its operations, we could see an influx of developers and investors on the Polkadot network.