So, with the crypto market reaching all-time record high as Bitcoin, Ethereum, and Solana surge, I thought it was important to share with you some of the things people glaze over (especially timid Nigerian investors), forget about and seem to overlook with coins like Cardano, Bitcoin, Ethereum, Polkadot and many more.
Fun fact: ETH is now worth more than the market cap of the world's largest bank.
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Right now, Bitcoin and the entire crypto market are breaking out, as we're seeing it set to reach all-time highs. If we take a look at the cryptocurrency market cap (excluding Bitcoin), we have seen that we've finally broken above the $1.5 trillion market cap for the entire Altcoin market. This is something huge!
It's showing that we're about to break out. We're about to see all-time record highs into 2022. In addition to this, in terms of technicals, things are also looking great as well. “PlanB” – creator of the “Stock to Flow Model”, recently came out to speak about how in August he predicted $47k, September he predicted $43k, October he predicted $61k – which all came out to be correct predictions, as that was exactly what happened. And now, he's predicting a $98k target for November and $135k for December.
So right now, the overall crypto market is looking extremely good and this leads to many people just overlooking some of the potential issues with many cryptocurrencies. Everyone now all looks at the positives and yes I'm very bullish (I think we're going to reach new all-time record highs). It's important to realize some of the potential downsides, so you don't get surprised if prices ever drop or if prices are stagnant. So let's get right to the pros and cons of some of these coins.
(1). Cardano (ADA)
The majority of crypto investors own Cardano and the project itself has over 1 million followers on Twitter. It's a coin that I am personally extremely bullish on. Recently, in terms of positive announcements, they've had a lot of stuff going on with Africa (new partnerships) and have made new partnerships with big companies like Dish Network. They've also had a lot of other major developments in the NFT space and with their developers.
But, a couple of issues and things that people seem to overlook are;
• Cardano was late to the smart contract party. Meaning that – they didn't release their smart contracts until late 2021 and this gave other contracts like Solana and several other projects, time to develop and build out their ecosystem, while Cardano hadn't yet released their smart contracts. Although they have them now, the problem with this is that – they're still lacking in terms of development in the ecosystem. They have fewer projects than a number of other major cryptocurrencies and are lacking a bit here.
• The other potential downside/issue for Cardano is in the NFT space. Right now, they're lacking in NFT marketplaces. Their biggest NFT marketplace is CNFT.IO (Cardano Non-Fungible Tokens) and it's not as user-friendly as Solana NFT network and OpenC (which has Ethereum and Polygon NFTs).
Thoughts: So Cardano basically has two potential issues in my mind;
→They were a little late to the smart contract party, which invariably gave other companies to build out their network and could take a little more time for them to develop.
→ They're lacking in terms of NFTs. Most people now prefer to buy either Ethereum or Solana.
(2). Solana (SOL)
Solana is a coin many investors are very bullish on, but one of the big issues with it in the future is with regards to decentralization. This is the biggest concern about Solana, but many crypto investors overlook this.
Currently, there are 1,161 validators on Solana, which when compared to other blockchains like Ethereum, it's a very small amount. Ethereum boasts of over 200,000 validators, making Ethereum more decentralized than Solana. So while I'm bullish on Solana, this could present a couple of issues in the future.
Another thing is that we recently saw that Solana had to restart its entire blockchain due to a crash. It was loaded with too many transactions per second.
And the last thing with Solana that could be a potential issue is that, on Solana, if you look at how much is owned by “Insiders”, you'll find that 48% of Solana is owned by them, which is pretty high. And as for their public sale (pre-launch sale and all), you'll see that only a very small percentage was allocated to public sales.
(3). Ethereum (ETH)
Right now, Ethereum has seen a dramatic price increase, and with that, gas fees have also gone up as well, which in particular is the biggest problem for Ethereum. Ethereum gas fees have risen over 2,300% from June to November of 2021, and that's absolutely insane.
What this means is that – it's discouraging a lot of people from actually investing in Ethereum NFTs because these gas fees are too high. People do not want to spend – $50 to $70 for one transaction when buying an NFT, when they could just go ahead over to Solana, Polygon, or something else and buy two NFTs without worrying about any ridiculous gas fee.
Although we're seeing that ETH 2.0 is going to make Ethereum more energy efficient and help reduce some of the issues people face on the network, but still, gas fees are always going to be there for Ethereum, and even if ETH 2.0 rolls out, it helps reduce this.
As Ethereum gets bigger in the future, we're still always going to see that gas fees can potentially come up to be an issue, depending on how many people are actually using the network. So that's a big issue and it's deterring people currently from moving away.
And yes, it's something that I've experienced personally with my own NFT collection, it's something that many people have told me and a lot of people just don't like Ethereum for this very reason.
(4). Bitcoin (BTC)
Bitcoin is the largest, most popular and one of the most promising cryptocurrencies. Most worldwide institutions and organizations invest in Bitcoin, but the big problem with the crypto is how much electricity it is consuming every single year because it takes so much electricity and energy to mine Bitcoin. This has since become a major concern across the entire financial world and with governments around the world.
Fun fact: Bitcoin uses more electricity than many countries. In 2009, you could mine Bitcoin with a small setup in your living room or even study space, but today, you'll need an entire apartment full of specialized machines, each costing thousands of dollars to mine just one Bitcoin.
Although there are alternatives to mining Bitcoin with more renewable energy resources like solar or some other energy source, it's very important to keep in mind that these potential issues in case things pop up – like if the market hits and drops significantly.
EndNote: It's crucial to know both sides to any crypto you're investing in to be a knowledgeable and educated crypto investor. You wouldn't want to have blind faith and hope in the project, in order not to make irrational decisions and investments. Instead, you should be rational with your investments and to be that, you need to know to know about both sides of the investment.
Disclaimer: None of these is meant to be construed as investment or financial advice. They're just opinions and we urge everyone to do more deep personal research before investing their money anywhere.
I didn't write this to discourage or make anyone upset, but just to inform you on why you need to be rational when investing in any crypto. You need to be aware of both sides to everything. Hopefully, this opened your eyes a little bit more to the crypto world.
Make sure you check out our other blog posts for more information about the crypto market and trending entertainment headlines. Thanks for reading!
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