2 cryptocurrencies that could dwarf Shiba Inu

One is a market leader. The other is an up-and-coming player.

| More on:
Rising rocket with dollar signs.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shiba Inu is known for two things: Its mascot, the Shiba Inu dog. And its jaw-dropping 2021 performance. The cryptocurrency surged 45,000,000% last year. It's pretty much impossible to predict that sort of enormous short-term gain. But there are elements that can help us pick potential long-term winners in this dynamic market.

When I say winner, I'm referring to cryptocurrency players that have what it takes to attract more and more users and investors. And that eventually should lead to an increase in market value. The following two players could dwarf Shiba Inu over the long term. They offer more real-world utility. Both of the following players are blockchains that can host decentralized applications (dApps). And, unlike Shiba Inu, they aren't limited by a massive circulating supply of tokens. Let's check them out.

1. Ethereum

Ethereum (CRYPTO: ETH) already is a leader in the cryptocurrency market. It's the second largest by market value after Bitcoin. But Ethereum has room to grow. And that could happen soon. Here's why. Ethereum right now is tackling its biggest problems: transaction speed and fees. The crypto player is in the middle of a major upgrade.

The idea of the upgrade is to carry out transactions more quickly -- and that will reduce congestion and costs users pay to complete operations on the network. Part of this involves a switch from the proof-of-work validation process to proof-of-stake. This puts validation power in the hands of those who have the biggest stake in Ethereum. And it eliminates the need to use tons of computer power to validate. This means an extra advantage is a greener platform.

Ethereum expects to switch over to proof-of-stake in the third or fourth quarter of this year. Then, it aims to introduce sharding next year. These chains relieve congestion on the main network. The result of the complete upgrade? Ethereum will go from today's average of about 15 transactions per second to more than 100,000.

As I mentioned above, coin supply won't hold Ethereum back from gains. Circulating coins total about 120 million. That's compared to 549 trillion for Shiba Inu. Ethereum -- unlike Shiba Inu -- has room to grow in value without reaching an impossibly high market capitalization.       

2. Cardano

One of Ethereum's co-founders went on to launch Cardano (CRYPTO: ADA). So, we can count on a lot of the same quality in this younger player. What makes Cardano special? First, it already uses proof-of-stake to validate transactions. So, it's already pretty fast. It can handle 250 transactions per second. And software engineers are working on a scaling solution that could greatly increase speed. 

Another positive is the way work on Cardano is unfolding. The blockchain only launches an update or something new after a peer review process. Of course, this slows down progress. But the big plus here is it avoids technical problems down the road. Once work on Cardano is complete, the system may be more reliable than other blockchains that have moved more quickly.

Right now, software engineers are working on the final two stages of Cardano development. The roadmap includes a total of five stages. The goal is to create a completely self-sustaining, decentralized system. Last fall, Cardano's smart contract functionality launched. Right now, more than 2,600 smart contract scripts in the Plutus language exist on the network, according to Adapools.org.

Like Ethereum, Cardano's growth isn't limited by token supply. Cardano's tokens in circulation total about 33.7 billion. So, Cardano could increase by five, for example, and still maintain a reasonable market value. All of this means investors in Cardano today have the opportunity to get in early -- and watch the blockchain grow. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Adria Cimino has positions in Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

 

More on International Stock News

A woman is excited as she reads the latest rumour on her phone.
Broker Notes

Goldman Sachs says this US stock is replacing Tesla in the Magnificent Seven

And no, it's not a tech company. It's in the healthcare sector.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Should I buy Nvidia stock as an Australian investor?

Many Aussies are thinking of jumping on the bandwagon, but they need to think about these issues first.

Read more »

Digital rocket on a laptop.
Broker Notes

Is the Nvidia share price on course to reach US$1,400?

You betcha, says one analyst.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Could Nvidia become the most valuable stock on earth?

Can anything stop the Nvidia stock price?

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
International Stock News

What can ASX investors learn from Warren Buffett's latest buys and sells?

We've just found out what Buffett's been buying and selling recently.

Read more »

electric vehicle such as Tesla being charged at charging station
International Stock News

Why Tesla stock tanked in January

Will the electric vehicle leader see earnings decline once again in 2024?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
International Stock News

Will Nvidia stock be worth more than Microsoft by 2030?

The graphics giant has been growing at a much faster pace than Microsoft, but can it sustain that momentum?

Read more »

Man with hands in the middle of two items with money bags on them.
International Stock News

Stock-split watch: Is Tesla next?

Stock splits are fun. But how much substance there is in Tesla splitting its stock is debatable.

Read more »