Best Coinbase Investments: Where To Start?

Coinbase is a cryptocurrency exchange that allows users to buy and sell a variety of cryptocurrencies. With thousands of coins to choose from, investing in the volatile world of cryptocurrencies is not for the faint-hearted. Here are some of the best investments on Coinbase:

- Bitcoin (BTC) - The original cryptocurrency and the most popular one, with a market cap of about $1.3 trillion.

- Ethereum (ETH) - The second-largest crypto by market cap, with a value of about $450 billion. Ethereum's blockchain is custom-made for smart contracts, decentralized finance tools, and the trading of non-fungible tokens (NFTs).

- Cardano (ADA) - A proof-of-stake blockchain and one of the largest to successfully run that protocol. Cardano has a market cap of over $16 billion.

- Solana (SOL) - A blockchain that facilitates the easy creation of decentralized applications (dApps). Solana is fast, has low fees, and is easily scalable. It has a market cap of around $76 billion.

- Polygon (MATIC) - A layer-2 blockchain that sits on top of the Ethereum network and processes transactions quickly. It has a market cap of about $7 billion.

- Binance Coin (BNB) - The native token of the Binance exchange, the world's largest cryptocurrency exchange. It has a market cap of $69.4 billion and has had a year-over-year return of 97%.

Bitcoin's value and market cap

Bitcoin is a decentralised, peer-to-peer digital currency, created in 2009 by Satoshi Nakamoto. It is the original cryptocurrency and runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers.

Bitcoin's market cap is currently at 1.177 trillion USD, up from 1.164 trillion USD yesterday and up from 572.26 billion USD one year ago. This is a change of 1.14% from yesterday and 105.6% from one year ago. Bitcoin's market cap surpassed the $1 trillion mark in 2021, after the Bitcoin price hit an all-time high of $64,863.10 on April 14, 2021.

Bitcoin's value has skyrocketed as it has become a household name. In May 2016, one bitcoin was worth about $500. As of August 6, 2024, a single bitcoin's price was around $55,175, which is a growth of 10,935%. As of August 16, 2024, the live Bitcoin price is $59,057.34 USD, with a 24-hour trading volume of $29,553,950,336 USD.

Bitcoin's total supply is limited to 21,000,000 coins. New coins are created through the process of "mining". Miners receive rewards for every block they successfully add to the blockchain. At the moment of Bitcoin's launch, the reward was 50 bitcoins per block, and this number gets halved with every 210,000 new blocks mined, which takes the network roughly four years. As of 2020, the block reward has been halved three times and comprises 6.25 bitcoins.

Bitcoin's value is based on its decentralised nature, its limited supply, and its widespread adoption. It has created a global community and given birth to an entirely new industry of enthusiasts who create, invest in, trade, and use Bitcoin and other cryptocurrencies in their everyday lives. The emergence of the first cryptocurrency has created a conceptual and technological basis that has inspired the development of thousands of competing projects.

Ethereum's unique technology

While I can't find specific information about the best investments on Coinbase, I can tell you about Ethereum's unique technology.

Ethereum is a decentralized blockchain with smart contract functionality. It is intended to be more than just a medium of exchange or a store of value; it is a decentralized computing network built on blockchain technology. Ethereum is described as:

> "a global, decentralized platform for money and new kinds of applications," with thousands of games and financial apps running on top of the Ethereum blockchain.

Ethereum's blockchain network is distributed in the sense that everyone participating holds an identical copy of the ledger, letting them see all past transactions. It is decentralized as it is not operated or managed by any centralized entity but by all of the distributed ledger holders.

The native token on Ethereum is Ether, which can be used to buy and sell goods and services like Bitcoin. However, what sets Ethereum apart is that users can build applications that "run" on the blockchain like software "runs" on a computer. These applications can store and transfer personal data or handle complex financial transactions.

Ethereum also allows users to create and exchange non-fungible tokens (NFTs), which are unique digital assets. It also facilitates decentralized finance (DeFi) applications, providing financial instruments that don't rely on intermediaries like banks. This allows users to borrow against or lend their cryptocurrency holdings for interest.

Ethereum 2.0, an upgrade to the network, has also reduced the crypto's carbon footprint by up to 99.9% by switching from a proof-of-work to a proof-of-stake consensus mechanism. This means that instead of mining, users can stake their Ether to participate in transaction verification.

Cardano's small network

Cardano is a blockchain platform that aims to provide the tools and technologies required to create positive global change. It is a proof-of-stake blockchain platform, which means it is more environmentally sustainable than proof-of-work protocols. Cardano is the first blockchain to implement the Ouroboros protocol, a peer-reviewed and verifiably secure blockchain protocol. This enables the network's decentralisation and allows it to scale sustainably to global requirements without compromising security.

Cardano is open-source and decentralised, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, ADA. ADA is the name of the native coin that powers the Cardano platform, named after English mathematician Ada Lovelace. ADA exists on the settlement layer of the Cardano platform, which keeps track of transactions. The second layer is the computation layer, which is designed to enable smart contracts and applications to run on the platform.

Cardano's development began in 2015, led by Ethereum co-founder Charles Hoskinson. It was first released to the public in 2017, becoming the largest cryptocurrency to use a proof-of-stake blockchain. In May 2021, Cardano reached a market cap of $77 billion, the fourth highest for a cryptocurrency at the time.

Cardano is controlled by three entities: the Cardano Foundation, IOHK, and Emurgo. The Cardano Foundation, based in Switzerland, aims to standardise and promote the ecosystem. IOHK is an engineering company responsible for building the Cardano blockchain. Emurgo is responsible for commercial applications.

Solana's low fees

Solana (SOL) is a highly functional, open-source project that leverages blockchain technology to provide decentralised finance (DeFi) solutions. It was officially launched in March 2020 by the Solana Foundation, headquartered in Geneva, Switzerland.

Solana's hybrid protocol, which combines proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms, allows for significantly decreased validation times for transaction and smart contract execution. This has made it attractive to institutional investors.

Polygon's layer-two solution

Polygon, formerly known as Matic Network, is a layer-2 aggregator for Ethereum that combines multiple layer-2 scaling approaches, including sidechains and other approaches like zk Rollups, Optimistic Rollups, and Plasma. Its core component is the Polygon SDK, a modular and flexible framework that supports building and connecting secured chains. Experiencing high demand for Polygon support from the Defi and NFT developers within the Ethereum community, The Graph Foundation decided to launch a hosted Graph service for Polygon's developer community.

Polygon's layer-2 aggregator aims to address Ethereum's transaction limitations and throughput problems, which have resulted in high transaction fees. By leveraging its multichain architecture, Polygon can include Layer 2 secured chains and standalone chains, providing developers with various scaling options for their projects. This enables developers to build smart contracts and dApps more effectively, as they no longer need to worry about scaling issues.

The Graph, a decentralised data marketplace, has expanded its support to Polygon by adding indexing and querying capabilities. This enables developers to build scalable decentralised applications on Polygon more easily. With Polygon's widespread adoption, featuring over 90 dApps, approximately 7 million transactions, and about 200,000 unique users, it has enabled high-quality user experiences for top dApps like Polymarket, Aavegotchi, Decentral Games, and Neon District.

The Graph's expansion to Layer 2 blockchains and its integration with Polygon demonstrate the growing importance of second-layer scaling solutions for Ethereum.

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