Best Coinbase Investments: Where To Put Your Money

Coinbase is a cryptocurrency exchange that allows users to buy and sell a wide range of cryptocurrencies. With thousands of coins to choose from, investing in the volatile world of cryptocurrencies is not for the faint-hearted. Bitcoin and Ethereum are in a league of their own as the two best cryptocurrencies to buy. However, four more speculative cryptos are worth considering, each with its own unique characteristics.

Bitcoin is the original cryptocurrency and the most well-known, with a market cap of about $1.3 trillion, or roughly 53% of the overall market. It has the most mainstream acceptance of any cryptocurrency and is considered by many investors to be the only crypto worth investing in over the long term.

Ethereum is the second-largest cryptocurrency by market cap and is widely used. Its blockchain is custom-made for smart contracts, decentralized finance tools, Web3 applications, and non-fungible tokens (NFTs). It has gained over 300% since April 2016 and is up 65.1% as of June 3, 2024.

Other speculative cryptos worth considering include Cardano, which is a proof-of-stake blockchain that fosters a developer-friendly ecosystem for decentralized applications; Polkadot, which aims to create a completely decentralized internet; Solana, which is known for its low costs and high throughput, with an average transaction fee of $0.00025; and Polygon, a layer-2 blockchain that sits on top of the Ethereum network, processing transactions quickly and offering governance features to its users.

Bitcoin's value and market cap

Bitcoin is the original cryptocurrency, created in 2009 by Satoshi Nakamoto. It runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers. As of August 6, 2024, a single bitcoin's price was around $55,175, skyrocketing from about $500 in May 2016. This represents a growth of 10,935%.

Bitcoin's market cap has also been increasing. As of August 13, 2024, Bitcoin's market cap was at 1.177 trillion USD, up from 1.164 trillion USD the day before, and up from 572.26 billion USD a year ago. This is a change of 1.14% from the previous day and 105.6% from the previous year. Bitcoin's market cap is currently at $1.2 trillion, representing a Bitcoin dominance of about 55%.

Ethereum's unique technology

Ethereum is a unique blockchain platform with a range of features that set it apart from other cryptocurrencies.

Firstly, Ethereum is a decentralized computing network built on blockchain technology. It is a peer-to-peer network that allows for the secure execution and verification of application code, known as smart contracts. These smart contracts are a key feature of Ethereum, allowing participants to transact without a central authority. The transactions are sent and received by user-created Ethereum accounts, and the records are immutable, verifiable, and securely distributed across the network, giving users full ownership and visibility.

Secondly, Ethereum is a popular platform for developers. It offers a flexible environment to build decentralized applications using the Solidity scripting language and the Ethereum Virtual Machine. The maturity of the protocol and its rich ecosystem of developer tools make it an attractive platform for building decentralized applications. Ethereum's large user base further encourages developers to deploy their applications on the network, creating a positive feedback loop.

Thirdly, Ethereum has a wide range of functions beyond being a digital currency. It can process other financial transactions, execute smart contracts, and store data for third-party applications. The network can be used to create and run applications, smart contracts, and other transactions, making it more than just a medium of exchange or a store of value.

Lastly, Ethereum has a large, existing network that has been tested over years of operation. It has a committed global community and the largest ecosystem in blockchain and cryptocurrency, giving it a strong foundation for further growth and development.

In summary, Ethereum's unique technology includes its decentralized peer-to-peer network, its flexible platform for building decentralized applications, its wide range of functions, and its large, established community. These features make it a popular and attractive platform for developers and users alike.

Cardano's small network

Cardano is a public blockchain platform that is open-source and decentralized. It is unique in that it is the first blockchain platform to be built on peer-reviewed research and developed through evidence-based methods. It was created by Ethereum co-founder Charles Hoskinson and is overseen by the Cardano Foundation, an engineering company, and Emurgo, which is responsible for its commercial applications.

Cardano uses a proof-of-stake (PoS) protocol named Ouroboros, which is a greener alternative to proof-of-work protocols as it uses far less energy. Ouroboros is the first peer-reviewed, verifiably secure blockchain protocol, and Cardano is the first blockchain to implement it. This enables the network's decentralization and allows it to sustainably scale to global requirements without compromising security.

Cardano's native cryptocurrency is called ADA, 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. ADA can be stored on a digital wallet, with Cardano's native wallet being named "Daedalus".

Cardano's development phases, or "eras", are named after notable figures in poetry and computer science: Byron, Shelley, Goguen, Basho, and Voltaire. The first three stages implemented a basic blockchain, then implemented decentralisation and smart contracts. The Basho era focuses on scaling the blockchain, and the final Voltaire era adds voting and treasury management functionality.

Cardano has a range of applications, including a partnership with the government of Ethiopia to use Cardano in its coffee supply chain and create an identity and record-keeping system for school pupils. It has also been used to verify the authenticity of basketball shoes and release an album by electronic dance music DJ Paul Oakenfold.

Cardano is a relatively small network compared to other cryptocurrencies, with a market cap of $11.6 billion as of August 6, 2024. Its ADA token has had modest growth compared to other major crypto coins, with a price of $0.02 in 2017 and $0.32 as of August 6, 2024, an increase of 1,520%.

Solana's low fees

When it comes to investing in cryptocurrencies, there are thousands of options, from well-known names like Bitcoin and Ethereum to less familiar altcoins. One of the key considerations for investors is the transaction fees charged by each coin.

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, with its headquarters in Geneva, Switzerland.

One of the key advantages of Solana is its low transaction fees. This is due to its innovative hybrid consensus model, which combines proof-of-history (PoH) and proof-of-stake (PoS) mechanisms. The PoH component is responsible for most transaction processing, while PoS validates each block sequence. This combination is unique in the blockchain industry and allows for greater scalability and faster processing times.

Solana's transaction fees are significantly lower than those of its primary competitor, Ethereum. In September 2021, Ethereum's average transaction fee was between $3 and $10, and these fees can fluctuate dramatically depending on network volume. In contrast, Solana offers an incredibly low transaction fee of just $0.00025 per transaction. This price makes Solana one of the blockchains with the cheapest transaction fees.

The low fees on Solana are due to its better block time and block size. Solana has a block time of 0.4 seconds and can handle 20,000 transactions per block, while Ethereum has a block time of 13 seconds and can only handle 70 transactions per block. This means that the Solana network can process a much higher volume of transactions, resulting in lower fees for users.

The low transaction costs on Solana are designed to ensure accessibility for all users, from small-time traders to large institutions. This has contributed to Solana's popularity and helped it attract a dedicated user base.

In summary, Solana's low fees are a result of its innovative hybrid consensus model, efficient block processing, and unique fee structure. These factors combine to make Solana one of the most cost-effective blockchains for users looking to invest in cryptocurrency.

Polygon's layer-two solution

Polygon, formerly known as Matic Network, is a layer-two aggregator for Ethereum that combines multiple layer-two scaling approaches, including sidechains, rollups, and other approaches like Plasma, Optimistic Rollups, and zkRollups. Its core component is the Polygon SDK, a modular and flexible framework that supports building and connecting secured chains and standalone chains.

The Polygon SDK enables the creation of standalone chains like Polkadot's Substrate and Ethereum-secured chains. This multi-chain functionality is designed to speed up transactions and solve Ethereum's throughput problem. The Polygon network has seen widespread adoption, with over 90 dApps, approximately 7 million transactions, and around 200,000 unique users.

The Graph, a decentralised data marketplace, has expanded its support to include Polygon, bringing indexed open data to the platform. This expansion will make it easier for developers to build dApps on Polygon and will also help to address Ethereum's high transaction fees.

With Polygon's layer-two solution, developers can now build and publish open APIs called subgraphs that applications can query using GraphQL. This allows for the efficient indexing and categorisation of data, making it easily searchable and accessible for users.

In conclusion, Polygon's layer-two solution offers a range of benefits, including improved transaction speed, enhanced security, and easier development of decentralised applications. By addressing Ethereum's limitations, Polygon provides a more scalable and user-friendly environment for blockchain projects and their communities.

Frequently asked questions