Along with Cardano/ADA, Polkadot is another promising third-generation cryptocurrency to consider.
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Approximate Market Cap: $27 billion
Year Established: 2017
Cost Per Transaction: Nominal
2020 Return: 205%
Score: ★★★★
In December, Binance announced a $10 million fund to support projects on Polkadot, a new cryptocurrency. DOT’s price shot up 41% within a week. And more gains could be on the way.
Founded by Gavin Wood, the Chief Technology Officer of the Ethereum Project, its protocol improves on older blockchains. From a technological standpoint, Polkadot’s key difference is its use of parachains — multiple blockchains that can run in parallel. That solves a massive issue for Bitcoin, which has a single, growing blockchain that all miners (and transactors) need to store. Developers have also added scalability, smart contracts and security.
Still, investors need to remember that, in the world of cryptocurrencies, the best technologies aren’t always the winners — it will take strong marketing (and some luck) to get Polkadot to rival its larger competitors.