Both Ethereum and Solana should attract the attention of investors looking for cryptocurrencies with proven utility.
According to The Motley Fool Ascent’s 2024 Cryptocurrency Investor Trends Study, one of the main factors holding investors back from investing in cryptocurrencies is the apparent lack of practicality of many top cryptocurrencies. That’s what I’m doing. More than a third (35%) of respondents who do not own cryptocurrencies said they “don’t know what to do with cryptocurrencies.”
fair enough. It’s hard to see any practical use in dog-themed meme coins. Bitcoin (BTC -0.44%) is still primarily a long-term store of value that is purchased and held (but not used in daily life). But crypto investors, don’t despair. He has two high-quality cryptocurrencies that offer significant utility, and should definitely be on your radar if utility is your priority.
Ethereum
My top utility ciphers are Ethereum (Ethereum 0.34%). It offers a highly diversified blockchain ecosystem and a variety of ways to use cryptocurrencies on a daily basis. For example, you can use Ethereum to purchase non-fungible tokens (NFTs) minted on the Ethereum blockchain. You can use cryptocurrencies to participate in decentralized finance (DeFi) protocols to get additional yield from your investments. You can exchange Ethereum for another token using any of the decentralized exchanges running on the Ethereum blockchain. Alternatively, you can use cryptocurrencies to play blockchain and metaverse games built on Ethereum.
Image source: Getty Images.
You get the idea here — Ethereum is more than just a coin. It also acts like a digital admission ticket that gives you access to everything happening within the blockchain ecosystem. This is a big problem because Ethereum is still dominant in almost every important area of the blockchain world. For example, Ethereum still accounts for over half (56%) of all DeFi activity in the blockchain world and remains the undisputed leader when it comes to NFTs. So, this admission ticket is actually quite valuable.
Solana
my second choice is Solana (Sol -0.63%), very similar to Ethereum in terms of utility. Basically, anything you can do with Ethereum, you can do with Solana. Use Solana to buy NFTs minted on the Solana blockchain, play blockchain and metaverse games created on the Solana blockchain, and use decentralized exchanges running on Solana. and exchange them for other tokens.
However, Solana has a unique mobile encryption strategy. Unlike Ethereum, Solana has a cryptophone (Saga) that is optimized for use on the Solana blockchain. The device also provides access to mobile apps not found on traditional smartphones. And of course, these apps are powered by his Solana blockchain, creating even more leverage opportunities.
Comparison of public interest stocks and public interest virtual currencies
In some ways, these two utility cryptocurrencies are similar to utility stocks. Similar to companies providing basic services such as electricity, gas, and water, these two cryptocurrencies provide basic blockchain services to users and developers. Both are known as layer 1 blockchain networks and are the building blocks for creating new products and new services. If practicality is your priority, you should probably focus on layer 1 blockchains as a starting point.
However, public interest cryptocurrencies differ significantly from public interest stocks in one important respect: their explosive upside potential. This is something you can’t get from reliable, stable dividend-paying stocks that provide basic services. Solana’s value, for example, has soared more than 900% in the last year. And Ethereum is up over 95,000% since 2015.
Relationship between utility and evaluation
Imagine how much more valuable utility companies would be if they could capture a small portion of all economic activity based on basic services. For example, what if water companies could capture some of the economic value created by people using water in their homes? What if the utility company could capture a portion of the economic value created?
Well, that’s exactly what’s happening with utility crypto. For example, the price of Ethereum is directly related to the amount of economic activity taking place within the Ethereum blockchain ecosystem.
Consider the NFT market. As the size of the NFT market increases, the price of Ethereum will also increase. That said, in addition to providing the basic services (the blockchain architecture needed for creators to mint NFTs), Ethereum supports all the economic activity taking place on it (people internally Because it can also capture a portion of buying and selling digital assets. NFT Marketplace).
That is why, in general, the more useful a cryptocurrency is, the higher its valuation. The more things that can be done with cryptocurrencies, the bigger the blockchain ecosystem will become. And the bigger the entire blockchain ecosystem gets, the bigger the potential growth opportunities.
When choosing between different utility cryptos, take the time to analyze how much activity is actually occurring within these blockchain ecosystems. It could be the best way to identify the next big utility cryptocurrency poised to soar in value.
