We took a look at top ecosystems, teams, technology, and staking to find the best altcoins of 2021.
Our #1 Pick for best Altcoin of 2021, was labeled an ‘Ethereum Killer’ back in 2017.
Three years later, this Altcoin showed us all why it got that name…
Polkadot is the one project that actually lives up to its hype, which is why it we chose it as one of the Top Alt Coins of 2021.
Polkadot already has a big ecosystem for a 3 year old project, which has recently shown explosive growth recently.
The reason for this growth:
Polkadot has a GREAT Team to carry out its mission, while possessing the Technology to back it up.
Remember the coin Ethereum?
Polkadot has one of the brightest and most talented team members from Ethereum, helping make Polkadot what it is today, and what it will become in the future.
Polkadot already possesses the technology of ETH 2.0, currently has a stronger staking system than Ethereum 1, is already built to be scalable, and has a massive ecosystem that is still growing. It was an easy pick for our #1 spot, Best Altcoins in 2021.
What Makes Polkadot so Great?
- Growing Ecosystem -
A growing ecosystem on a blockchain is a positive sign to investors, as it demonstrates the publics confidence in the project itself, showing a willingness to invest their own projects and businesses on that particular blockchain.
We researched many projects, and Polkadot / Substrates name came up again and again. The amount of activity on this blockchain is impressive, and hopefully will continue.
Here is a look at some of the projects on the Polkadot Blockchain.
What Drives a Growing Ecosystem?
Some of the above projects ended up on our list of Top Alt Coins of 2021:
That is how important a growing ecosystem is to be considered a top altcoin of 2021.
A growing ecosystem, by definition means having enough success to become larger, or for other companies to have enough confidence to invest. Polkadot’s success has created an unintentional positive feedback loop, that may benefit the blockchain even more in the long run.
Many new Initial Coin Offerings (ICO) are getting hype solely because they’re built on the Polkadot Network. Some ICOs getting attention from Polkadot’s popularity are Polkastarter and Polkaswap. These are two of the most anticipated ICOs that are coming out in the next few months.
Since the Polkadot Network is one of the fastest growing and most popular, we decided to look within it. During our search for Top Altcoins of 2021, we borrowed a strategy from Warren Buffet:
Invest in overweight (successful) assets in the best performing sectors and industries.
Well we just learned that Polkadot was one of the best performing ecosystems. In terms of Altcoins, Polkadot demonstrates the most use cases outside of Ethereum, which is why we picked it to be one of the top alt coins of 2021.
To understand how important an Ecosystem is for a project, we have to look at Ethereum. Ethereum was the most popular Altcoin over the last 4 to 6 years. The project created an ecosystem so big and popular, that other projects started failing if they did not actually connect to Ethereum in some way or another.
Meaning, if they did not feed off of the traffic to Ethereum, they were doomed.
Why did Polkadot Become so Popular Lately?
- Team & Technology -
Almost all Cryptocurrency projects that fail, failed because of marketing, or technology – responsibilities of The Team. The Team is a crucial factor to look at when picking a project that will be successful in the future. After all, it is up to them if the project succeeds or not.
So let’s take a look at the Polkadot Team:
You can’t read about Polkadot or Substrate without the name ‘Gavin Wood’ popping up. In fact, if you read about Ethereum, his name is bound to come up also.
Why is that?
Gavin Wood has an impressive resume:
In addition to founding Polkadot and creating Substrate, he also founded Ethereum with Vitalik Buterin.
Yes, the founder of Polkadot and one of the founders of Ethereum are the same person.
Gavin was a vital team member of Ethereum. He created the programming language for Ethereum called ‘Solidity’, which is still the most downloaded developer tool in the Microsoft Store by a long shot.
What About the Technology?
When we look at technology, we are really just looking at the survivability of a blockchain. When we gain insight into actual use cases, we can answer the questions:
What problems does this project solve, if any?
How valuable is the solution or proposal to the community, and how big of an impact will this project or proposal have on current technology and society?
How likely is it that this project will get enough support to reach the top 5?
Polkadots Impressive Technology
Multi parallelized transactions
Interactions with Parachains are processed in parallel, allowing for a highly scalable network.
Built with the best technology
Substrate, WASM, Libp2p, and developer languages like Rust, C++, and Golang.
The technology is seriously exciting, as it seems to have beaten Ethereum to the Layer 2 roll out, and had similar features to Ethereum. However, we chose to look past Ethereum this time, as the current projects have become interesting enough to start seriously dissecting them.
Another factor was Market Cap. We wanted to look at coins that would give us the highest possible gains, but also remain a smart decision. The Market Cap of Ethereum makes it harder to keep gaining as much as a smaller cap Alt coin would, which does affect our decision.
Since we were already looking at both, we took a look at their decentralization properties.
Which Coin is Better? Ethereum, Polkadot, or Cardano?
- Decentralization -
Ethereum has been one of the most popular cryptocurrencies for years, and is currently the 2nd largest Market Cap at the time of this writing at $67,196,203,329.
Ethereum is the most Decentralized Alt Coin on the Market. The way we measured this, is by counting how many validators the Alt Coins had, which were all taking their blockchains off central servers, and putting them on servers all over the world, decentralizing them.
Instead of a ‘central server’ where a company, or government could take your site or network down, Ethereum lives in decentralized universe, meaning there is no one central authority, or even server that the network lives on. If one server goes down, there are 25,000 ready to take its place. This is a network that can never be taken down completely, and is thus Decentralized.
The Role of a Validator: Consensus Through Staking
Each of the 25,000 Validators helps Ethereum gain ‘Consensus’, that their network of already circulating coins, and all the coins from the new blocks, are real and accounted for. This is called ‘Staking’.
Without some sort of central ledger system (used by banks, famous for having a ‘double spend’ inefficiency), Validators need to Stake their share to get consensus over the entire network.
Each Validator is expected to have high percentages of uptime, as the importance of not allowing even a single mistake is too great. One mistake, one miscount of the new block, and the entire Network can become uncountable, worthless, or corrupted.
Together these thousands of validators make up a consenus. The more Validators that vote on the new block, the more set in stone the new blocks become.
Validators are Important: How Does Polkadot Compare?
While Ethereum was building an empire out of its ecosystem and amassing validators, Polkadot decided to take a crucial step forward, and solve Ethereums Scalability issue.
Instead of a single shard sending asynchronous messages between shards, Polkadot allows the shards to be executed in parallel, and Polkadot can send cross-shard asynchronous messages
Polkadot is simply built to scale, and already on Layer 2. However, because it spent the majority of its time solving scalability, Polkadot now only has 250 Validators (about 1% of Ethereum). Ethereum 2.0 requires a large number of validators per shard to provide validity guarantees.
Polkadot is able to provide stronger guarantees with fewer validators per shard. Polkadot achieves this impressive feat by making validators distribute an erasure coding to all validators in the system, such that anyone – not only the shard’s validators – can reconstruct a parachain’s block and test its validity.
The random parachain-validator assignments and secondary checks performed by randomly selectedd validators make it impossible for the small set of validators on each parachain to collude.
Not only is Polkadots validators much stronger than Ethereums, Polkadot also plans to quadruple their validators, bringing the total up to 1,000! Read about their journey to 1000 validators below.