For more than a century, the stock market has been the undisputed leading wealth creator. While it may not surpass the returns of gold, housing, or bonds every year, it’s delivered the highest average annual return of these investment vehicles over the very long run.
But over the past decade, cryptocurrencies have stormed the investing scene and become a formidable challenger to stocks. In fact, some of the most widely followed digital currencies have produced five-and-six-digit percentage returns. This includes the “people’s currency,” Dogecoin (CRYPTO:DOGE), which galloped higher by 27,000% in a six-month stretch between early November 2020 and early May 2021.
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I know I’m not going to win any points for originality here, but that’s not my intent, anyway. Ethereum (CRYPTO:ETH), the second-largest cryptocurrency by market cap, is arguably the most exciting digital currency.
The big selling point for Ethereum has long been its use of smart contracts. These are protocols that verify, facilitate, and enforce the negotiation of a contract. For instance, if two parties agree that a certain action should be executed when conditions are met, smart contracts can handle that. This might mean executing the wishes of a will many years down the line when a grandchild reaches a certain age, or perhaps reordering supplies for a business once a certain percentage of an item has sold.
For the time being, Ethereum is getting a lot of buzz due to its role in decentralized finance, or DeFi. DeFi aims to use smart contracts on a financially focused blockchain to bypass the financial intermediates that have the potential to slow transactions down or deny them entirely. But it’s Ethereum’s nonfinancial applications, and how it could streamline supply chains, that has me excited.
Notably, the Enterprise Ethereum Alliance has more than 100 members, each of which is focused on promoting the use of the Ethereum network. While some of these EEA members are banks — note that I’m not discounting the role Ethereum’s Ether token could play in the future — it’s far more telling that a large number of these businesses are in the tech sector or focused on logistics. This includes FedEx, Microsoft, SAP, and Advanced Micro Devices, to name a few.
Having the blockchain network with the greatest chance of real-world adoption makes Ethereum the no-brainer digital currency to monitor.