Introduction
Blockchain is a distributed digital ledger that holds any type of data. A blockchain can track bitcoin transactions, NFT ownership, and DeFi smart contracts.
While any traditional database may hold this type of data, blockchain is different in that it is completely decentralized. Many identical copies of a blockchain database are held on various computers spread out throughout a network, rather than being maintained in one spot by a centralized administrator — think of an Excel spreadsheet or a bank database. Individual computers are known as nodes.
How Does Blockchain Work?
The name blockchain isn’t by chance: A “chain” of separate “blocks” of data is often used to characterize the digital ledger. A new “block” is formed and attached to the “chain” as new data is periodically uploaded to the network. This requires that all nodes update their blockchain ledgers to be identical.
Why blockchain is considered highly safe is due to how these new blocks are formed. Before a new block can be added to the ledger, a majority of nodes must check and certify the legitimacy of the new data. They might include ensuring that new transactions in a block are not fraudulent, or that currencies have not been spent more than once in a cryptocurrency. An isolated database or spreadsheet, on the other hand, allows one individual to make changes without oversight.
Top 10 Blockchains to Look Forward in 2022
1. Bitcoin
Bitcoin is a cryptocurrency, or virtual currency, that is supposed to operate as money and a form of payment while being independent of any single person, group, or entity, eliminating the need for third-party involvement in financial transactions. It is given to blockchain miners in exchange for their efforts in verifying transactions and can be bought on numerous platforms. Satoshi Nakamoto, an unidentified developer or group of developers, first announced Bitcoin to the world in 2009. It has since become the world’s most well-known cryptocurrency. Many other cryptocurrencies have sprung up as a result of its popularity.
2. Ethereum
Ethereum is a decentralized blockchain technology that creates a peer-to-peer network to securely execute and verify smart contract code. Participants can transact with one another without relying on a central authority. Participants have full ownership and visibility over transaction data since transaction records are immutable, verifiable, and securely distributed across the network. User-created Ethereum accounts are where transactions are transmitted and received. To complete transactions on the Ethereum network, a sender must sign transactions and spend Ether, the native coin of Ethereum.
3. Tether
Tether is a type of cryptocurrency known as a stablecoin. Unlike other cryptocurrencies, which are known to be volatile, these are digital currencies that are tethered to real-world assets — the US dollar, for example — to preserve a steady value. Bitcoin, for example, hit an all-time high of about $65,000 in April before virtually halving in value since then. Tether is frequently used by cryptocurrency traders as a substitute for the US dollar when purchasing cryptocurrencies. This essentially allows them to seek safety in a more stable asset during periods of high crypto market volatility.
4. BNB
Binance Coin (BNB) is a cryptocurrency that can be used to make purchases and pay fees on the Binance cryptocurrency exchange. The Binance Exchange was the world’s largest cryptocurrency exchange as of January 2018, processing over 1.4 million transactions per second. Binance Coin users receive a discount on transaction fees on the Binance Exchange as an incentive. BNB can also be traded or exchanged for other cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others. Binance Coin was first launched in July 2017 and operated on the Ethereum blockchain with the ERC-20 token before becoming the native currency of Binance’s own blockchain, the Binance Chain.
5. USD Coin
USD Coin (USDC) is a new stablecoin that is tied to the US dollar. It was introduced on September 26, 2018, by Circle and Coinbase in partnership. USDC is a USD-backed cryptocurrency that competes with Tether (USDT) and TrueUSD (TUSD). USD Coin is a service that tokenizes US dollars and allows them to be used on the internet and on public blockchains. Furthermore, USDC tokens can be converted to USD at any time. The ERC-20 smart contract ensures the issuing and redemption of USDC coins. Putting US dollars on the blockchain allows them to be sent anywhere in the world in minutes and gives cryptocurrencies much-needed stability. It also opens up new trading, lending, risk-hedging, and other possibilities.
6. Solana
Solana is an open source project that develops a new layer-1 blockchain that is permissionless and high-speed.
Solana was founded in 2017 by Anatoly Yakovenko, a former Qualcomm executive, with the goal of scaling throughput beyond that of popular blockchains while keeping prices low. Solana uses a novel hybrid consensus model that combines a one-of-a-kind proof-of-history (PoH) algorithm with a lightning-fast synchronization engine that is a variant of proof-of-stake (PoS). As a result, the Solana network may theoretically perform more than 710,000 transactions per second (TPS) without the need for any scaling solutions.
7. XRP
The corporation received 80 billion tokens and the co-founders received 20 billion. The goal of XRP was to act as a bridge between two currencies or networks. In September 2013, OpenCoin became Ripple Labs.
Ripple bills itself as a worldwide payments network, with major banks and financial institutions among its clients. XRP is employed in its products to allow for rapid currency conversions.
8. Cardano
You’ve probably heard of Bitcoin, Ethereum, and Cardano if you’ve dabbled in cryptocurrency investing. So, what is Cardano and how does it differ from other cryptocurrencies? Cardano (ADA) has become one of the cryptocurrency industry’s fastest-growing blockchain assets. It distinguishes itself from other blockchains by rapidly developing the technology it employs. Cardano wants to build a platform for developing decentralized applications (DApps). Smart contracts can be built on the Cardano blockchain, resulting in decentralized apps and protocols.
9. Terra Luna
Terra is a blockchain that allows users to produce fiat-pegged stablecoins. The network’s seigniorage mechanism is largely used by these coins. Do Kwon and Daniel Shin of Terraform Labs established the network in 2018, and it leverages Tendermint Delegated-Proof-of-Stake (DPoS) as its consensus method. Terra allows you to create a variety of different stablecoin types using smart contracts. The project has a big user base in South Korea and has proven popular in Asian e-commerce marketplaces. Taxi riders in Mongolia, for example, can pay select drivers with Terra MNT, a stablecoin tied to the Mongolian tugrik. Terra currencies are tokens created on the platform that exist alongside the network’s original LUNA token for governance and utility.
10. Avalanche
Avalanche is a blockchain that, through its Avalanche Consensus Protocol, promises to combine scalability capabilities with fast confirmation times. It has a 4,500 TPS capability (transactions per second). This is 14 TPS in Ethereum. Avalanche launched in September 2020 and has since grown to become one of the most popular blockchains. According to data from Defi Llama, it has a total value of over $11 billion in its protocol, making it the fourth-largest DeFi-supporting blockchain after Terra and Binance Smart Chain. Some Ethereum protocols, such as Aave lending and SushiSwap decentralized trading, are included in Avalanche’s burgeoning DeFi ecosystem.
Conclusion
Cryptocurrencies soared in popularity last year, and industry analysts predict that trend will continue. Investors are eager to learn about the very volatile cryptocurrency market to make a profit in the future. Let us wait to watch the performance of these top 10 blockchains in 2022.
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