Why Investing in Better-Built Blockchains Could Pay Off
Decentralized finance, or DeFi, and non-fungible tokens, or NFTs, have seen massive growth in 2021. Both technologies need efficient blockchains to operate at a high speed and low cost to the user. The Ethereum (CRYPTO: ETH) network has struggled as rising demand makes it more expensive for users, spurring greater adoption of alternative networks such as Solana (CRYPTO: SOL) and Cardano (CRYPTO: ADA). Here's why keeping an eye on this trend might pay off for investors in the long run.
The Ethereum network is the industry standard for DeFi and NFTs – two of the largest growth markets in the blockchain industry this year. But being the largest and most popular network comes with a major drawback: Everyone wants to use it.
The cost to use the Ethereum network is determined by how many transactions pass through it, and how fast its miners can process them into new blocks on its chain. When user demand puts a strain on the network -- such as when a DeFi project launches a yield farming incentive, or when a new NFT collection is released -- these transaction costs can skyrocket.
Source Fool.com
