Today we will talk about smartcoins, explain how they work and what are the main market alternatives for those looking to diversify investments with these assets.
What are smartcoins?
Smartcoins are crypto assets created on smart contract platforms or smart contracts, in Portuguese.
Smart contracts can have different uses. The most common use of smart contracts is for the creation of decentralized applications ( DApps ) aimed at actual financial services, such as insurance, loans, currency conversion, among others, all through cryptocurrencies.
With this, it was possible to advance Decentralized Finance, known by the acronym DeFi . DeFi can be understood as a new financial system that offers products and services in a decentralized manner, that is, independent of central regulatory units, such as banks and governments.
In addition to DeFi cryptocurrencies , smart contracts can also be used to create new digital assets , metaverses and Blockchain games .
By now, you’ve come across a lot of technical terms that can be difficult at first. But don’t worry, below, we’ll clarify what the main concepts needed to understand how smartcoins work:
How do smartcoins work?
To understand how smartcoins work, you need to know two very important concepts for the crypto market as a whole: Blockchain and smart contracts.
Find out what each of them means:
Blockchain (literally translated as “chain of blocks”) is the name given to the network that is the basis of Bitcoin and all cryptocurrencies. It functions as a large public ledger, where all transactions are recorded quickly and securely.
Over time, this technology advanced and allowed the decentralization of other things besides the exchange of values. As a result, other types of cryptoassets were created, linked to other decentralized services , and thus smartcoins emerged.
Today, Blockchain is used, for example, to digitally record real-world goods and services. With a digital representation, it is much easier to trade and invest in these assets around the world.
A smart contract , or smart contract, is a programming code within the Blockchain used to create applications with various utilities in the real and virtual world.
Smart contracts are transparent, automated and immutable. With this, several services can be created without the need for constant human intermediation and without the need to rely on institutions for inspection, which reduces costs to carry out practical services in our daily lives.
Generally, decentralized applications have their own economy and have a token that powers their entire ecosystem.
Often, these DApps also take advantage of the infrastructure that the Blockchain where the smart contracts are created offers, being necessary to use the smartcoin of that network to pay fees or interact with different functionalities.
Discover the main smartcoins on the market
Check now which are the main smartcoins in the crypto market:
Ethereum is the largest smart contract platform and the top choice of developers to build crypto projects. For this reason, the network is a protagonist in the decentralized finance sector and houses a large part of the DApps aimed at DeFi.
This Blockchain also supports the creation of countless tokens that take advantage of the infrastructure and security that Ethereum offers.
The use of the network for the development of tokens became popular mainly due to Ethereum’s ERC-20 standard , which made the creation of digital assets relatively easier and more practical, in addition to offering compatibility between them.
Binance Coin (BNB)
In addition to being one of the largest smartcoins, Binance Coin is also one of the most valued cryptocurrencies and ranks 4th in the market capitalization ranking.
BNB was created by the Binance exchange initially on the Ethereum network, to serve as a token that offered advantages to customers . But over time, BNB gained new features and went from being just a utility token to having its own Blockchain, Binance Smart Chain (BSC).
Currently, the BSC network is focused on offering a framework to develop smart contracts and Dapps.
Cardano is yet another Blockchain for smart contracts, which aims to integrate various financial services and facilitate cryptocurrency transactions for people and companies .
Cardano’s development is based on strong scientific research to continue to update its technology and offer financial solutions. This is the main differential of the project, which today ranks 8th among the main cryptos in terms of market capitalization.
Within Cardano, the ADA smartcoin is used for payments and for interacting with existing services and applications on the platform.
Solana is a Blockchain designed to offer greater scalability and facilitate the creation of smart contracts and DApps.
As Blockchains expanded, these networks began to face problems in terms of transaction speed and confirmation time. Precisely for this reason, Solana’s purpose is high performance, seeking to offer high transaction speed at low cost to improve Blockchain usability.
It was in this sense that the network stood out and its smartcoin SOL began to attract more attention in the market as one of the main competitors of Ethereum .
Avalanche is a smart contract network for developing DApps, just like Ethereum and Solana .
One of Avalanche’s differentials is its purpose to solve issues relevant to the current scenario of the crypto market, such as sustainability, interoperability and scalability .
Is it worth investing in smartcoins?
We always emphasize that knowing whether or not it is worth investing in a cryptocurrency is an answer that depends on personal reflection. This analysis needs to be done according to your investment profile .
Another essential step to have more security and chances of success are studies and research, so you will know exactly where you are putting your money.
When inserted within well-structured ecosystems and well-capitalized projects, there are more chances that a smartcoin will offer utility to people, finding demand and appreciation.
Soon, everything will depend on the fundamentals and reputation built by the Blockchain of smart contracts where that smartcoin was created.