Cryptocurrencies suffered another brutal weekend with bitcoin (BTC-USD) approaching $30,000 and ethereum (ETH-USD) sliding under $2,000 after China toughened its stance on crypto payments. But Coinbase customers now have access to an ethereum competitor called Polkadot (DOT1-USD), which is gaining the attention of Wall Street.
At a recent Yahoo Finance Plus webinar, Capital2Markets President Keith Bliss compared the two developer networks, which are designed to decentralized finance. “Polkadot is an ethereum competitor and a lot of programmers are now using that blockchain to build applications off of, because they consider it a little bit safer. It appears to have plugged in some of the pinholes that you see in the ethereum blockchain that some programmers and engineers have cited as problems going forward,” he said.
Both platforms use smart contracts, but polkadot goes a step further, allowing developers to build their own blockchains that can connect to each other. Ethereum 2.0 is expected to add similar functionality when it goes live later this year or in 2021.
Polkadot does face headwinds though, not the least of which are crashing crypto prices, which are souring institutional interest and attracting regulatory scrutiny. Last Wednesday, the U.S. Securities and Exchange Commission delayed one of the many pending bitcoin ETFs before the agency. There’s also no guarantee that polkadot will be widely adopted.
Bliss urges crypto investors to do their own research and make sure the underlying business or concept is bona fide. “[G]iven all the coins that are out there, it’s easy to do some research and find the ones that have real businesses underpinning them in their movement, like Polkadot … [T]hen you could make the investment accordingly if you don’t want to have the volatile ride across the entire complex.”
Jared Blikre is an anchor and reporter focused on the markets on Yahoo Finance Live. Follow him @SPYJared
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