Only a few altcoins have been able to outperform Bitcoin’s performance as we move through 2023, dominating the cryptocurrency landscape.
The question that naturally follows is: why are these specific coins experiencing significant growth while the majority of the altcoin market is grappling with financial turbulence? The key lies in their alignment with potent crypto narratives that have captured the zeitgeist of the moment.
The dawn of 2023 has brought with it a wave of crypto trends, ranging from artificial intelligence (AI) and liquid staking to perpetual decentralized exchanges (DEXs) and meme coins.
However, our attention now turns to the most promising future crypto sectors that harbor the potential to deliver substantial returns once the altcoin season takes off and can change crypto assets.
Let’s explore the top four sectors and their associated tokens, revealing the complexities and opportunities they present.
1. Layer 2 (L2)
One of the categories of crypto projects that have been growing the fastest and generating the most interest in recent months is Layer 2 solutions for Ethereum.
Layer 2 solutions are necessary for Ethereum’s network, which has slow speeds and high transaction fees, to increase speed and affordability without sacrificing its inherent security features.
The market is already home to numerous Layer 2 solutions, with new ones continually emerging. Interestingly, some of the most popular solutions, such as zkSync and Starknet, do not yet have their own tokens, providing early users with the opportunity to potentially receive airdrops and acquire crypto assets at no cost.
However, the proliferation of Layer 2 projects suggests that they will compete for market capitalization, possibly leading to modest price growth for all involved. Moreover, accurately forecasting the most successful projects and pinpointing those destined to stumble remains a formidable challenge.
Ultimately, with the extensive growth of the Ethereum network, the adoption of Layer 2 solutions becomes a critical necessity to enable effective scaling of the Ethereum blockchain.
Keep an eye on these notable Layer 2 projects: Polygon ($MATIC), Arbitrum ($ARB), Optimism ($OP), Immutable X ($IMX), Loopring ($LRC), as well as zkSync and Starknet.
2. Decentralized Storage
Decentralized file storage is a vital component for the success of Web 3.0, as decentralized applications (dApps) built on layer 1 and layer 2 protocols need ample space to store their data.
While blockchains are inherently designed for decentralized storage, their ability to store large files is limited. Blockchains excel at handling transaction data, smart contracts, and source code, but when it comes to accommodating the vast amount of data on the internet, which exceeds 60 trillion gigabytes, alternative solutions are necessary.
Currently, centralized cloud storage providers control the storage of this vast data, effectively monopolizing ownership. This centralized approach not only compromises security but also introduces a single point of failure.
Decentralized storage, in contrast, spreads data across networks owned by users globally, incentivizing their participation to ensure decentralization, availability, and security. As a result, the responsibility of hosting data shifts from a single authoritative entity to a collective of individuals.
Decentralized storage introduces enhanced security measures, reducing the likelihood of breaches while granting users full control and ownership over their data.
Given the rising popularity of blockchain applications and the progressive shift toward Web 3.0, the demand for decentralized storage will continue to rise. As a result, this sector holds significant potential to thrive during the upcoming bull rally.
Keep a close watch on these decentralized storage projects: Internet Computer ($ICP), Filecoin ($FIL), BitTorrent ($BTT), Arweave ($AR), Siacoin ($SC), and Storj ($STORJ).
3. Gaming / Metaverse / Play-to-Earn
Play-To-Earn Metaverse-style projects are a very interesting crypto sector because they are best placed to lead to the mainstream adoption of cryptocurrencies.
Most people use cryptocurrencies to make profits from speculation which makes the crypto population very limited. But with hundreds of millions of people playing video and mobile games at least occasionally, Web 3 gaming platforms could present their gateway to the world of crypto.
This is particularly true given the significant advantages that Web 3 gaming offers compared to traditional gaming models.
Traditional Web 2 games prioritize profits for the corporate entities behind them, lacking an open economy and giving players no influence over the games’ future development. Entertainment remains the sole motivation for players.
Modern games incorporate social elements, where individuals use these platforms not only for gameplay but also as a means of interaction.
Blockchain-based games transform the gaming landscape by allowing players to actively participate in voting for future developments through decentralized autonomous organizations (DAOs). Additionally, players can create, own, and trade digital assets while earning the game’s native tokens during play and subsequently converting their earnings into real-world currency.
However, to successfully usher millions of individuals into the world of Web 3 gaming, a robust infrastructure becomes essential. This is where Layer 2 solutions and decentralized storage projects play a crucial role.
Pay close attention to these noteworthy gaming projects: The Sandbox ($SAND), Decentraland ($MANA), Gala ($GALA), SuperVerse ($SUPER), Vulcan Forged ($PYR), Render ($RNDR), Illuvium ($ILV), Ultra ($UOS), Highstreet ($HIGH), and Wilder World ($WILD).
4. Decentralized identity
Identity forms the cornerstone of nearly every aspect of our lives, whether it’s accessing online services, opening bank accounts, participating in voting processes, purchasing property, or securing employment. All these activities require the verification of one’s identity.
Traditional identity management systems depend on centralized intermediaries who issue, control and govern an individual’s identifiers. As a result, individuals lose control over their identity-related information, unable to determine who has access to it or the extent of access granted.
In contrast, decentralized identity systems built on public blockchains like Ethereum enable individuals to take ownership and control of their identity-related information, authorizing access without reliance on central authorities. But nevertheless, you can buy Ethereum with credit card.
At the heart of decentralized identity are decentralized identifiers and attestations, which provide tamper-proof, cryptographically verifiable claims issued by authorized entities.
Decentralized identity systems serve as crucial safeguards, preserving the privacy of personal information. For instance, when proving one’s age, a company requesting such information would not gain access to an individual’s date of birth or specific age; instead, it would only receive cryptographic proof of the person’s adulthood.
Decentralized identity systems enhance the security, efficiency, and privacy of personal data, finding applications in universal logins, know-your-customer (KYC) verifications, online voting, and beyond.
Keep these decentralized identity projects on your radar: Ontology ($ONT), Civic ($CVC), SelfKey ($KEY), Metadium ($META), VerusCoin ($VRSC), and KILT Protocol ($KILT).
In conclusion, emotions and hype have a big impact on cryptocurrency prices. To maximize your potential profits, it’s crucial to align yourself with the right narrative before the crowd catches on.
By closely monitoring developments within the aforementioned crypto sectors, you can gain a competitive edge, positioning yourself at the forefront when the altcoin season inevitably takes center stage.
