Polygon (MATIC): Should You Invest in This New Crypto? – GOBankingRates

Originally known as the Matic Network, Polygon was created to scale Ethereum and improve the infrastructure. It is an India-based currency aiming to make transactions cheaper and quicker on the Ethereum blockchain.

Think of Polygon crypto as an express train. It is on the same track as all other trains but moves faster and makes fewer stops along the way. In this example, the track is Ethereum, where Polygon does a quicker job of fulfilling transactions than other currencies.

The platform uses a POS or proof-of-stake consensus to secure the network and create a new currency. As for Coinbase, Polygon has a market cap of $9.1 billion, and there are 6.7 billion MATIC in circulating supply.

Does that mean Polygon crypto is a safe investment? In this guide, you will learn the basics of Polygon, how it works and whether you should invest in it or not.

Anyone who has ever traded on the Ethereum blockchain would be familiar with the high transaction fees and slow fulfillment times on the network. Polygon solves these problems through the development of a decentralized platform that facilitates low-cost transactions.

The system uses point-of-stake checkpoints. Thus, one MATIC sidechain can reach up to 16 transactions per block. In the future, this could allow millions of transactions on the blockchain.

The network describes itself as a Layer 2 scaling solution. Its unique transaction fulfillment technology allows up to $65,536 transactions on each block. Meanwhile, Polygons side chains have been designed to support decentralized finance protocols of the Ethereum ecosystem.

Currently, Polygon only supports Ethereum as the base chain but plans on extending its support to other base chains, according to the community consensus and suggestions.

The developers release the token every month. The maximum supply of Polygon tokens is 10,000,000,000.

16% of the tokens are team tokens; advisors hold 4%, 12% are network tokens and 23.33% are in the ecosystem. The remaining 21.86% are foundation tokens.

As of Oct. 8, 2021, the Polygon crypto price is $1.36, according to CoinMarketCap.

It has a market cap of $9,145,297,989, with the 24-hour volume being $1,283,200,888.

Since it has several uses, Polygon has become popular among investors. But if you are a beginner or do not know much about Polygon, it is vital to be familiar with crypto before investing in it.

Here are some things you must know about Polygon.

In the future, Polygon wants to offer a framework for blockchain networks that would allow users to create interconnecting blockchain networks.

If this comes to pass, developers will have a lot of liberty for network creation. They will be able to develop standalone, flexible and scalable blockchains.

Considering Polygons ambitious plans, it is likely that the currency will be on the rise in the future too.

Many developers use the user-friendly Ethereum Virtual Machine to build decentralized apps.

With its EVM compatibility, Polygon makes it easier for developers to create decentralized apps and port them. Developers have deployed many Ethereum apps onto Polygon, including SushiSwap and Aave.

Before you invest in Polygon crypto, it is essential to determine if it could face any roadblocks in the future. The primary concern for Polygon is the presence of other blockchain network projects, like Avalanche and Polkadot.

These projects may start coexisting in the coming years, leaving no room for Polygon to be hyped up. Moreover, Ethereum is making efforts to upgrade its platform to Etherium 2.0. When this happens in reality, it will lower Polygons popularity.

Polygon experienced an incredible 13,000% increase in price in May. In January, one Polygon token was under $0.02, but the price increased to $2.68 by May.

However, this higher price did not last for long. Polygon crypto price fell to $0.90 when the crypto market drew back somewhat. Take this as an example of the markets volatility and how careful you need to be when investing.

Regardless of the cryptocurrency you want to invest in, it is imperative to note that these currencies are volatile investments. You should be comfortable with a dramatic swing in price without going into panic mode.

As for Polygon, some might consider it a safe investment while others do not. For instance, Mark Cuban, the crypto enthusiast billionaire, invested in Polygon.

Another plus point for Polygon is that more than 350 apps are running on its network. As the network runs many decentralized apps, it will remain relevant for a long time to come.

However, the downside of Polygon crypto is its attachment to Ethereum. Due to this, the network is not only competing with other currencies but also with Ethereum itself, which it also depends on.

Polygon developers argue with this, saying their network will remain relevant even if Ethereum 2.0 is released, since Polygon offers speedier transactions and allows Ethereums communication with other networks.

Plus, another programmable blockchain might take Ethereums spot in the future, sending Polygon down with it.

You can buy Polygon from a number of cryptocurrency exchanges, including:

Polygon is just as volatile as you would expect any other cryptocurrency to be. It might have bigger plans for the future, but there is no way to ensure that other blockchain networks or Ethereum itself would not cause a decline in the cryptos popularity and worth.

If you want to invest in it, make sure you follow the golden rule of investment by not putting in more than you can afford to lose.

Our in-house research team and on-site financial experts work together to create content thats accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates processes and standards in our editorial policy.

Scott Jeffries is a seasoned technology professional based in Florida. He writes on the topics of business, technology, digital marketing and personal finance.After earning his bachelors in Management Information Systems with a minor in Business, Scott spent 15 years working in technology. He's helped startups to Fortune 100 companies bring software products to life. When he's not writing or building software, Scott can be found reading or spending time outside with his kids.

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Polygon (MATIC): Should You Invest in This New Crypto? - GOBankingRates