Looking for the next Bitcoin? 2 cryptocurrencies to buy now

About 10 years ago, Bitcoin (BTC 4.24%) had a total market value of just $111 million. There have been many ups and downs since then, but the general trend continued to point upwards. These days, the oldest cryptocurrency is worth about $392 billions — with a B. If you had invested just $1,000 in Bitcoin a decade ago, it would be worth a life-changing $3.5 million today.

Bitcoin is a respectable investment vehicle in 2022, gaining the attention of institutional investors with deep pockets. But the days of thousand-fold returns in just a few years are unlikely to return for the most mature name in the crypto sector. So it’s only natural to look around for the next crypto name that can make you rich in a hurry.

I must note that extreme returns always come with larger than life risks. Truly gigantic returns on your investment can only come from small, unproven and relatively unknown cryptocurrencies. That group also contains many names that will reach for the stars, but will only reach the treetops at best. Most cryptocurrencies at this level will only see negative returns in the long run.

But that’s the name of the game. A handful of big winners can make up for a lot of forgotten also-rans, and you’ll never find the good bets unless you’re out there looking for them.

So let me show you a couple of cryptocurrencies that could make you a lot of money over the next decade if all goes well. Just remember that their downside risk is equal, and you should keep your speculative bets fairly small. These are not names you should bet your farm, tractor and all your chickens on. A couple of eggs will last, relatively speaking.

Filecoin: Store data in the blockchain

Let’s say you want to store some data in the cloud, but don’t want to rely on one of the classic cloud data giants. Your files must be strongly encrypted and unreadable even by the data host. You should be able to access the ultra-secure data very quickly. The storage service shouldn’t cost much either, and you want to be sure that the data can’t fall through the internet, lost forever to something as simple as a clumsy keystroke.

You will find that Filecoin (FILE 3.58%) ticks all these boxes. Filecoin is a distributed blockchain network that allows users to store digital data in a global peer-to-peer chain. Storage providers provide the physical storage space for your valuable data and compete for your business by charging low fees on an open market platform. The financial incentives, in the form of Filecoin tokens, also ensure that every storage provider will fight to keep your data safe and accessible. The storage fees are automatically refunded to the client if a file is lost or damaged.

It’s all about money, and the Filecoin token is the lifeblood of this innovative storage service. The network can run financial services, digital media platforms and private file storage tools. In one of the most popular use cases so far, digital content creators rely on Filecoin to store the actual media represented by non-fungible tokens (NFT).

This idea holds a ton of promise. Filecoin can grow into a massive service provider in the blockchain-based world of Web3. The crypto’s current market cap is just $1.8 billion today. If it turns out that Filecoin can support a trillion-dollar industry in the long run, it will multiply early investments by 500 times or more.

I can’t promise that the storage network and its Filecoin token will skyrocket, but I’m not entirely sure either will not. Holding your breath until that vision becomes a reality is probably bad for your health. Still, Filecoin looks like a good place to put a handful of money you won’t need for the next decade or so.

Zcash: A privacy-oriented version of Bitcoin

The privacy-enhanced Bitcoin clone known as Zcash (ZEC 4.35%) can also create large waves over time.

This crypto offers many of the same features as Bitcoin and is built on the same basic code. However, this version of “digital gold” comes with some additional features that should arguably make Zcash more valuable than the basic Bitcoin currency.

This cryptocurrency supports multiple transaction types.

• So-called transparent transactions display the sender and receiver addresses and is very similar to sending or receiving Bitcoin.
• Screened Zcash addresses hide the identity and account addresses of everyone involved and are valuable when you need complete confidentiality.
• Hybrid-type Zcash transactions leave some identifying details hidden and others displayed and come in handy when you need to audit a sensitive cash flow.

Many authorities do not like the fully shielded Zcash transactions, arguing that criminals can make money while hiding behind the encrypted data stream. Therefore, popular cryptocurrency exchanges like Coin base and Robinhood Markets allows you to buy and sell Zcash tokens today, but they only support transparent transactions. This quirk essentially removes this cryptocurrency’s most important differentiating quality, limiting the long-term value of the Zcash system as a whole.

This crypto may actually outgrow Bitcoin one day, but only if lawmakers around the world accept the existence of truly anonymous digital payments or Zcash finds a way around the privacy issue. And that may very well never happen. However, it is far too early to give up on that dream.

Imagine a world where consumers and businesses are free to make truly anonymous payments with Zcash, in the same way as using an unmarked gold bar or a massive bag of kroner. In that scenario, this billion-dollar cryptocurrency could eventually be worth several trillion dollars. Again, it may take a while if it happens at all. Remember what I said about making small investments in these highly speculative names and you’ll be fine either way.