What is Polygon?
CRYPTOCURRENCY Polygon has increased in value in recent days – and it's currently up by 30% over the past 24 hours.
We explain all you need to know about Polygon and how much it's worth.
But first, a word of warning: buying cryptocurrencies, like any investment, is a very risky business and making money is never guaranteed.
You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.
Cryptocurrencies are highly volatile, so the value of your investments can go down as well as up in the blink of an eye.
As always, never invest in something you don't understand.
What is Polygon?
Polygon (MATIC) is an Ethereum token that powers the Polygon Network.
This aims to provide faster and cheaper transactions on the Ethereum blockchain and to make the latter a multi-chain system.
Polygon, originally known as the Matic Network, launched in 2017.
It was founded by Jaynti Kanani, Sandeep Nailwal, Anurag Arjun and Mihailo Bjelic.
5 risks of crypto investments
BELOW we round up five risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told The Sun: "Polygon is a framework for building blockchain networks which are compatible with and potentially a rival to Ethereum."
Blockchain technology, which can seem very complicated, is a kind of database used to record transactions.
It's the technology at the heart of cryptocurrencies such as Bitcoin.
Charlie Barton, investment specialist at comparison site Finder, added: "Ethereum has limitations, seen most recently with gas fees and delayed transactions, and Polygon aims to tackle that."
How much is Polygon worth?
The value of Polygon is currently sitting at $2.13, down from its highest ever of $2.18 earlier today, according to CoinMarketCap.
At the time of writing, the price is up by 29.60% over 24 hours.
In comparison, the Polygon token was worth just $0.33 on April 23.
Polygon is said to have benefited after the Tesla founder Elon Musk announced the firm will stop accepting Bitcoin payments.
Mr Musk tweeted the news last week, citing the harmful effects to the environment that comes with mining the cryptocurrency.
So called proof-of-stake cryptocurrencies, such as Polygon, claims they don't need powerful supercomputers to "mine" them and their network.
Instead, network security is ensured by low-power computers that lock digital assets that will be lost if the operators misbehave.
How risky are cryptocurrencies?
Investing in cryptocurrencies is essentially gambling and there are no guarantees that you will see what you pay in go up in value.
Cryptocurrencies are VERY high risk and a speculative investment, with limited track records and no underlying value.
There is also no guarantee that you can convert crypto assests back into cash, as it may depend on the demand and supply in the existing market.
Cryptocurrency firms aren't regulated in the way that other financial firms are, meaning you won't have any protection if things go wrong.
Plus, newer cryptocurrencies are always riskier than those that have been around longer, such as Bitcoin, and make you more open to scams.
Ms Streeter said: "With new innovations and technologies being rapidly slotted into this world, with no regulation to speak of, investing in Polygon is a risky business.
"Traders should only dabble in cryptocurrencies and tokens with money they should be prepared to lose, given the highly volatile nature of the market."
While Mr Barton added: "The performance of Polygon has been extremely strong recently, achieving 10,000% growth in the last year.
"Even the latest downturn in cryptocurrency didn’t stop Polygon, achieving over 150% growth in the last two weeks.
"It’s easy to get carried away, but such aggressive growth is highly unlikely to continue forever."
Households are being warned they risk losing all of their money if they invest in cryptocurrencies.
Meanwhile, a Russian 27-year-old recently became the world's youngest crypto billionaire after his cryptocurrency Ethereum surged in value.
Who are Dogecoin's founders? We explain all you need to know.
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