No cryptocurrency has been as sizzling hot this year as Shiba Inu (CRYPTO:SHIB). It came out of nowhere to become one of the most talked-about and heavily traded digital coins on the market.
There are always other cryptocurrencies that hold the potential to be the next big thing, though. Most of them never break out of the pack. But a few do. Here's an explosive cryptocurrency that just pushed Shiba Inu to the side.
Watch out for falling rocks
For much of this year, Avalanche (CRYPTO:AVAX) traded at a market cap of $5 billion or below. It was big enough to gain attention but not enough to rank as a top-tier cryptocurrency.
However, Avalanche began to pick up significant momentum in August 2021. It plateaued a couple of months later after vaulting past several other cryptocurrencies based on market cap. Some might have thought that Avalanche was out of steam. Instead, it was only taking a breather.
Avalanche again went on a big run starting in early November. The token received an especially big boost after Deloitte decided to build disaster relief software platforms on the Avalanche blockchain. Granted, Avalanche's gains weren't nearly as impressive as what Shiba Inu delivered in October. However, Avalanche steadily moved up the list of the world's most popular cryptocurrencies.
While Avalanche was soaring over the last few weeks, Shiba Inu was sinking. And last week, Avalanche moved past Shiba Inu to become the No. 11 cryptocurrency based on market cap with Shiba Inu falling into the No. 12 spot.
Why Avalanche is so attractive
Avalanche is the brainchild of Cornell University professor Emin Gün Sirer. He's a pioneer in cryptographic research. Gün Sirer even designed a virtual currency concept six years before the milestone Bitcoin (CRYPTO:BTC) whitepaper came out.
What really sets Avalanche apart from other cryptocurrencies is its architecture. Blockchains such as Ethereum (CRYPTO:ETH) face problems decentralizing at scale. This can result in high gas fees. However, Avalanche solves these problems by incorporating three distinct yet interoperable blockchains into its network.
Avalanche's Exchange Chain (X-Chain) is used to create and trade the platform's native AVAX tokens. The Contract Chain (C-Chain) enables developers to create decentralized applications using smart contracts. The Platform Chain (P-Chain) coordinates validators for verifying transactions and creates subnets (dynamic sets of validators).
Thanks to this architecture, Avalanche can process more than 4,500 transactions per second with low costs while remaining highly scalable. Perhaps most importantly, its time to finality (when a transaction has been irreversibly added to the blockchain) is less than two seconds -- much faster than other blockchains.
Unsurprisingly, developers have flocked to the platform. There are now more than 150 projects in the Avalanche ecosystem, including crypto wallets and non-fungible token (NFT) marketplaces.
Does Avalanche have staying power?
Like many other cryptocurrencies, Avalanche's price dropped on the recent news about the emergence of the coronavirus omicron variant. However, investors should expect significant volatility over the short term.
Does Avalanche have staying power over the longer term? It very well could. Sure, there are lots of other blockchains that are also vying to dethrone Ethereum. But Avalanche is gaining adoption and should be viewed as one of the top contenders.