Ethereum (ETH -2.61%) is the world's second-biggest cryptocurrency and hosts thousands of decentralized applications (dApps). But it has one big problem, and that's transaction speed. This represents an opportunity for up-and-coming crypto rivals. One particular character has benefited in recent times. I'm talking about Fantom (FTM -2.07%).
Fantom's compatibility with Ethereum and its speed have attracted developers and investors. Today, Fantom is the world's 29th biggest cryptocurrency by market value. And it's climbed more than 19,500% since its launch in December of 2019. This crypto player has slipped in recent weeks, however, with the rest of the crypto market. But can Fantom gain ground and even become a multibagger?
Not just a single blockchain
First of all, a little background. Fantom is more of a blockchain network than just a single blockchain. Each new project results in a new blockchain, and it connects to Fantom's mainnet. Fantom stands out from rivals because of its compatibility with Ethereum. For instance, developers can write and deploy smart contracts written in Solidity (the language of Ethereum) on Fantom. This makes Fantom an easy and practical choice for developers. What also sets it apart is Lachesis, its consensus mechanism. This is the key to Fantom's speed, low cost, and security.
Like many other players, Fantom uses proof-of-stake to validate transactions. But Lachesis' process cuts down on the number of consensus messages. And that results in higher speed. While most blockchains emphasize their transactions per second, Fantom prefers the measure of time to finality: the time it takes to complete a transaction. And here, Fantom is a clear winner with transactions complete in just one second.
In recent times, users and developers have taken notice of Fantom's advantages. It is processing close to the same number of transactions per day as bigger rival Ethereum. And the blockchain even processed more on at least one recent occasion, according to data from Fantomscan and Etherscan.
Fantom recently became the world's third-biggest blockchain by total value locked. This refers to the assets held in a particular protocol. That figure totaled more than $12 billion as of late January. And last year, developers on Fantom increased fourfold to about 90, according to a developers report by Electric Capital, an early-stage venture capital firm focused on cryptocurrencies and fintech..
The coin supply
So, can all of this translate into a multibagger for investors? Let's look at it from a coin-supply perspective first. The circulating supply right now is 2.5 billion. If, for example, Fantom quadrupled from today's price, the result would be a market value of $21 billion. That would make Fantom the ninth-biggest cryptocurrency by market cap. That's entirely possible.
Now, let's look at the question from a use and investment standpoint. Here, too, Fantom has what it takes to multiply in value. As I talked about above, the network stands out from rivals and has made progress in attracting users and investors.
Of course, there are no guarantees in the cryptocurrency world. Competition is high. The industry is new. And as a result, risk is high. So never invest more than what you can afford to lose. But if you are looking for potential multibaggers, Fantom is one to add to your watch list.