Bitcoin grabbed investors' attention when it soared past $60,000 last year. That's quite an accomplishment for the world's first and biggest cryptocurrency. It's important to remember that Bitcoin was only worth about nine cents back in 2010.
Since, thousands of cryptocurrencies have entered the market. Some are mainly used as currency. Others have set their sights on leading in the space of decentralized applications (dApps). And some crypto players exist to support a virtual world they've created. Which could be the next Bitcoin? (And by this, I mean gaining over a period of years and establishing a reputation as a leading player.) Read on to find out.
Solana (SOL -7.00%) soared last year as developers and users flocked to the blockchain. Developers increased nearly fivefold during that time, according to an Electric Capital report. This is key because it shows the network is on its way to offering more and more applications. Solana is making a name for itself in the world of non-fungible tokens (NFTs). These are certificates of ownership used to collect art or sports souvenirs, for example. Solana is the second-biggest player by sales volume over the past 30 days, according to CryptoSlam.
Users like Solana because of its transaction speed. Right now, it's processing more than 2,500 transactions per second. That's compared to about 30 for market giant Ethereum. Solana's speed is thanks to its proof-of-history consensus mechanism. This involves marking blocks of data with timestamps. And this streamlines the verification of transactions.
Solana already climbed more than 11,000% last year. But if it can continue to grow in the area of dApps and NFTs -- and ensure network stability over the long term -- more gains could be ahead.
Blockchain networks face one particular problem. And that's achieving a high level of speed, security, and decentralization. Sometimes success in one results in lagging performance in one of the other two. Fantom (FTM -3.18%) addresses this problem. The blockchain's manner of validating transactions ensures speed. That's because its consensus mechanism is asynchronous. This allows validators to confirm blocks at various times.
At the same time, Fantom maintains decentralization and security. That's through a consensus protocol that lets anyone join or leave at any time -- and all validators are considered equal.
Users like Fantom's speed and the price of using the network. Transactions reach completion in one second and costs total less than one cent. Fantom transactions soared to a daily high of more than 1.8 million back in September. And on occasion, daily transactions have even surpassed those of Ethereum.
Today, more than 80 dApps exist on Fantom. That's still way behind leader Ethereum that boasts more than 2,000. But Fantom has what it takes to catch up.
Avalanche (AVAX -3.70%) is another blockchain known for speed. The network processes 4,500 transactions per second. And these transactions reach completion in less than two seconds. One reason for Avalanche's speed? Its structure. The blockchain is made up of three chains. The X chain is meant for the exchange of assets, the P chain coordinates validators, and the C chain is responsible for smart contracts. This streamlines operations and reduces congestion that could occur when everything happens on one main network.
Another big advantage of Avalanche is that it's compatible with Ethereum. This is important considering the prominence of Ethereum in the crypto world. So, for example, a developer can launch a dApp built in the language of Ethereum on Avalanche.
More than 170 projects exist on Avalanche right now -- from decentralized finance to games. But we can expect more and more in the future. Developers on the network tripled last year, according to Electric Capital. And with more projects available, use and investment in this dynamic network may soar.