They have plenty of momentum — and elements that help them stand out from the crowd. Key Points
- The first player aims to launch an update that will significantly lift transaction speed.
- The second crypto on the list is a winner when it comes to interoperability.
- The third is known for its security and decentralization.
Last year, Shiba Inu transitioned from just another token built on Ethereum to one of the most recognized names in the cryptocurrency industry. Its strong supporter base rallied behind it — and Shiba Inu finished the year with a gain of more than 45,000,000%.
But I don’t think these good times will keep on rolling for Shiba Inu. With limited real-world utility, performance this year also may be limited. And investors will be on the lookout for the next batch of cryptocurrency winners. Here are three explosive cryptocurrencies that may make their list — and beat Shiba Inu this year.
Image source: Getty Images.
Cardano (CRYPTO:ADA) soared 673% last year, but that may be just the beginning for this young cryptocurrency for two reasons. First, Cardano is being built out with a focus on quality. It’s set out a roadmap of five development stages.
Right now, it’s working simultaneously on the last two stages. The goal is a completely decentralized, self-sustaining system. And to further promote quality, every update or change to Cardano is peer reviewed before being applied.
Here’s the second reason Cardano may climb: Since the cryptocurrency isn’t yet complete, many catalysts lie ahead. Just this week, Cardano is reaching a milestone. SundaeSwap — the first decentralized-finance exchange built on Cardano — launches today.
But one of the biggest catalysts to watch is the launch of the Hydra scaling system. That may happen as soon as the end of the year and will offer a major boost to transaction speed — a key element for any blockchain. Instead of processing 250 transactions per second, Cardano may process as many as 1 million, thanks to Hydra.
Avalanche offers two major elements that help it stand out from other blockchains. One is that it already operates at higher speeds than other major blockchains like Ethereum or Polkadot, for example. Avalanche processes 4,500 transactions per second and completes each one in less than two seconds.
Another element that should help Avalanche stand out is its interoperability. Developers can write decentralized applications (dApps) in Solidity — the programing language used on Ethereum — and launch them on Avalanche. Users also can transfer assets back and forth between Ethereum and Avalanche using a bridge.
These points are important because, with thousands of crypto players out there, those that work together have a better chance of attracting more and more users — and therefore, investors, as well.
Like Cardano and Avalanche, Algorand (CRYPTO:ALGO) has strengths when it comes to transaction speed. The blockchain is on its way to processing 3,000 transactions per second with instant transaction completion. And it’s working on a system that will allow it to eventually process more than 45,000 per second.
Beyond speed, Algorand also offers a network model with a focus on security. To validate transactions, it uses pure proof of stake.
Many blockchains use proof of stake — this means validation power goes to those with a certain level of holdings. But in Algorand’s method, stakeholders are chosen randomly, regardless of the size of their holdings, which leads to greater decentralization and less risk that the biggest holders will dominate the system.
Algorand also is a forkless blockchain, which means the network can’t split into a new version. This could be particularly attractive for the creation and management of non-fungible tokens (NFTs) because when a fork occurs, there’s the possibility an NFT can be duplicated or lose its value.
Algorand already climbed more than 400% last year. But if its speed and security attract more and more users, this cryptocurrency could easily beat Shiba Inu in 2022 and beyond.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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