Price prediction is the riskiest business out there - and this article may well be the riskiest thing I've ever written. But this seems like such an obvious one to me, I'm a bit surprised others haven't put this out there before. Perhaps everyone's just quietly filling the bags with Avalanche before it explodes?
Everyone wishes they'd been there in 2009 when Bitcoin cost next to nothing.
Back then, BTC was dispensed for free in WWW faucets. It sounds a bit crazy now, but back then you could actually browse to random sites and request Bitcoin. In a matter of seconds you'd get some BTC for free.
You don't have to be a genius to have become rich from the early days of Bitcoin. Its valuation has been so astronomical, all you had to do was get some BTC off a faucet and simply hold on to it until 2017 or so. Better yet if you could HODL to present day, as we hit renewed all time highs in 2020.
At the very minimum those free coins you got in the year 2009 could've become a nice house in 2020.
Easier said than done, of course. Many people sold their Bitcoin once they'd grown 10 to 100x in value. Which was a pretty good investment anyway.
So, back to 2021(ish) and all the money seems to be flowing towards Bitcoin again. Then, a casual tweet which scrolled by my timeline caught my attention recently:
Of course, as a seasoned crypto trader, I rarely fall for this kind of hype. But something about that tweet made me go back and look at AVAX price.
I was surprised to find out AVAX is currently ranking 70 or so on the CoinMarketCap top 100.
That's clearly wrong.
Knowing what I know about Avalanche (been reading about it for approximately a year now), it feels like I'm right back in 2009. It's the same excitement I felt when I first learned how Bitcoin worked.
Avalanche is different and I think investors aren't quite aware of it yet.
The secret to the success of investors like Warren Buffett, Charlie Munger and other value investors is to find distortions in the markets.
Stocks that are way undervalued, with good growth potential. Compounded over the years, those ugly duckling stocks can go on to become golden egg geese.
Looking at the AVAX price, the first thing that came to mind is we've got an obvious market distortion - if I've ever seen one. If someone like Warren Buffett had begun investing right now and he were a crypto investor, AVAX would be such an obvious buy.
These aren't empty claims. To see what I mean all you have to do is use Avalanche.
Have you tried moving some AVAX around?
Have you read about the Avalanche protocol?
Have you seen how easy it is to do cross-chain transactions in Avalanche?
If you've answered yes to any of these questions, then you know how amazing Avalanche is.
It's plain simply the fastest and most technologically advanced cryptocurrency protocol I've ever developed. And I've probably tried most of them since 2013 when I first tried crypto.
I didn't have the chance to get Bitcoin in 2009, but suddenly I feel like I've found the Bitcoin of 2020.
The way Avalanche works is by leveraging unstable equilibrium. It's quite different from Bitcoin and other Nakamoto consensus cryptocurrencies where the consensus is hard. In Avalanche, the consensus is made unstable on purpose.
Sounds kinda wacky at first, but it's actually a brilliant idea.
It's what makes it so unique. Also why it's still misunderstood by most crypto investors who still haven't flocked to it in large numbers.
The decision as to whether an Avalanche transaction is valid or not reminds me of Iron Maiden's "The Evil that Men Do" lyrics:
Living on a razor's edge.
Balancing on a ledge.
Living on a razor's edge on...
Balancing on a ledge on...
Avalanche consensus is like a large sphere balancing on top of a hill. It could roll to either side with just a bit of impulse.
To make things clearer, here's a high level view of how Avalanche works.
A node finds out about a transaction. This happens via a P2P protocol, much like Bitcoin and every other major cryptocurrency out there.
The node then queries everyone it's connected to about this new transaction. The Avalanche node software asks everyone the same question: "Is this TX legit?". As the peers reply, the node software adds up the valid versus invalid replies and makes up its mind. One single vote difference makes a TX valid! It's that volatile! Also why it's so fast and so efficient.
Nodes don't know which other nodes have been asked, so if they lie about the TX, the querying node could find out it's been lied to because most other nodes replied differently. The liar is then cut off from future communication.
The gossip is absolutely random, so nodes can't premeditate lying to a specific fellow node. As the network learns about the dishonest nodes, they begin to be ignored.
This system is so efficient, you don't even need too many honest nodes to make it work. The networks learns to work with dishonest hosts very quickly.
As a result, Avalanche arrives at finality within milliseconds, whereas Bitcoin takes 10 minutes on average to get a first confirmation. Which takes us back to my first question: have you tried moving some AVAX around? You'll be amazed at the speed with which it happens. It almost looks fake, like the transaction only happened locally, but then you check an Avalanche explorer and it's there and it's confirmed.
Everyone's looking for cross-chain solutions.
We can all agree that exchanging Bitcoin for AVAX or Ethereum should be easier. Centralized exchanges should not be a thing any more - crypto is really lacking in that respect.
What's holding actual DEX's from taking over? You guessed it : lack of cross-chain solutions. You can trade any Ethereum-based tokens on ERC20 DEXes and DeFi platforms, but not any asset that runs on different blockchains. For instance, you can't trade Bitcoin for an Ethereum token on existing DeFi platforms.
We urgently need a solution to cross-chain transactions.
Avalanche allows you to plug in any blockchain into the system! The 3 initial chains on Avalanche are simply plugins. Ava Labs developed these 3 in order to get the project started. So, initially, we have the X chain for AVAX, the P chain for platform operations such as staking and governance and the C chain for contracts. The latter is an Ethereum compatible chain, implemented via a plugin written in the Go language - like Ethereum itself.
Assets can be trivially moved between the X, C and P chains! It's cross-chain paradise!
You can plug any cryptocurrency into Avalanche and it'll run using the millisecond-fast protocol. If someone creates a Bitcoin plugin for the Avalanche Virtual Machine interface, then Bitcoin begins to run on top of Avalanche. You could then transfer Bitcoin to the other chains just as easily
If all this sounds amazing, it's because it IS... Avalanche is the most amazing cryptocurrency platform out there right now.
For all these qualities, Avalanche is definitely a 4G crypto platform.
It's too far ahead of the 3rd generation features found in competing platforms to be considered just "3.5G".
Avalanche is here to set the standard for 4th generation cryptocurrencies, as it includes everything found in 3rd generation cryptos plus native cross-chain transactions and infinite extensibility.
Avalanche is able to accommodate any development made in other platforms. By simply adding a plugin to the AVM, you can implement new cryptocurrencies using the Avalanche protocol.
At the time of this writing, the most amazing cryptocurrency platform out there is still ranked 70 on CoinMarketCap. By simply looking at the offerings right above it, you can see how this is an obvious market distortion. The value in Avalanche is worth 10 to 20x than current prices.
Avalanche is the easiest market guess I've ever made. It's an obvious one!
AVAX is definitely top 10 market cap material which, at the time of this writing, would mean an instant 20x gain.
I'd go a bit farther and predict that AVAX can be the #1 crypto in just a few years, that's not such an obvious prediction.
Predicting AVAX in the top 10 is a slam dunk IMO.
At today's prices, the #10 crypto market cap would mean a 20x gain for Avalanche. It'll be there soon IMO. Mark this article and get back to me in a few years! (Or months, perhaps, if crypto traders are as smart as I think they are.)
Three weeks after this article was posted, Avalanche AVAX has gained 300%.
That's a 3x.
6x more to go.