When discussing the value of altcoins, or recently created cryptocurrencies, we often use Ethereum as a reference when comparing their value or potential. Since the price of Bitcoin has risen so much that it is no longer an element so easily comparable, and its use case as a store of value is now well established, it seems more logical to compare coins to Ethereum now. That is the case with the new digital currency Solana. Many analysts focus on it and compare it with Ethereum, the second most prominent cryptocurrency after Bitcoin.
Solana was created in 2020, which makes it a very young cryptocurrency. One of its attractions is its excellent scalability, allowing it to process many transactions at much better prices than Ethereum. This scalability was recently put to the test when a peak of 400,000 TPS created hard forks and eventually took down the network. It is hard to assess at this time the long-term impact, if any, of such an incident.
High speed and low fees are the most definite points attributed to this cryptocurrency and no wonder. This network can process 60,000 transactions per second, making it the most efficient cryptocurrency for daily payments. Recently, several cryptographic projects have abandoned the Ethereum network to join Solana. Multi-blockchain stablecoins, like Tether, have already been integrated into the Solana blockchain in search of more transactional efficiency.
Solana is also challenging Ethereum in the field of DeFi (Decentralized Finance), one of the markets that is gaining greater importance in this industry and which represents a key strategic positioning for major blockchains. Both projects are disputing the throne, major DeFi platforms are still on Ethereum or on Layer 2 solutions like Polygon.
Faced with this situation, Ethereum has not stood idly by. Its recent technological updates implemented via the London hard fork seek to increase its transactional speed and reduce gas fees to compete with contenders like Solana. With the Ethereum 2.0 update, they are looking to improve their scalability to compete better; however, the transition from Proof-of-Work to Proof-of-Stake is not an easy one.
Specifically, at the time of writing this article, the price of Solana is $162, while Ethereum is worth $3,636. Solana has $48 billion in market capitalization, while Ethereum stands at $427 billion. However, this is quite a feat for any new cryptocurrency to join the top 10 cryptos by market capitalization in such a short time.
Although Ethereum may seem far away it is now a target in sight for Solana’s community.vWith the support of a strong developers community and serious partners, like the ones supporting the Ignition hackathon, Solana has a serious shot at the coveted spot of the main smart contract platform currently held by Ethereum.
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