Solana is one of the prime platforms for developing decentralized finance (DeFI) and NFT launches, which are one of the most successful crypto investments currently. Could it take ETH's throne?
Ethereum is a marketplace technology that provides a means to send and receive cryptocurrency, access investments and financial services. It’s an innovative blockchain that’s programmable and provides the foundation for applications, games, and other services.
While ETH or Ethereum is one of the most prominent open-source blockchains globally, Solana is a quickly emerging option that may exceed Ethereum. ETH allowed investors to access financial contracts involving lending, borrowing, and earning interest on crypto investments while bypassing the banking system altogether.
Initially, Ethereum created a pathway to new processes and financial opportunities for cryptocurrencies. Since its beginning in 2015, ETH now faces competition with Solana, poised to provide many of the same services and applications with fewer drawbacks.
How Could Solana Compete with Ethereum?
Like Ethereum, Solana is an open-source blockchain platform that’s decentralized and facilitates transactions using SOL, the platform’s cryptocurrency. Both open-source platforms work with smart contracts and offer a solid reputation and value.
There are some indications that Solana may replace the popularity of ETH in the future due to some significant advancements and observations.
- Solana’s value continues to gain momentum and has risen quicker in value than Bitcoin over the past year. It’s over 13,000% higher in price than twelve months ago.
- It’s the current global leader in NFT (non-fungible tokens) transactions.
- In June 2021, SOL, Solana’s cryptocurrency, was listed on Coinbase.
- The platform records each transaction event accurately through the “proof-of-history” algorithm.
- Solana’s fees are lower and faster, on average than ETH.
While Ethereum established the decentralized financial system, new platforms have since emerged to improve fee structure, access to more services, including NFTs, and other successful launches.
Solana’s Competitive Advantage Vs Ethereum
One of the main features of Solana is how the platform handles chokepoints during the transaction processes. This situation typically occurs when the high volume of blockchain transactions slows the network.
While Bitcoin uses a Lightning Network to address this issue, Ethereum uses the addition of charges, known as gas fees, to resolve the chokepoint issue through the platform’s ETH 2.0 version.
Solana took a different approach to resolve this impact on networks by implementing a technology that instantly time-stamps up to 65,000 transactions each second, which is far beyond what any other platform has achieved. While other competitors require validators or miners for blockchain transactions, Solana resolves tens of thousands of actions within seconds.
Other platforms considered strong competitors for Ethereum, such as Polkadot (DOT) and Cardano (ADA), have similarly tackled the high costs of processing transactions and improving scalability.
The Growing Popularity in NFT and Gaming
Solana is one of the prime platforms for developing NFT launches, which are one of the most successful crypto investments currently. The founder of Solana, Loan Venkatapen, also founded and manages Blocklabs Capital Management, which has been instrumental in building on the platform for years.
While Solana was started in 2017, it wasn’t released until 2020, when it made a powerful impact on the cryptocurrency market with high-performing blockchain and solutions. Solana systematically improved on Ethereum’s gaps in service while focusing on NFTs. Solana is one of the first platforms to address the choke point issue, with secure and fast processing costs less than one cent per transaction.
Solana Plays Center Stage To NFTs and Crypto Gaming
Solana offers more than unique, unparalleled blockchain technology. The platform is one of the top choices for artists and performers worldwide, including festivals and event-themed art. Solana is the official blockchain of Lollapalooza and boasts a direct connection between artists and users in a decentralized blockchain.
NFTs are expected to grow in popularity as more up-and-coming creators, celebrities, and musicians mint and sell to digital investors. As Solana remains one of the top blockchains for NFTs, it’s also a popular platform to build crypto gaming systems, such as Star Atlas.
Since NFTs and gaming are among the hottest in the market, and numerous launches are standard on both Solana and Ethereum, there is a lot of growth expected in the near future in blockchain development.
Why Investors Would Choose Solana Over Ethereum
Ethereum is one of the most established blockchain platforms in decentralized finance, though Solana and other competitors have quickly made gains to challenge the platform’s steady success. Some technical advantages may influence buyers and sellers to use Solana as their primary blockchain, including the following:
- Solana is well marketed and revered as a solid blockchain for the future. The top crypto investor globally, Sam Bankman-Fried, highly approves of the platform and is considered one of the leading authorities in crypto investing.
- Solana offers lower fees, which is a stark contrast to the gas fees that Ethereum charges to maintain its transaction processing volume.
- The platform continues to build on innovative ideas, is highly scalable, and offers superior processing power that effectively keeps transactional costs down.
The Pros and Cons of Solana
What are the advantages of Solana, and why would it be the preferred platform for crypto investing? There are a few drawbacks worth noting when comparing this blockchain with its competitors:
Advantages of Solana:
- Fees are roughly one cent per transaction, considered nominal and affordable, especially for investors who buy and sell frequently.
- The platform is highly scalable and offers fast processing power.
- Solana is well known for its innovative approach to new and upcoming trends on the market, including NFTs.
- All transactions are time-stamped so that the history of actions is accurately recorded for future reference.
Drawbacks of Solana:
- There is lower ownership of the maximum supply, which amounts to about 33.9 in total
- The distribution and emissions schedule is considered unfavorable
- Solana offers the technological advantage that reduces chokepoint, but for now there are jiust over 1000 validators in total
Overall, Solana presents some significant advantages over Ethereum, though since it is a relatively new platform. Some blockchain users consider Solana’s platform to be more centralized, and the low volume of validators and ownership may convince some to remain with Ethereum or another competitor.
Fortunately, Solana continues to grow exponentially and works with smart contracts and significant growth in projects within months.
The Pros and Cons of Ethereum
Ethereum offers some clear advantages and drawbacks that are important to consider compared to Solana and other platforms.
Pros of Ethereum:
- The platform was established in 2015 and is considered a pioneer in blockchains that offers continuous improvements and developments.
- Ethereum offers a lot of space and wide adoption for various crypto investments and products, including NFTs, and DeFi (decentralized finance).
- It’s a highly secure platform that’s modular and versatile.
Drawbacks to Ethereum:
- The transactional costs are significantly higher in comparison to other blockchains, including Solana.
- Ethereum’s scalability is low, and transaction speed is also slower than other platforms.
While Ethereum offers a much more comprehensive platform than Solana, it’s slower and lacks the efficiency and cost-effective fees featured with Solana. Both platforms provide distinct advantages and drawbacks, which are all necessary features for investors to determine which attributes are preferred.
Is Solana Poised To Take Over Ethereum?
Solana is definitely a strong force in the crypto market, and there are many reasons to consider this platform as a prime successor to Ethereum. Although Solana quickly developed a faster, more efficient blockchain with lower fees, it’s a relatively smaller platform with lots of room to expand.
Ethereum remains a much larger platform than Solana, though it’s also slower and costlier. The platform will soon upgrade to Ethereum 2.0, offering faster processing and more competitive fees once this new version launches. As Ethereum is a pioneer in the crypto market, it’s considered to have a clear advantage in its experience in the industry and the potential to improve in the near future.
Will Solana take over Ethereum as a replacement in the world of crypto investing? At this stage, it’s difficult to predict for sure how far Solana will soar ahead of its competitors, including Ethereum. Since its launch in 2020, Solana has gained popularity due to its engagement in NFT launches and numerous projects, including crypto gaming.
Summary: The Future of Solana’s Success
While both blockchains offer unique advantages, with Solana offering technological benefits for users, it may be too early to ascertain if the platform will take over as the leading blockchain for crypto investing. Solana has made it clear that the brand is a platform moving forward quickly and ready to compete against all platforms in the market.
Overall, it’s worth paying close attention to Solana and how this innovative platform will grow and develop from month to month. It’s also important to consider other blockchains, such as Cordana and Polkadot, and how they plan to develop and advance over time.
While Ethereum is set to advance and improve over time, it would be wise to keep a close eye on Solana as a strong contender in the cryptocurrency market. It’s quickly become one of the most impressive blockchains for crypto investors and aims to continue improving into the future.
