Solana could get bigger than Ethereum

Wednesday 19 January 2022 14:38 CET | News

Solana has several use cases for consumers, and it could become the Visa of digital assets, as Bank of America analyst Alkesh Shah observed in his research note on cryptocurrency.

According to Shah, Solana’s differentiation from Ethereum is making it successful and the valuation gap provides an opportunity for Solana. There are certain advantages of Solana that could clearly give it an edge over Ethereum and take away its market share in the future: utility for micropayments, gaming, and non-fungible tokens (NFTs). The blockchain of Solana is optimized for consumer use cases by prioritizing scalability, low transaction fees and ease of use.

Solana is a hybrid of Proof of History (PoH) and Proof of Stake (PoS) consensus mechanisms, where PoH helps improve the performance of its Proof of Stake consensus mechanism. This facilitates the highest transaction speed of 65,000 transactions per second with average transaction fees of USD 0.00025, while remaining relatively decentralized and secure.

Solana prioritizes scalability at the expense of being a less decentralized and secure blockchain while Ethereum blockchain prioritizes decentralization and security at the cost of scalability. The scalability problem of Ethereum has led to periods of network congestion and ultra-high transaction fees.

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Keywords: cryptocurrency, Ethereum, NFT, blockchain
Categories: DeFi & Crypto & Web3
Companies: Bank of America, Solana, Visa
Countries: World
This article is part of category

DeFi & Crypto & Web3

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