Public blockchains have opened the door for anyone with an internet connection to create and access digital markets. While the global financial system is at a turning point to become more innovative, efficient, and democratized than ever before, most legacy blockchains like Ethereum were not built to scale.
Enter Solana, a decentralized blockchain built to enable scalable, user-friendly apps for the world. The aim of Solana, and part of its hype, is that it enables developers to scale faster and cheaper, and hopefully one day unlocking the true potential of the crypto industry.
According to the coin’s site, Solana is the fastest blockchain in the world and the fastest growing ecosystem in crypto, with over 400 projects spanning DeFi, NFTs, Web3 and more. It reached an eye-popping $78 billion valuation in October, and is currently trading at $56 billion since the latest dip.
At an average cost of $0.00025 per transaction, Solana is an incredibly affordable alternative to Ethereum. In fact, many analysts and experts refer to Solana as the Ethereum Killer.
Officially launching in March 2020, its founder, Anatoly Yakovenko, designed Solana to support smart contracts and the creation of decentralized applications, or dapps.
The blockchain operates on both a proof of history (PoH) and proof of stake (PoS) model. PoS allows validators to verify transactions according to how many coins they hold, while PoH allows for those transactions to be timestamped and verified more quickly, Yakovenko wrote in the Solana white paper.
Solana has risen to highs of $258 from merely $1.5 at the beginning of the year. The digital token would have turned an investment of $1,000 into $175,000 in a little more than 10 months.
Ethereum and Solana are often compared for a few reasons. One is that both have smart contract capabilities. Smart contracts, or collections of code that carry out a set of instructions on the blockchain, are crucial in running decentralized finance, or DeFi, applications and nonfungible tokens, or NFTs.
Although Ethereum is older and more prominent, Solana is proving to be a viable competitor because of its speed and capacity to scale, which in turn produces lower transaction fees.
“Solana has a solid ecosystem that is quickly becoming more attractive to businesses and developers,” says Jose Soto, Head of Digital Products at Troika IO. “There have been some great NFT drops on the blockchain that have gained decent traction.”
“The insanely fast transaction times and low fees place Solana heads and shoulders above Ethereum, but it comes at a cost. Solana is slightly more centralized, but SOL doesn’t have to wait for the traditional ‘block times’ to occur since each transaction is optimistically approved, but rolled-back in the case of invalidation,” Soto continues.
Yet, Ethereum has its own advantages. There are far more ETH users, and more applications and stability already exist thanks in part to massive first-mover adoption.
For developers, “Solana has a higher learning curve, yet it’s young enough that streamlined tools are being improved pretty quickly,” says Soto.
According to a CNBC report, ETH believers say the blockchain will become more scalable, secure and sustainable after its Eth2 upgrade, slated for 2022, during which the network will shift to a PoS model as well. They also argue that Solana has a long way to go before it reaches the same level of quality and prominence that Ethereum commands.
Solana is currently trading at $182 since another holiday sell-off, opening the day at $196, and opening December at $230.
To deposit SOL into your Redeeem wallet and cash them in for gift cards or NFTs, click here. There are no fees to deposit into your wallet, but there is a 0.5% fee to swap to other cryptocurrencies like Bitcoin.