It is a well-known fact that cryptocurrencies have passed a rough patch, and the total value of the market so far in 2022 has decreased by 13% to $ 1.9 trillion. That said, crypto has a long-standing track record of rebounding. Also, some assets may perform better than others.
Let’s find out the reason Solana (SOL 3.20% ). When Ethereum (ETH -0.38% ). It fits the bill and can make a top pick for long distance investors.
Solana, often referred to as the “Etherium Killer” because of its extraordinary speed, is the ninth largest cryptocurrency with a market capitalization of $ 31 billion. The network can maintain its long-term advantage with its exciting expansion into fintech and financial services.
According to data from coinbase.com, Solana can handle 50,000 transactions per second compared to Ethereum 15. This makes it ideal for decentralized application (dApp) development. These are complex self-executed programs that dramatically increase the workload of the blockchain and benefit from Solana’s high capacity.
So far, Solana hosts about 500 dApps. This is far from rival Ethereum’s 3,000. However, Solana seems ready to grow steadily thanks to its technological capabilities. And it’s not just limited to dApps.
In February, platform developer Solana Labs announced Solana Pay, a payment system designed to help merchants accept cryptocurrency payments directly from customers (including Solana’s native token SOL). did. Solana’s FinTech expansion highlights the potential of real-world utilities, which is great news for long-term investors.
Don’t underestimate the power of a strong brand. Ethereum’s sustainability derives from its pioneering advantages as a platform for dApp development and will provide this functionality in 2015. Planned upgrades also help keep the platform relevant in the increasingly competitive blockchain industry.
As mentioned earlier, Ethereum is being challenged by new rivals like Solana in its technical specifications. This is due to the tedious Proof of Work (PoW) consensus mechanism, where miners solve puzzles and validate transactions. To remedy these shortcomings, Ethereum plans to implement what is called a consensus layer upgrade to move to a proof of stake (PoS) system where miners use existing coins to validate transactions. doing.
It is unknown when the Ethereum upgrade will be available. However, such changes are not unprecedented, as the platform has a proven track record of implementing improvements.
Meanwhile, Ethereum continues to attract most of the dApp development, with about 3,000 of the approximately 4,000 projects included in the project. And this means that its shortcomings don’t scare users. Ethereum’s reputation as an established and reliable blockchain is key to its long-term success.
There is room for multiple similar blockchains
Solana and Ethereum are competing as platforms for dApp development, but cryptocurrencies are not zero-sum games. History shows that many similar assets can benefit as the overall opportunity expands.
For example, Ethereum improved Bitcoin but did not kill it. Similarly, Solana does not necessarily kill Ethereum, despite its technical advantages. Both assets appear ready for long-term success with a strong brand and an active development team.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Advisory Service. We are miscellaneous! Asking investment papers, even our own, helps us all think critically about investment and make decisions that help us to be smarter, happier, and richer. increase.