Solana (Sol 12.25%). It was a bright red growth story that increased 100 times between November 2020 and November 2021. Then, in a few months, it fell by more than 85% from a record high. Solana suffered two network outages in May and June, adding further downward pressure in connection with the downturn in cryptocurrencies and stock markets.
SOL, the native token of the Solana blockchain, is now under $ 40. This is why it’s time to buy Solana and why Solana could be a better buy. Ethereum (ETH 9.67%). For specific investors.
Difference between Solana and Ethereum
It can be difficult to distinguish between thousands of cryptos, not to mention the different types of crypto investments.But decentralized applications (dApps), Solana, Ethereum, and Cardano (ADA 7.19%). I’m in my own league. Known as Layer 1 blockchains, they provide a platform for building Layer 2 protocols and smart contracts (self-executing contracts when certain conditions are met).
Ethereum is more decentralized than Solana. It was conceived by Vitalik Buterin, then 19 years old, who wrote the Ethereum White Paper in 2013 before launching Ethereum in 2015. The Ethereum Foundation is a non-profit organization that supports Ethereum. However, there is no commercial company that calls shots.
In comparison, Solana was launched in 2017 by California-based for-profit company Solana Labs. Solana is more centralized and can run faster than Ethereum. The upgrade will take less time. And there is more accountability for outages. Transaction fees are very low and transaction times are very fast. However, Solana is less secure because it is more centralized than Ethereum.
Benefits of Solana
Most large projects are built on Ethereum. But Solana has opened up his own niche. It is used as a growth market for non-fungible tokens (NFTs) because it is faster and cheaper. Reduced casting costs and faster speeds make Solana the perfect place for small developers to build projects. Solana may be at higher risk than Ethereum, but its ecosystem should become more sophisticated over time.
Historically, more NFTs have been bought and sold on Ethereum, but there was a time when Solana’s daily NFT sales exceeded Ethereum.
For investors optimistic about NFT growth, Solana, which has a market capitalization of about one-tenth that of Ethereum, could be a better investment.
Risks worth considering
Migrating Ethereum from Proof of Work Consensus Mechanisms to Proof of Stake Mechanisms (such as Solana) Ethereum’s integration will significantly improve Ethereum’s speed and scalability and reduce transaction fees. If everything goes according to plan, the upgrade can lose many of Solana’s benefits.
Apart from the merge threat, there are other Layer 1 protocols that are in conflict with Solana. Solana takes a “throw on the wall and see if it sticks” approach, but Cardano is slowly and steadily moving forward. Despite intense criticism in the crypto community, Charles Hoskinson, the founder of Cardano, a former Ethereum co-founder, resisted the temptation to implement Cardano upgrades until ready.
High risk, high reward purchase
Given the scope of Solana’s sale, it could now be a great opportunity for risk-tolerant investors who believe in the ability to resolve Solana’s twists, reduce outages and remain a major player in the NFT market. there is. but, Bitcoin (BTC 3.74%). Ethereum will continue to be a safer alternative for investors with lower risk tolerance.