Solana Could Flip Ethereum To Become “Visa Of Crypto,” New Study By Bank Of America Shows
January 14 2022 - 3:00AM
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New research from Bank of America Reveals Solana might become the
“Visa of the digital asset ecosystem.” Because of its focus on
scalability, ease of use, and low transaction costs, the bank
stated the Solana blockchain may very well become the equivalent of
Visa for the world of cryptocurrencies and NFTs in a research
report to its clients after hosting the Solana Foundation’s member
Lily Liu. Solana High Throughput Is It Merit In a Tuesday research
note, Bank of America digital asset strategist Alkesh Shah said
that Ethereum competitor Solana may become the “Visa of the digital
asset ecosystem.” The Solana network went live in 2020, and its
native token, SOL, has since grown to become the fifth-largest
cryptocurrency by market capitalization, with a market worth of $47
billion. It has been used to settle over 50 billion transactions
and create over 5.7 million nonfungible tokens, and it is an order
of magnitude faster than Ethereum (NFT). Critics claim that the
speed comes at the expense of decentralization and reliability.
Shah believes the advantages outweigh the disadvantages: “Its
ability to provide high throughput, low cost and ease of use
creates a blockchain optimized for consumer use cases like
micropayments, DeFi, NFTs, decentralized networks (Web3) and
gaming.” Bitcoin, the world’s most popular cryptocurrency, is up
3.3% this week. The price of ethereum, its closest rival in terms
of market capitalization, increased by 5.3%. Other big
cryptocurrencies are also experiencing strong gains. BNB is up
9.5%, cardano is up 16.2%, and Solana is up 10.6%. Furthermore,
Solana has some of the fastest transaction times in the industry.
In the note, Shah explained: “These innovations allow for the
processing of an industry-leading ~65,000 transactions per second
with average transaction fees of $0.00025 while remaining
relatively decentralized and secure.” Visa now processes 1,700
transactions per second (TPS), however the network has a
theoretical capacity of at least 24,000 TPS. On its mainnet,
Ethereum currently processes about 12 TPS (more on tier twos),
whereas Solana has a theoretical capacity of 65,000 TPS. Related
article | Solana: A Quick Review And Look Ahead Decentralization
trade-offs In March 2020, Solana was launched as a decentralized
blockchain capable of hosting extremely scalable apps. According to
Alkesh Shah, it is now the fifth-largest cryptocurrency, having
settled more than $50 billion in transactions and generated more
than 5.7 million NFTs. Because both cryptocurrencies allow smart
contracts, which are the basic building block of decentralized
systems like blockchain-based banks and NFTs, Solana is frequently
compared to Ethereum (non-fungible tokens). Shah conceded, saying,
“Solana prioritizes scalability, but a relatively less
decentralized and secure blockchain has tradeoffs, illustrated by
several network performance issues since inception.” The
cryptocurrency has gotten a lot of attention from investors in the
last year, and its price has risen by a whopping 4,000%.
Nonetheless, it is dwarfed by its nearest competitor, ethereum.
Solana has a market valuation of $47 billion, or little over
one-tenth of the size of ethereum. SOL/USD trades at $146. Source:
Tradingview Solana has had its fair share of network performance
issues in recent months, including withdrawal issues confirmed by
Binance on Wednesday, reports of delayed performance across social
media on Friday, and what appeared to be a distributed
denial-of-service attack on Jan. 5, despite Solana’s denial. Since
its start, Solana has settled more than 50 billion transactions,
totaling more than $11 billion USD in value locked. It’s also been
used to produce over 5.7 million NFTs, demonstrating its focus on
consumer applications like money transactions and even gaming.
Related article | Solana Trades Up 15.7%, But Network Issues Raise
Concerns Featured image from Investment U, charts from
TradingView.com
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