More than ever before, this is no doubt a great time for anyone willing to invest in cryptocurrency to do so. With the price volatility and the addition of new coins with various applications coming online almost every day, cryptocurrency is indeed making a whole lot of sense now than it used to be.
If you have been in the crypto community for a while now, chances are that you are not new to the Ethereum vs Solana debate. With the recent surge in Solana price and also becoming the 7th largest cryptocurrency based on market capitalization, the coin is gradually confirming the speculation that it might one day become Ethereum killer.
Like Ethereum, Solana is also a decentralized open-source blockchain that can also support Dapps and smart contracts on its network. But could Solana really win the crown running against Ethereum? Let’s see some potentials of Solana.
Solana’s Recent Price Surge
Solana was created in 2017 by the former QUALCOMM Incorporated engineer. And since its creation, it has been experiencing steady growth in price and acceptability. In 2020, Solana was trading for around $2 per coin. But now, after a few months, its price has received a great surge that shocks the crypto community. Solana is now trading at around $170 per coin.
With the sudden growth, one might begin to wonder what could have been responsible for this sudden rise in Solana price. The first thing we could point to is the $314 million funding Solana secured in June from the sales of private tokens. The money has equally been put towards the expansion of Solana’s presence in Decentralized Finance (DeFi).
Another thing that might be responsible for the recent parabolic rise in Solana price is its strong presence in the NFT market. Solana is arguably one of the hottest places to go when looking to buy or sell NFTs. In fact, a couple of days ago, Solana saw its first million-dollar NFT sale.
Solana is also becoming a center of attraction in the crypto world because of its technical specifications, which arguably gives it an upper hand above the Ethereum network.
Ethereum is Also Not Slowing Down
Well, Ethereum too is not slowing down in its growth. In the last few months, it has done so well that it outshines many other cryptocurrencies, even Bitcoin. Ethereum price has increased around five-fold in the last 12 months, closing ground for any crypto to ever dare to come close to the 2nd largest in the world.
Ethereum has grown in popularity over the last few months and many companies have the plan of adopting blockchain in their operation because of the simplicity and use cases Ethereum offers. Many solutions are built on the Ethereum network, including different applications relating to Decentralized Finance (DeFi) – thanks to the ERC-20 and ERC 721 token standards on the network.
Although Ethereum also has its own limitations, it is no doubt still the world’s second-largest cryptocurrency behind Bitcoin. It doesn’t look like anything can stop it now.
Ethereum vs Solana
Many cryptocurrencies have closely run up against Ethereum in the past, and many of them are also termed Ethereum killers. A good example of them is Cardano. But when Solana vs Ethereum debate came up, it looks more like it in many ways. Let’s see some features of Solana that is putting it close to Ethereum:
#1: Transaction speed
If there is anything that is making many people consider Solana as Ethereum killer, it will be the incredible transaction speed of the platform. Today, Solana is able to carry out up to 50,000 transactions per second. That is incredibly higher than Ethereum’s 30 transactions per second. If there is anything today determining the scalability of any cryptocurrency, transaction speed is definitely going to be one of them.
#2: Transaction cost
As expected, since Solana is able to perform so many transactions in a second, it will definitely have a ripple effect on the transaction costs. And Solana is again winning over Ethereum in this area. On the average, transaction cost on the Solana network is around $0.00025. That is definitely much cheaper than what Cardano or Ethereum offers.
#3: The Proof-of-History (PoH) consensus mechanism
One of the factors contributing to the amazing effectiveness of Solana is its consensus mechanism, which is called Proof-of-History (PoH). The mechanism allows for validators to keep track of hashes in chronological order. That means validators will be able to process transactions as they come, without for a block to be filled. That way, more transactions can be processed every second.
#4: The Turbine protocol
Another thing that makes Solana a great alternative over even Ethereum is its Turbine protocol, which breaks up information into smaller bits, hence making it easier to process. This is similar to what Ethereum is proposing in its coming upgrade, which it calls “sharding.”
However, Ethereum is proposing lots of changes in its coming upgrade. Some of them include switching from PoW algorithm to PoS algorithm which will help the network to be more environmentally friendly in terms of the amount of energy it uses for its operations. The upgrade will also allow Ethereum to process more transactions per second and that will also have a positive effect on transaction costs. However, Ethereum 2.0 upgrade may not happen until 2023.
Pros and Cons of Ethereum
- The largest smart contract network
- Has first-mover advantage in many areas over Solana
- Host to most tokens and NFTs
- The network’s efficiency is likely going to increase with the coming ETH 2.0 upgrade
What are the cons of Ethereum?
- High transaction fees
- Network congestion due to high volume
- The network is hard to peer-review
- It’s a 1-layer system
Pros and Cons of Solana
- Incredible transaction speed
- Cheaper transaction costs
- Powered by both PoH and PoS algorithms
- Can be programmed in typical coding languages
What are some cons of Solana?
- Not as big as Ethereum
- Lacks support from crypto experts and institutions
- Requires expensive specialized hardware to mine
Solana vs Ethereum, Who Will Win?
So putting it all together, it is good to know the chances of Solana being Ethereum killer in the nearest future. Ethereum is presently an already established network with about 7,000 nodes and 90,000 validators. That is more than Solana’s 600 nodes and around 1,000 validators. However, Ethereum also has its own limitations. Notable among them is its limitation in terms of scalability and also its high transaction fees. But Ethereum is looking to improve all of these in its coming ETH 2.0 upgrade. Also, Ethereum is already hosting about 3,000 Dapps while Solana only has about 340 apps.
So talking about the chances of Solana topping Ethreum, Solana tends to have lots of potentials. But the first-mover advantage of Ethereum may not give too much space for Solana to come close.
Even though Solana has a lot of room for growth, it is unlikely going to replace Ethereum. The network has so much momentum, especially in terms of DeFi applications. Yes, transaction fees might be incredibly high on Ethereum and transactions might be slow, remember those still couldn’t stop EThereum from becoming the 2-largest cryptocurrency in the world.
But in terms of transaction costs, there may not be any cryptocurrency that comes close to Solana because of its amazing design. And this is giving Solana so much momentum today in the crypto world.
Even when other cryptos were falling 20-15% recently. Solana was able to hold its ground. That is definitely a good indication that Solana may not go away any time soon. It has come to stay!