If you’re new to crypto, Solana may have slipped your mind, but don’t worry; we’re here to fill you in on this fast-growing project that’s taking on the industry’s biggest brands.
SOL, the cryptocurrency tied to the Solana network, has risen into the top ten cryptocurrencies in the world, fuelled by hopes that its blockchain architecture will be a long-term challenger to Ethereum.
With a market capitalisation of more then $35 billion, Solana’s cryptocurrencies will have more than tripled in value in only the few weeks. In the areas of decentralised financial services (DeFi) but also digital collectibles, when Ethereum currently reigns supreme, anticipation has grown as a consequence of Solana’s faster transaction rates and low transaction.
So, what exactly is Solana?
Solana is a blockchain network that aims to create a cryptocurrency-powered ecosystem of businesses and services.
Solana is not Bitcoin, but it has certain characteristics in common with Ethereum.
Solana is now capable of processing over than 50 000 transactions per month, which is more than Ethereum and Bitcoin combined, yet at a tenth of the price. Developers may also design and distribute customized apps in a range of web technologies on the Solana blockchain.
Policy coherence and transaction propagation are paid for using SOL, Solana’s native token.
So Solana isn’t a payment option?
No, just as equities in the technology sector function differently than stocks in the oil and gas sector, cryptocurrencies act differently as well.
Because there is a preconceived concept of what a money is and what it can and cannot accomplish, the word cryptocurrency is perplexing.
The fact is that numerous cryptocurrencies have quite different goals in mind, and only a tiny percentage of them are aiming to replace the ZAR and USD we have today as “digital currency.”
The bulk of cryptocurrency projects may be classified into one of two categories. They can just be purpose-built and designed for quite a specific function, such as Bitcoin and otherwise Litecoin, which were created specifically as alternative payment systems and pharmacies of value, or they will be more open and general in their operation, such as Ethereum or Solana, and be used for a wide range of reasons.
By taking actions as an Ethereum – based computer system for erecting devolved applications (DApps), and that are basically cryptography versions of regular apps like the one to you get on your headset, these cryptocurrency networks can serve as a foundation for many applications to be stacked on top of them. Consider how the internet enabled email, video chats, social networking, and so much more. Some of these multi-purpose cryptos have about the same goal in mind.
What distinguishes Solana from the rest of the pack?
Designed to fit the space
Solana staking is designed for speed, with a current transaction rate of over 50 000 per second. On the other hand, Bitcoin and Ethereum execute five and fifteen transactions per second, respectively. Visa’s payment network, for example, is reported to process over 1 700 transactions every second on average. Projects that use decentralised blockchain-based apps to recreate the financial system as we know it will need faster transaction processing rates.
Fees are quite cheap.
Solana’s costs are significantly cheaper than those charged by several other similar blockchain networks today. When compared to the identical transaction on the Solana network, Ethereum transaction costs are >200x more costly.
Solana’s blockchain ecosystem is quickly expanding and gaining traction. In fact, during the last three months, Solana has witnessed a 130 percent increase in projects (up to 181 projects at the time of writing). Solana’s entire value locked in smart contracts has surpassed $3.5 billion, a 200 percent increase since August.
Performance of Solana
Solana had also made considerable progress in recent months. This became due in part to a renewed interest in NFTs, with some of them being built on the Solana channel right now. The term “non-fungible token” is an abbreviation for “non-fungible token.” To understand them, you must first understand the concept “fungibility.”
Fungibility is a simple notion that refers to goods that may be swapped out for identical ones. As a result, non-fungible (opposite of fungible) denotes that it is one-of-a-kind and cannot be replaced, such as a one-of-a-kind trading card or the Mona Lisa artwork. You’d get something entirely different in exchange for either the card or the picture if you swapped them.
As a result, NFTs are “one-of-a-kind” digital assets that can be purchased and sold just like any other piece of real estate. The digital tokens may be viewed as certificates of ownership for both virtual and physical goods (such as in-app purchases and digital art) (such as real-life paintings and even houses).
With the NFT market reaching new highs in 2021, with revenues more than 30 times higher than in 2020, it’s easy to see why the blockchain networks that facilitate these transactions have gotten a lot of attention.
We can see how Solana has outpaced Bitcoin over the last year in the graph below.
Is it still a smart idea to invest in Solana?
That might be a once-in-a-generation chance to invest in a sound investment or a speculative bubble. In any event, once it comes to investing, diversification is typically a smart idea. Despite giving investment advice, research smart plans and Solana and form your own conclusion about the future. If you feel smart contracts and blockchains have a great prospect, Solana might be an excellent addition to your bitcoin portfolio.