Powered by the Solana blockchain, the SOL cryptocurrency is considered a potential long-term competitor to Ethereum. You know Bitcoin. You may have heard of Ethereum.
And even if you’ve watched TV at some point this year, you’re probably familiar with Dogecoin as well. What about Sol? The lesser-known coin is going through a period of cryptocurrency frenzy in New York on Thursday morning, becoming the fourth-largest cryptocurrency with a market cap of $72 billion.
Solana as Competitor of Ethereum
Solana and Ethereum have gained support from the programming community, building features like smart contracts and NFTs on their platforms. Evangelicals meet regularly from San Diego to Hong Kong. Compared to other dominant coins, the Solana is relatively young. Solana’s idea was first announced in 2017 by developer Anatoly Yakovenko, while SOL debuted last year and soared in value late summer.
Transactions on the Solana blockchain are relatively inexpensive. Since Solana’s technology allows more transactions per second (tens of thousands) than less than 100 on Ethereum, miners who verify transactions on Solana charge significantly less than Ethereum. This means that space competition on the Solana blockchain is not that great.
Ed Moya, the chief market analyst at Oanda, said Ethereum is catching up here. However, things did not go so smoothly for Solana. A severe power outage halted trading for 17 hours in September. While some have questioned the network’s ability to grow, Bitcoin and Ethereum proponents see it as evidence of the benefits of using a more established crypto project.
In this fierce competition, SOL stood out in search of something new. New projects, new promotions, and new investors appear every day, but thousands of new coins have flooded the crypto space this year, most of which lack the functionality or depth of large coins like Sol.
SOL is one of the Largest Cryptos
People can borrow, trade, borrow, and use crypto assets. Solana promises that transactions on Solana will be cheap and superfast, unlike its main competitor, Ethereum. This potential has increased the coin’s value to date by approximately 14,000%.
According to CoinMarketCap, SOL is the 4th largest cryptocurrency by market cap as early November, valued at around $72 billion. This is far below the $1.2 trillion market value of Bitcoin. This is lower than the second Ethereum, at $540 billion. However, SOL has the edge over other altcoin preferences like Cardano or Litecoin, other related coins linked to Elon Musk, and worthless gamblers like Dogecoin and Shiba Inu.
Like smart contracts, charts comparing cryptocurrencies to market value are misleading. This is partly due to the different use cases of crypto networks. Paul Veradittakit, a partner at Pantera Capital in Menlo Park, California, breaks down crypto projects into several categories. Veradittakit bridges the Ethereum and Solana networks, enabling people to create computer applications within their systems. Users can, for example, create smart contracts that automatically pay and exchange data at predetermined times based on certain conditions.
Veradittakit said the higher the cost, the better the Solana might be for gamers or those looking to purchase items at a fraction of the NFT or lower value. This is why many investors are looking for other coins that can trade at lower prices. The theory is that if you choose the next Bitcoin, you will see huge profits.
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