Solana’s ecosystem is identified potential for the ‘Visa of Crypto’, according to the digital asset strategist of Bank of America, Alkesh Shah. The robust qualities of Solana include enormous capacity for scalability, low fees, and ease of use.
Looking at the major cryptocurrencies present in the market, Solana is the fifth biggest digital currency regarding market capitalization. It positions behind the Tether stable coin with generally $47 billion in market cap and a trading volume of $2.2 billion. However, Shah claims that there is one crucial principle that makes Solana different from other cryptocurrencies. This differentiation results in the focus of consumer design that Solana raises attention to.
In a statement, Shah mentions the ability of Solana to optimize the blockchain for consumer use cases. These cases include micropayments, DeFi, decentralized networks (Web3), NFTs, and gaming. He also noted that these advancements enable handling a high number of transactions per second. Particularly, an industry-driving of 65,000 purchases per second with an average transaction fee of $0.00025 while remaining decentralized and secure.
Furthermore, Shah added that Solana can cut up a part of Ethereum’s portion of the overall industry. At the same time, Ethereum would establish itself as the blockchain of choice for high-value transaction and identification, storage, and supply chain applications.
Diving in the topic of Visa, Solana seems to deserve it due to the high capacity of processing transactions per second. The average of transactions per second that Visa can process reaches 1,700 (TPS), with a theoretical maximum of 24,000 (TPS). Solana, on the other hand, has a theoretical limit of 50,000 TPS, which is slightly more than Visa’s. In comparison, Ethereum’s main net network has only 12 TPS, excluding transactions performed through Layer 2 solutions. These facts make Solana a great candidate to become the ‘Visa of Crypto.’
Solana’s Priorities vs. Ethereum’s Priorities
Moreover, the digital asset strategist points out the prioritizations of Ethereum and Solana. Ethereum is characterized by decentralization and security, while it has not prioritized scalability. This usually leads to network blockage and high transaction fees. Likewise, Solana also has its disadvantages. The priorities of Solana include scalability, while decentralization and security are secondary to them. These secondary principles lead to a few issues regarding network performance.
The increased interest in Solana has affected the network to be clogged out multiple times during the last few months. Accordingly, Binance has released a note regarding Solana’s withdrawal difficulties. Regarding this note, Binance considers the problem as an essential aspect of the network’s design. As a matter of fact, Binance recently added Solana’s native token, $SOL, to its Binance Loans program as a collateral asset. Furthermore, earlier this month, Solana was going down owing to what appears to be a DDoS attack.