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Bank of America’s digital asset strategist, Alkesh Shah, predicted that Solana, a competitor to Ethereum, could become the “Visa of the digital asset ecosystem” in a January 11 research note.
The Solana Network was launched in 2020 and has since grown into the fifth largest cryptocurrency with a market cap of $ 47 billion. An order of magnitude faster than Ethereum, it was used to settle over 50 billion transactions and issue over 5.7 million non-fungible tokens (NFT).
However, critics argue that its speed comes at the expense of decentralization and reliability, but Shah believes the advantages outweigh the disadvantages:
“Its ability to deliver high bandwidth, low cost, and ease of use creates a blockchain optimized for consumer use cases such as micropayments, DeFi, NFT, decentralized networks (Web3) and gaming.”
He went on to suggest that Solana holds a fraction of Ethereum’s market share due to low fees, ease of use, and scalability, while Ethereum can be categorized as “valuable transactions and use cases for identity, storage and supply chain.” Shah, quoted by Business Insider
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has resulted in periods of network congestion and fees that sometimes exceed the cost of a transaction being sent.”
Visa processes an average of 1,700 transactions per second (TPS), but in theory the network can handle at least 24,000 TPS. Ethereum currently processes about 12 TPS on the mainnet (more on the second tier), while Solana boasts a theoretical limit of 65,000 TPS.
Shah admits that “Solana prioritizes scalability, but the relatively less decentralized and secure blockchain has trade-offs, as evidenced by several network performance issues since its inception.”
Solana has faced more than its fair share of network performance issues in recent months, such as withdrawal issues recently confirmed by Binance on January 12, social media delays on January 7, and what looked like a DDos attack on January 1.
This came less than a month after the previous December 10 attack, when there were reports of network congestion caused by massive bot launches related to the initial December offering (IDO) on the Raydium decentralized exchange platform in Solana.
In an interview with Cointelegraph on December 22, Austin Feder, head of communications at Solana Labs, said the developers are currently working on solving network problems, especially with regard to improving transaction accounting.
“The Solana runtime is a new design. It does not use an EVM (Ethereum Virtual Machine) and many innovations have been made to guarantee users the lowest fees, but there is still work to be done at runtime. “
#Solana #crypto #VISA
