The Bank of America deviser explicit that Solana is about to take a slice of Ethereum’s market share, due to its blessings of low transaction fees, scalability and simple use.
Bank of America digital plus strategist Alkesh monarch has predicted that Ethereum rival Solana may become the “Visa of the digital plus ecosystem” in a Jan 11 analysis note.
The Solana network launched in 2020, and has since full-grown into the fifth largest cryptocurrency with a market capitalization of $47 billion. an order of magnitude quicker than Ethereum, it's been accustomed settle over 50 billion transactions and mint over 5.7 million non-fungible tokens (NFTs).
Critics but argue its speed comes at the price of decentralization and reliability however shah thinks the advantages outweigh the drawbacks:
"Its ability to provide high throughput, low cost and ease of use creates a blockchain optimized for consumer use cases like micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming."
He went on to recommend that Solana is taking a slice of Ethereum’s market share due to its low fees, easy use, and scalability whereas Ethereum could also be relegated to “high-value transaction and identity, storage and provide chain use cases,” wrote shah, as quoted by Business insider
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.”
Visa processes a mean of 1,700 transactions per second (TPS), however the network will on paper handle a minimum of 24,000 TPS. Ethereum presently handles around twelve TPS on mainnet (more on layer twos), whereas Solana boasts a theoretical limit of 65,000 TPS.
Shah concedes that, "Solana prioritizes scalability, however a comparatively less decentralized and secure blockchain has tradeoffs, illustrated by many network performance problems since origination."
Solana has skilled over its fair share of network performance problems over the past months, like withdrawal problems last confirmed by Binance on January 12, reports of delayed performance across social media on January 7 and what appeared to be a DDos attack on January 5, though Solana denied this was the case.
(Keira Wright, Cointelegraph, 2022)