In 2021, new stars appeared on the firmament of the cryptocurrency market – projects that can compete with Ethereum.
Why it became possible
Ethereum is not only the # 2 cryptocurrency, it is also the most popular blockchain platform for creating and hosting smart contracts and decentralized applications. Today, smart contracts are considered the best technical implementation of any contractual relationship.
In the context of the pandemic, many business processes have moved online and this has become one of the reasons for the sharp increase in demand for Ethereum. The platform faced an overload problem.
The lack of speed and scalability of Ethereum has created inconveniences before, so the search for ways to eliminate its shortcomings has been going on for a long time.
In particular, the team has been developing the Solana blockchain since 2017. The platform was launched in the spring of 2020.
Why Solana and Ethereum are compared
These blockchains are aimed at developing the sphere of decentralized applications for various purposes, including financial ones. Smart contracts are essential for the proper functioning of such applications. In addition, both platforms provide opportunities for creating non-fungible tokens.
What is Solana and what are the main differences from Ethereum
Solagna is an independent first level blockchain. Among competitors with similar capabilities, the platform stands out for its high scalability and transaction processing speed. Another competitive advantage of Solana is very low commissions.
Blockchain works using a combination of several consensus mechanisms – Proof of History (PoH), Proof of Stake (PoS) and a custom modification of Byzantine Fault Tolerance.
Transactions are verified using the PoS algorithm. The PoH algorithm timestamps each transaction and speeds up block confirmation.
Using the in-house developments of the team of creators, the Solana blockchain is by far the fastest platform with a very high scalability potential.
Verification of transactions on the Ethereum blockchain is performed using the Proof of Work (PoW) algorithm, the most cumbersome and energy-intensive one in existence.
What are the prospects for Solana
Solana’s platform is technically much more advanced. At the same time, Ethereum is much older, and age has its advantages. The platform has a lot more users and more functioning applications and time-tested stability.
It is worth considering that Ethereum is preparing to switch to the PoS algorithm. It is expected that after the transition to the PoS algorithm, the scalability and resilience of the blockchain will increase. That is, if the transition goes smoothly, many young competitors may not be in demand.
Investing risks in Solana
All cryptocurrencies are considered high risk assets. In Solana’s case, the risk is increased by the youthfulness of the project. Determining a future leader at such an early stage of development is almost impossible.
In addition, the coin has grown rapidly over the course of the year. A period of growth will necessarily be followed by a correction. Analysts see Solana as a potentially profitable investment, but it’s worth doing your own market research before investing.
Where to change Solana to Ether
The SOL / ETH cryptocurrency trading pair is available for exchange and trading on Binance, Okex and Coinbase Pro. In addition to these platforms, you can exchange SOL to ETH on the LetsExchange – instant cryptocurrency exchange platform. The functionality of the service is available without registration and KYC. The exchange operation takes a few seconds and after filling in the exchange widget is performed automatically at the best rate.
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