In a research report published, Alkesh Shah, the digital asset strategist at Bank of America, projected that Ethereum competitor (also called Ethereum killer) Solana might become the “Visa of the digital asset ecosystem.”
Solana Network continues to evolve
Since its debut in 2020, the Solana network has evolved to become the fifth-largest cryptocurrency, grabbing a market cap of $47 billion. It has been used in more than 50 billion transactions and to mint more than 5.7 million NFTs, thanks to its faster response than Ethereum.
Currently, Visa handles 1,700 transactions per second (TPS); however, the network has a theoretical capacity of at least 24,000 TPS. On mainnet, Ethereum can sustain roughly 12 TPS (more on layer two), whereas Solana has a theoretical capacity of 65,000 TPS.
Many have claimed in the past that its speed comes at the expense of reliability and decentralization, while Shah believes the advantages outweigh the disadvantages. He stated:
“Its ability to provide high throughput, low cost and ease of use create a blockchain optimized for consumer use cases like micropayments, DeFi, NFTs, decentralized networks, Web3, and gaming.”
Scalability comes at a cost
According to Shah, who was quoted by Business Insider, Solana is gaining market dominance due to its low fees and scalability, while Ethereum Network is limited to “high-value transaction and identity, storage, and supply chain use cases,” sometimes resulting in network congestion and transaction fees that are sometimes greater than the value being transferred.
“Solana prioritizes scalability,” Shah acknowledges, but a comparatively less decentralized blockchain has drawbacks, as evidenced by multiple network performance concerns.
Solana has had multiple network performance problems in recent months, including complaints of delayed performance on social media, withdrawal issues reported by Binance on Wednesday, and what seemed to be a DDoS attack on January 5, despite Solana’s denial.