Bank of America Says Solana Could Take Market Share From Ethereum, Become the ‘Visa of the Digital Asset Ecosystem’ – Altcoins Bitcoin News

Bank of America’s analyst says that Solana could take market share away from Ethereum. Noting that Solana is optimized for micropayments, gaming, and non-fungible tokens (NFTs), the analyst expects “Solana could become the Visa of the digital asset ecosystem.”

Bank of America: Crypto, Ethereum and Solana

Alkesh Shah (BofA) researcher on cryptocurrency published this week a note arguing that Solana may take away market share from Ethereum.

The Bank of America analyst described that Solana “produces a blockchain optimized for consumer use cases by prioritizing scalability, low transaction fees and ease of use,” citing Solana Foundation member Lily Liu.

Because of its simplicity and low price, the cryptocurrency is ideal for micropayments and gaming. Shah stated that there have been more than 50 million transactions since March 2020 and $10 billion of total value.

Solana may become the Visa for the digital asset system.

Solana, the fifth largest cryptocurrency has a market cap of approximately $46 billion. According to data from Bitcoin.com Markets. Ethereum has a market capitalization of nearly $400 billion.

Noting that Solana’s differentiation from Ethereum is “proving successful,” Shah noted that the valuation gap provides an opportunity for Solana. According to the Bank of America Analyst, Solana’s Proof of History blockchain can improve its Proof of Stake consensus process performance.

These innovative solutions allow the industry to process an unprecedented 65,000 transactions per second, with average transaction fees at $0.00025. They are also highly decentralized and secured.

Meanwhile, the Ethereum blockchain prioritizes decentralization and security, at the expense of scalability, Shah described, adding that Ethereum’s scalability issue has led to periods of network congestion and ultra-high transaction fees.

Emphasizing that other scalable blockchains could chip away at Ethereum’s market share, Shah explained:

Ethereum’s prioritization could optimize it for high-value transactions and identity, storage and supply chain use cases.

Crypto exchange Coinbase recently predicted that “ETH scalability will improve.” However, “As we welcome the next hundred million users to crypto and Web3, scalability challenges for ETH are likely to grow.”

Last week, a JPMorgan analyst explained that Ethereum’s Merge and Layer 2.0 introduction will speed up transactions and could significantly cut energy consumption. Another JPMorgan analyst pointed out that Ethereum could lose its dominance in decentralized finance (defi), due to scaling problems.

Solana’s problems are not yet solved. Last week, Bitcoin.com News reported that the Solana network experienced “degraded performance due to an increase in high compute transactions … This is leading to increased loading and transaction processing times, and some failed transactions.”

Are you in agreement with Bank of America about Solano taking market share from Ethereum to become the Visa of cryptocurrency? We’d love to hear from you in the comment section.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. He is interested in Bitcoin security and open-source software, network effects, and the intersection of cryptography and economics.