Solana Could Flip Ethereum To Become “Visa Of Crypto,” New Study By Bank Of America Shows

New research from Bank of America Reveals Solana might become the “Visa of the digital asset ecosystem.”

Because of its focus on scalability, ease of use, and low transaction costs, the bank stated the Solana blockchain may very well become the equivalent of Visa for the world of cryptocurrencies and NFTs in a research report to its clients after hosting the Solana Foundation’s member Lily Liu.

Solana’s High Throughput Is It It Merit

In a Tuesday research note, Bank of America digital asset strategist Alkesh Shah said that Ethereum competitor Solana may become the “Visa of the digital asset ecosystem.”

In 2020, the Solana network was launched. Its native token, SOL has grown to be fifth in cryptocurrency market capitalization with a value of $47 Billion. This cryptocurrency has been used in more than 50 million transactions, created over 5.7million non-fungible tokens and is faster than Ethereum.

Some critics claim speed is at the cost of reliability and decentralization. Shah feels that the benefits are greater than 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.”

Bitcoin, the world’s most popular cryptocurrency, is up 3.3% this week. Its closest competitor in market capitalization was ethereum by 5.3%. Strong gains are being experienced by other big cryptocurrency. BNB is up 9.5%; cardano up 16.2%; and Solana up 10.6%.

Solana also has one of the fastest transaction times within the industry. Shah explained the following in the note

“These innovations allow for the processing of an industry-leading ~65,000 transactions per second with average transaction fees of $0.00025 while remaining relatively decentralized and secure.”

Visa currently processes approximately 1,700 transactions per seconds (TPS), but the network can theoretically process at least 24,000 transactions per hour. Ethereum is currently processing about 12 TPS, more on Tier Twos. Solana however has a theoretical capability of 65,000 TPS.

See also:|Solana: Quick Overview and a Look Forward

Deals on decentralization

Solana launched in March 2020 as a decentralized cryptocurrency that could host highly-scalable apps. Alkesh Shah says it now ranks fifth in cryptocurrency market, with more than $50B worth of transactions settled and more than 5.7M NFTs generated.

Both cryptocurrencies permit smart contracts. These are the fundamental building blocks of decentralized systems such as blockchain-based banks or NFTs. Solana (non-fungible tokens) is often compared with Ethereum.

Shah conceded, saying, “Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has tradeoffs, illustrated by several network performance issues since inception.”

In the last year, investors have paid a lot more attention to crypto and its price has increased by over 4,000%. It is still dwarfed in comparison to ethereum, which it has as a closest rival. Solana is valued at $47 billion. This represents less than one-tenth the market value of ethereum.

SOL/USD trades start at $146 Source: Tradingview

Solana has had its fair share of network performance issues in recent months, including withdrawal issues confirmed by Binance on Wednesday, reports of delayed performance across social media on Friday, and what appeared to be a distributed denial-of-service attack on Jan. 5, despite Solana’s denial.

Solana’s transactions have exceeded 50 Billion in total, with more than $11B USD of value. It’s also been used to produce over 5.7 million NFTs, demonstrating its focus on consumer applications like money transactions and even gaming.

See also:| Solana Trades Up 15.7%, But Network Issues Raise Concerns

Featured Image from Investment U. Charts by

Get more Crypto News at CFX Magazine