What is Solana?
Unlike the early days of the crypto market, investors are more inclined to base their decisions around fundamentals, thus asking questions like ‘what is Solana and how is it different?’ This has been the biggest driver of the huge growth in the coin we saw in 2021.
Solana is one of the world’s most popular cryptocurrencies in the market right now. It acts as a public account blockchain much like other cryptocurrencies (i.e. Ethereum and Bitcoin).
Solana operates on a decentralized blockchain which acts as a digital receipt to any virtual transaction made through it. Moreover, it can also be classified as one of the world’s fastest blockchains with processing speeds of 65,000 transactions per second. And it does that at a fee of less than one US cent.
A few applications that Solana as a blockchain can powers:
- Cryptocurrency – Solana allows users to send and receive coin. The coin can also be used to exchange it for goods and services.
- NFTs – It allows artists to sell their work as non-fungible tokens to consumers over the blockchain. (You can find out more about NFTs here)
- Decentralized payments – It allows the creation and use of permission-less payments.
A brief history of its incredible growth in 2021
Solana’s growth in 2021 may just be one of the most incredible events of the year. With a growth of 17500% as of November 2021, the coin garnered the nickname “Ethereum Killer”.
The new competition stemmed from the SOL smart contract feature and its expansion of features like blockchain gaming both of which Ethereum does not have.
How exactly is Solana different to BTC
| BITCOIN | SOLANA |
| Can handle approximately 5 transactions per second | It can handle over 50,000 transactions per second. |
| More commonly known as a slow and stable part of the cryptocurrency industry | It has a more centralized system which allows for faster day-to-day transactions |
| Bitcoin has relatively higher fees when compared with Solana | Solana offers lower fees compared to other blockchains |
| NFTs are not commonly used by Bitcoin | It also offers NFTs built on the network, increasing the range of uses. |
Who is backing it?
With Solana’s growing popularity it has since attracted the attention of many top investors. Both Garry Tan of Initialized Capital and the CEO of Bison Trails have expressed their interest in Solana.
Moreover, billionaire Chamath Palihapitiya invested in Solana’s infrastructure developer. In addition to this Solana saw investments from crypto exchange FTX CEO Sam Bankman Fried, Jump Capital, and CoinShares’ CEO Meltem Demirors.
What the future holds
According to long-term price prediction, the coin may hit a price of $300 in mid-2022 and see an increase to $500 by the end of next year. Furthermore, it can be said that Solana may see a rise in popularity as more investors become aware of the cryptocurrency.
Disclaimer: If you are new to investing in cryptocurrencies, be sure to educate yourself around the tax implications and responsibilities of this space. More on that here.
