Ethereum is one of the oldest decentralised blockchain networks. It was conceived in 2013 and went live in 2015. Ether is the native currency of this platform. In market capitalisation, Ether is second only to Bitcoin. Solana, a newcomer, entering the market in 2020, grows over 16000% since the beginning, outpacing Ethereum. It is the 4th Biggest Cryptocurrency in The World now So, people are starting to see it as an Ethereum killer.
What is Solana?
Solana is a web-based blockchain that delivers apps and a marketplace that is quick, safe, and scalable. The network supports 50,000 transactions per second (TPS) and 400ms Block Times and making it the fastest blockchain network. The Solana initiative seeks to show the viability of a group of software algorithms that may integrate for the construction of a blockchain.
As a result, transaction output would rise proportional to the network capacity. It will still achieve most of the blockchain’s properties: scalability, security, and decentralisation. The SOL token is the native currency of this platform.
What makes It special?
1. Bitcoin uses a proof-of-work validation model and others use proof-of-stake. Solana uses Proof of History. Solana’s Proof of History (PoH) mechanism contributes to increased efficiency and throughput rate inside the Solana network. As a result of having previous records of events or transactions, the system can keep track of transactions while keeping a track of the sequence of the occurrences.
2. Turbine is a block propagation protocol. The Turbine protocol facilitates data transfer to blockchain nodes. Turbine does this by dividing the data into small pockets. This helps Solana in dealing with bandwidth issues. It boosts its total capacity to resolve transactions faster.
3. The Gulf Stream protocol is essential for moving transaction caching to the network’s edge. It allows validators to process transactions ahead of time. It lowers confirmation time, allows for speedier leader transition, and relieves the validator’s burden of unconfirmed transaction pools. So, it is because of this protocol that Solana can support 50,000 TPS.
4. Solana offloads data from validators to Archivers. These can be lightweight and will have a regular check to verify if they are storing the correct data.
5. Solana uses an accounts database that is easy to scale, called Cloudbreak. It is a data structure that is ideal for network-wide concurrent reads and writes.
6. Decentralized finance (DeFi) apps have found a home on the Solana network because it enables smart contracts. According to DeFiLlama statistics, the Solana network currently has roughly $15 billion in crypto assets locked up in it.
Is Solana killing Ethereum?
- One of the most important causes driving Solano’s value is that people are looking for alternatives to Ethereum. It is the world’s second-largest cryptocurrency making it a very crowded network.
- Ethereum processes around 15 and 45 TPS which is tiny if we compare it to the processing speed of Solara at 50,000 TPS.
- The number of projects running on each network is an important indicator of the competition between Ethereum and its competitors. Ethereum has the benefit of being the first to market but Solana is catching up. According to reports, Solana’s ecosystem includes around 350 projects.
- The Solana network has an extremely low transaction cost of $0.00025 per transaction. Solana is among the blockchains with the lowest transaction costs. In comparison, Ethereum now costs an average transaction price of $3-10 in September 2021.
As Solana’s price rose, many speculators believe that SOL would eventually surpass Ether, becoming the second-largest cryptocurrency. It is emphasizing retaining decentralization while providing instant transactions at a minimal cost.
It has attracted users but it is not enough to beat Ethereum. According to some analysts, Ethereum is too big for Solana to surpass it. Since Ethereum 2.0 is on its way, Solana surpassing Ethereum in the near future is highly unlikely.