Bank of America says Solana may supplant Ethereum, become the Visa of the crypto ecosystem. The Solana cryptocurrency, according to a research paper published this week. By Bank of America (BOFA) analyst Alkesh Shah. May eventually supplant Ethereum as the most valuable cryptocurrency.
Solana, in the words of Solana Foundation member Lily Liu, “produces a blockchain. That is suitable for consumer use cases by prioritizing scalability. Low transaction fees, and ease of use,” according to the Bank of America analyst.
For its simplicity and low cost, cryptocurrency is perfectly suited for micropayments. Gaming, and non-fungible tokens, among many other applications (NFTs). More than 50 billion transactions have been settled since the platform’s launch in March 2020. With a total value of $10 billion secured to date, according to Shah.
Solana has the potential to become the Visa of the digital asset economy. If it is properly managed.
A market valuation of more than $46 billion places Solana. As the fifth-largest cryptocurrency by market capitalization. Behind bitcoin and ethereum. As of this writing, Ethereum is the second-largest cryptocurrency. By market capitalization, according to data from Bitcoin.com Markets. At the time of writing, its market capitalization was approximately $400 billion.
Continuing his previous comment that Solana’s differentiation from Ethereum has “proved successful.” Shah noted that the current valuation gap between the two currencies. Creates a possible opportunity for the cryptocurrency. In the opinion of the Bank of America analyst. Its Proof of History blockchain adds to the enhancement of the performance. Of its Proof of Stake consensus mechanism, as stated in the following: “
The processing of an industry-leading 65,000 transactions per second. May now be performed with typical transaction fees of $0.00025. While remaining reasonably decentralized and safe as a result of these developments.
Derived from Ethereum, it focuses
It is the opinion of Shah that the Ethereum blockchain places a high focus on decentralization. And security over scalability, and that the blockchain’s scalability issue. Has resulted in periods of network congestion. As well as exorbitantly high transaction fees in the past.
The following day, Shah detailed how this could accomplished. Pacing particular focus on the notion that alternative scalable blockchains. Could reduce Ethereum’s market dominance:
According to the current state of events, as a result of the prioritization process. Ethereum may become more suitable for high-value transactions. And applications involving identification, storage. Including supply chain management, as opposed to the current state of affairs.
“ETH scalability will rise,” according to Coinbase, a cryptocurrency exchange. According to the authors, it expected that ETH’s scalability concerns will grow. As the next hundred million individuals join crypto and the Web3.
It predicted that the Ethereum Merge and Layer 2.0 deployments will speed up transactions. While also potentially reducing energy consumption by an amount that is considerable. The dominance of Ethereum in decentralized finance (defi), on the other hand. Is seen to be waning, according to another JPMorgan analyst. Who believes that this is due to concerns over the cryptocurrency’s scalability.
While dealing with these concerns, Solana is dealing with its own set of problems at the same time. An article published earlier this week on Bitcoin.com News stated that. The Solana network has “degraded performance due to a spike in high computation transactions… ” Consequently, the network’s loading and transaction processing times have increased. And it is possible that certain transactions will fail. As a result of the higher load and processing times.