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Tuesday, December 6, 2022

Solana Has The Potential To Be Crypto’s Visa: BoA

Alkesh Shah, the strategist for digital assets in the Bank of America, thinks that Solana, the top competitor of Ethereum, can be the digital asset ecosystem’s Visa. He said so on a research note on Tuesday.

Solana And Visa Comparison

In 2020, the network named Solana was launched. SOL, the native token of the network has continuously grown since then. Now it is the 5th biggest cryptocurrency by market capitalization. Its market cap currently stands at $47Bn. Its magnitude order is also faster than Ethereum. SOL has so far been used for settling more than 50 Bn transactions as well as for the minting of more than 5.7Mn NFTs.

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However, critics think that the rapid speed of SOL sacrifices reliability and decentralization. Regardless, Shah is of the opinion that the drawbacks outweigh the benefits. He says that Solana’s low cost, easy to use, and high throughput ability makes for a blockchain that is perfect for consumers of micropayments, gaming, Web3, NFTs, and DeFi.

He also added that Solana has been taking over part of the market share of Ethereum because of its scalability, easy usage, and low fees. Ethereum, at the same time, is viewed as more suitable and limited to identity and transactions of high value.

Today, about 1700 transactions are processed every second by Visa. Theoretically, the network can handle a minimum of 24,000 TPS. Ethereum’s mainnet handles about 12 TPS currently, but the number rises of Layer 2s. Solana’s theoretical limit is a whopping 65,000 TPS.

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However, during the last few months, there have been quite a few issues over the network performance of SOL, proving its reliability concerns. Most recently, on 6th January, Binance confirmed issues regarding withdrawal. On December 22nd, Solana Labs’ communications heads claimed that developers have been working to fix these issues.

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