Solana Could Be the ‘Visa of Cryptocurrency’: Bank of America

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2022-01-14 23:15:05

The Bank of America strategist stated that Solana will take a share of Ethereum’s market share, due to its advantages of low transaction fees, scalability, and ease of use.

Bank of America digital asset strategist Alkesh Shah has predicted that Ethereum competitor Solana could become the “Visa of the digital asset ecosystem” in a research note. save January 11.

The Solana network launched in 2020 and has since grown into the fifth largest cryptocurrency with a market capitalization of $47 billion. An order of magnitude faster than Ethereum, it has been used to settle over 50 billion transactions and mint more than 5.7 million non-fungible tokens (NFTs).

However, critics argue that its speed comes at the expense of decentralization and reliability, but Shah argues that the benefits outweigh the cons:

Its ability to provide high throughput, low cost, and ease of use creates a blockchain optimized for consumer use cases such as micropayments, DeFi, NFT, decentralized networks (Web3) and play games.”

He went on to suggest that Solana is taking a slice of Ethereum’s market share due to its low fees, ease of use, and scalability while Ethereum could rank in “valuable transaction and supply chain use cases.” high value, storage and supply chain”. Shah, as quoted by Business Insider

“Ethereum prioritizes decentralization and security, but at the cost of scalability, this has led to periods of network congestion and transaction fees that are sometimes greater than the value of the transaction being sent.”

Visa processes an average of 1,700 transactions per second (TPS), but the network can theoretically process at least 24,000 TPS. Ethereum currently processes around 12 TPS on the mainnet (more on that on a two-layer network), while Solana boasts a theoretical limit of 65,000 TPS.

Shah acknowledged that, “Solana prioritizes scalability, but a relatively less decentralized and more secure blockchain has tradeoffs, exemplified by a number of network performance issues since its inception. “

Solana has experienced numerous network performance issues over the past months, such as the withdrawal issue most recently confirmed by Binance on Jan. 12, delayed performance reports on social media on Jan. January 7 and what appears to be a DDoS attack on January 5, although Solana denies the case.

This comes less than a month after a previous attack on December 10, with reports of network congestion due to mass botting related to a December initial offering (IDO) of the platform. Decentralized exchange platform based on Solana, Raydium.

In an interview with Cointelegraph on Dec. 22, Austin Federa, head of communications for Solana Labs, said that developers are currently working on solving the network’s problems, especially related to related to improving transaction measurement.

“The Solana runtime is a new design. It does not use EVM [Máy ​​ảo Ethereum] and a lot of improvements have been made to ensure that users get the cheapest possible fees, but there is still a lot of work to be done at runtime. ”

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