Blockchain technology has advanced tremendously in the past decade, and increasingly more investors are no longer intimidated by the volatile aspect of cryptocurrencies. Investment strategies like staking, NFTs, and emerging technologies such as Defi are living proof that the industry is expanding. In terms of disruption, a recent type of blockchain is gaining attention: Solana, the world’s fastest blockchain cryptocurrency that holds the theoretical capacity to process 65,000 TPS (transactions per second).
Meet Solana, The World’s Fastest Blockchain
Conceived in 2017 and launched in 2020, Solana is a blockchain platform developed to enable user-friendly and scalable decentralized applications. Furthermore, it is recognized as the fastest type of blockchain in the world due to its complex underlying technology. Solana uses both PoS (proof-of-stake) and PoH (proof-of-history) as consensus protocols to enable blockchain scalability and preserve decentralization.
The boom in NFT and Defi spaces had led to increased fees on the Ethereum Network, slowly convincing cryptocurrency investors to look for additional options. Solana gained recognition from the start as it hit the market with a unique value proposition: the ability to process as many as 65,000 TPS with almost no fees. Bitcoin can only handle 7 transactions/second, whereas Ethereum can handle 15 TPS.
Insane Transactions speed & Almost Zero Fees, Solana’s Competitive Advantage
As a PoS cryptocurrency with numerous smart contract abilities for NFTs and Defi applications, Solana’s potential goes beyond the financial markets. From an investment perspective, the tokenomics model is one of the first metrics that helps an investor decide whether or not a cryptocurrency is worth buying. Out of a maximum supply of 489 million SOL tokens, only 301 million are in circulation, and since the launch, Solana’s price skyrocketed from $1 in 2020 to over $200 in 2021. At the time of writing, Solana is the 5th largest cryptocurrency in the world.
Given that to many investors, using the Ethereum blockchain has become too expensive, Solana’s ecosystem has become their 2nd best choice. As a consequence, chain activity in creating decentralized apps, also known as dApps, has boomed. Currently, there is nearly $8.6 billion locked on the Solana platform.
Fast Growth Rate In DApps Strengthens Solana’s Market Value
A critical factor in assessing the success of a blockchain lies in its development growth rate, not just token price. Although there are over 3,000 dApps on the Ethereum Network and 400+ on Solana, the fact that Solana is just 2 years old makes it promising for investors worldwide. Another indicator of growth can be found on Github, a developer’s favorite platform to code. Given that Solana is an open-source type of blockchain, anyone can see the code as well as its progress. When looking at commits per blockchain, those experienced in programming will know that ongoing improvements are an excellent indicator of project growth and speed.
Innovative technologies from Netscape, Qualcomm, Google, and Intel lie at the core of Solana’s tech stack. As a DLT (distributed ledger technology), Solana can’t be slowed down. Furthermore, it can optimize data propagation and uses parallel GPUs to process transactions. As a consequence, Solana scales naturally with GPU, SSDs, and bandwidth cores. That’s how it can achieve 50,000 TPS using a network of just 200 physical different nodes.
Without a doubt, Solana is a next-generation type of blockchain. Its underlying technology coupled with an outstanding increase of the SOL token are indicators that there’s more to it than meets the eye. As for what the future holds, only time will tell whether or not the Solana blockchain will become a favorite blockchain platform for NFTs, DeFi, and additional decentralized applications. Needless to say, investors should be aware that the cryptocurrency market continues to be a volatile investment market.
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