Ethereum (ETH 0.94% ) and Solana ( GROUND 0.83% ) both are making headlines in the cryptocurrency world. They are growing by leaps and bounds when it comes to hosting projects on their blockchains and attracting investors to their coins. But their stories are a bit different. Ethereum came to the crypto scene early – in 2015. While Solana launched in 2020. Now the question is which is the better buy today – the more established player or the new kid on the block? block?
A major catalyst is on the horizon
Adria Cimino (Ethereum): Warning: A major catalyst is on the horizon for crypto giant Ethereum. The second largest crypto in the world is already a major player in decentralized applications (dApps). It dominates the market, with nearly 3,000 dApps running on its platform. But it could see its growth take off in the years to come. This is because Ethereum is about to do something that will make life much easier for users. The blockchain platform is preparing a major update. This is the one that will solve Ethereum’s big problem: transaction speed.
Ethereum 2.0 is expected to launch sometime next year. It’s about moving from a proof-of-work protocol to a proof-of-stake. The platform will ditch the energy and time-consuming process of complex calculations to validate transactions. Instead, it will assign validation assignments to potential validators based on the coins held. The upgrade also involves the introduction of shard chains. They will decongest the main network. All this means that transactions per second will increase from around 30 to 100,000. At the same time, power consumption will decrease, which will make the platform more environmentally friendly.
If all goes well, Ethereum will not only maintain its leadership, but it could gain even more market share. He already has the first mover advantage. That means others will have to prove they’re better – or differentiate themselves – if they hope to close the gap. Today is a good time to buy Ethereum as the gains have not been excessive compared to the performance of smaller cryptos. It’s up about 500% this year. This is to be compared to more than 12,500% for Solana. Since the price of Ethereum is around $4,300, it may not double or triple an investor’s money quickly. But over time, this platform can continue to show its strength and dominance – and deliver big wins.
Best option for scalability and speed
Jennifer Saibil (Solana): We are heading into the next stage of cryptocurrency, and Solana is one of the best options in terms of scalability and speed. As a new cryptocurrency, it has the advantages of advanced technology and also offers gains for investors as it grows. Again, the price of Sol, or Solana’s native token, has already gained a fantastic 10,000% over the past year. If you had invested $100 last year, you would be sitting on over a million dollars. That said, it is still a relative child compared to some of the more mature cryptocurrencies, like Bitcoin ( BTC 0.82% )with a market capitalization of $60 billion compared to nearly $1 trillion for Bitcoin.
Solana was created as a blockchain offering users the ability to develop “scalable, world-friendly applications.” It supports dApps, or blockchain-based projects, such as non-fungible token marketplaces and decentralized finance programs, and it already has over 400 projects. The way it works is that a developer can set up a program, or a smart contract, and it will appear on anyone’s computer that is part of the network or attached to the blockchain. What is different with Solana is that you can use multiple development languages to program, which makes it easier to use and also easier to communicate with other cryptocurrency platforms. how other cryptocurrencies are evolving their networks. With Solana, all dApps can communicate with each other, providing composability or the ability to build projects on top of other projects. It’s also more secure.
Additionally, Solana is low-cost and energy-efficient as it uses a proof-of-stake validation network, which means users need to stake their tokens to validate transactions. The transaction cost is as low as $0.01 and the system can operate at up to industry-leading 65,000 transactions per second. Solana is ahead of the cryptocurrency curve, and crypto investors should expect more from this growing platform.
Better to buy?
Ethereum and Solana both represent promising crypto investments today. They have demonstrated their ability to perform in the dApps space. Deciding which one to buy may be more a matter of investment style than anything else. Investors who are a bit more cautious can opt for the more established Ethereum. And those who are more aggressive might opt for a newer player like Solana. In any case, Ethereum and Solana are cryptos to watch closely in the coming year and beyond.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.