Solana

Solana vs. Cardano: Which is the Best Buy?

Solana vs. Cardano: Which is the Best Buy?

Crazy.com Editor-in-Chief Eric Bleeker, The Motley Fool Senior Crypto Advisor Bernd Schmid, and Fool.com Contributor Chris MacDonald Discuss the Case of the Bull Behind Solana ( GROUND 2.20% ) and gimbal (ADA 1.37% ) and which crypto can come out on top in the end. This clip from “The Crypto Show” on Backstage pass has been recorded on November 4.

Eric Bleker: So let’s move on to Solana.

I know there is a ton of interest. I feel like every week we have a lot of questions about Solana. The feedback is definitely there. It’s probably up at this point from 150 times last year. It sees a lot of traction, especially in the NFT space.

As I note on this light, it is now the fourth largest cryptocurrency it has surpassed Cardano before the show, is valued at $72 billion. The popular NFTs on the platform have generated a lot of interest, but in total they promise much higher transactions per second. Next, competing blockchains, it’s stated goals right now are over 10,000 times more volume than Bitcoin itself can handle. Also cheaper transactions.

If you are looking to buy an NFT via Ethereum (ETH 2.10% ) and you’ve got $100 gas charges and fractions of a Solana center or whatever right now, you can see why that’s attractive for the larger space.

I think some of the Solanas are really fascinating to tackle because they clearly show the speed at which technology is moving through space. It takes a radically different approach to other blockchains. Maybe we could just talk about Solana. Where do you even begin to wrap your head [laughs] on this kind of project? [laughs]

Bernd Schmid: You have already presented it so well and interesting that it has overtaken Cardano because Solana has really made progress.

I actually know where to start because they do something like I say radically different from other blockchains, at least in my understanding, and it’s something I also have one of those many things that I really want to understand better. It was actually a communications engineer who came up with this, who came up with this idea. He believed that the problems that blockchain has or are trying to solve are very similar to the problem that communication networks, like a cellular network, have to solve. It’s as if these many cell phones are communicating through a single tower, accessing the same frequency band, etc. That’s where he came from, and then he designed something based on co-communications networks that work for blockchain.

I don’t know if he calls it that. But in the white paper they wrote, they call it the proof of history. It’s basically an algorithm that allows, in my understanding, to not have the nodes distributed as normally in the blockchain you have multiple nodes, it can be tens of nodes or hundreds of thousands or even more nodes that all want to produce blocks to the blockchain and validate. They need to communicate with each other.

What Solana with this proof of history has apparently realized is that this competition happens on a single entity that needs to do it, and there is no need for communication to happen between these nodes to deal with this and that makes it really fast to process those transactions.

Apparently, security does not suffer. This proof-of-history algorithm that I’m trying to introduce, it actually comes before the consensus is built in the network.

I don’t understand exactly how these things interact yet, but it’s basically you have to distribute a network of nodes, but on a singular you can’t calculate, the next transaction to say, and that makes it really fast. Also, but it’s designed, they get a deeper level. It’s designed so that the hardware that needs or processes those transactions has high demands, largely on the exact numbers, but I think you need 120 gigabytes of RAM, random access memory to run such a node quite a large hard disk space and computing power as well in other networks is not like that. In fact, because of that also a little less, potentially a lot less decentralized than others.

But it comes down to this immense advantage of this incredible speed that this network already offers today.

Eric Bleker: Just a side note, I just wanted to go over a few quick questions. A Gator tells us that he uses the hold to Theta (Theta). Thank you for this Gator. Marco adds that blockchain capital is a big venture capital business less so in several start-ups, the big bucks. I just wanted to pass them on since this was our last conversation.

Now Chris, we featured five of your favorite cryptocurrencies two weeks ago and you had both Cardano and Solana on them. I’m intentionally going to cause a little conflict here because it makes it a little more interesting. Bernd, I think you specifically prefer Cardano over Solana. Chris, what would be your pitch to maybe investors looking for Ethereum alternatives to owning both?

Chris McDonald: I think like Bernd said there’s a reason why Solana overtook Cardano, it’s probably rightly so, I think it’s really important to address the proof of history, in the how Solana is able to have the speed she has and theoretically be able to process more transactions than Visa (V -0.64% ) at any given moment per second is amazing. In a split second, like you mentioned, Eric.

Solana’s speed and cost feature really gave it a leg up. Maybe just to build a bit on what Bernd was saying about proof of history as I understand it, when nodes validate blockchains, they have to do it in an order.

What Solana has done is introduce timestamps into the equation. When 1,000 transactions are offered, there is an exact time each was introduced, so there is no waiting to find out which one was submitted first so nodes can simply process them in order . It’s an absolutely incredible innovation in space. He is likely to be copied in the future, but Solana is the leader.

I think you mentioned that the various decentralized apps that are being built on Solana right now, like the Solana NFT Marketplace, are just taking off and there’s a reason for that. In addition to the NFT space, there are so many other opportunities that Solana opens up in relation to the market. Right now, it’s among the fastest and cheapest blockchain networks, so that’s a big competitive advantage.

I think there is reason to be bullish on both Cardano and Solana, but there is a strong case to be made that Solana can go much faster and much higher.

Eric Bleker: What would be the argument then in your opinion for Cardano, just because I was a very good bullish description of Solana itself, but I’m just curious what the advantages of Cardano would be in your comparison.

Chris McDonald: I think Cardano interests me in how the network evolves. Cardano is interesting in that it allows for more nodes as the network grows, which essentially allows the blockchain to be broken down into smaller chunks, and each, as the blockchain grows.

In theory, Cardano can scale and accelerate in speed. Both are extremely fast in this regard. I think the argument one can make with Cardano is network interoperability. It is able to communicate with other blockchains using the KMZ side gene protocol. This is interesting because more and more crypto projects are being built on various blockchains.

We’re moving, I think, from a siled crypto world to a more integrated world, so Cardano is more of the leader in that space and so there’s a really strong case to be made for both for sure.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice 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.