7 Reasons Why Solana Is Better Than Ethereum
SOL was launched in March 2020 to become one of the top 10 cryptocurrencies in the crypto market by total market capitalization. The Solana network implements an innovative hybrid consensus model as an attempt to solve the blockchain trilemma. It combines a unique Proof-of-History (PoH) algorithm with a lightning-fast synchronization engine, a version of Proof-of-Stake (PoS) to process over 710,000 transactions per second (TPS). Ethereum’s token Ether (ETH) is currently the second-largest crypto in the market according to DeFi Llama. Solana’s developers claim that the network can handle 65,000 transactions per second, making it the fastest blockchain out there and certainly quicker than the current iteration of Ethereum.
- Despite the rapid growth and adoption, Solana is still in its earliest development stage and developers are working on delivering smooth functionality as part of the final release.
- Like other cryptocurrencies, Ether is decentralized, meaning a single authority does not control it.
- In terms of price performance, I do expect Solana to keep outperforming Ethereum and even Bitcoin.
- Yakavenko described this in 2018 as “a way to encode time as data”.
- The platform has been created to provide developers with a place to develop user-oriented applications.
- It examines their governance, cross-chain interoperability, smart contract languages, token standards, scalability, transaction speeds, and consensus processes.
The protocol added smart contract scripting functionality to blockchains which improved the overall functionality and usability of cryptocurrencies. Developers can create using Solidity, C++, Java, JavaScript, Python, Ruby, and more. Its founder, Anatoly Yakovenko, designed Solana to support smart contracts and the creation of decentralized applications, or dapps. There are a few reasons why Ethereum and Solana are often compared. Smart contracts, or collections of code that carry out a set of instructions on the blockchain, are crucial in running decentralized finance, or DeFi, applications and nonfungible tokens, or NFTs. Solana’s blockchain operates on both a proof-of-history (PoH) and proof-of-stake (PoS) consensus model.
Ethereum consumes more energy than Israel and Belgium per year, contributing significantly to global warming. Many call Solana an Ethereum killer and expect it to surpass Ethereum in both the number of users and market capitalization. At the end of the day, both Solana and Ethereum have their list of pros and cons. So, if you’re having a difficult time deciding https://www.xcritical.in/blog/what-is-solana-crypto/ which blockchain is best for you, first ask yourself what your goals are. The Solana network uses a Tower Byzantine fault-tolerant (BFT), which removes the need for nodes to communicate with each other in real-time, and the result is improved efficiency. Currently, the Solana network can process approximately 50,000 transactions per second (TPS).
Originally, Ethereum was designed to run using a proof-of-work — or PoW — consensus mechanism, where each transaction on the blockchain is validated through cryptocurrency mining. PoW protocol helps the blockchain remain decentralized and secure, but it has been largely criticized for its slow transaction speed and the huge amount of energy it consumes. A blockchain as popular as Ethereum can consume the same amount of energy as a medium-size country using PoW. Even more plausible DeFi projects are leveraging Ethereum and Solana blockchains’ facilities.
At the time of writing, hundreds of leading DeFi projects are built on Ethereum, including the likes of SushiSwap, Compound and Maker. However, this surging demand has come at a cost and Ethereum has struggled with scalability and transaction speeds, resulting in periods of widespread congestion on the network. Ethereum offered developers a platform wherein they could use smart contracts to build more complex blockchain projects. Whilst the early cryptocurrencies were more or less limited to a means of value exchange, Ethereum opened up a world of possibilities and effectively set the stage for the DeFi boom. Polygon is one of the most renowned digital Blockchain platforms available to users.
Ethereum’s Proof-of-Work Consensus Mechanism
On the surface, Solana seems to be a much more efficient platform. Solana’s secret sauce seems to be programmed into its consensus mechanism, and it is called Proof-of-History (PoH). Behind Ethereum’s rise in the last few years is the fact that blockchain technology has become much more understood and accepted by the mainstream. In fact, a report by Deloitte shows that up to 86% of the companies they surveyed, were planning to put together a blockchain team. The difference between Ethereum and Solana in this regard is similar to a single-lane road with bumper-to-bumper traffic versus an empty expressway that doesn’t charge any fees to access.
Just these features alone make it one of the fastest performing layer-one blockchains. One of the key factors that separates Ethereum from Solana is https://www.xcritical.in/ the underlying technology. Each has a different consensus mechanism at its heart and each has unique ways of solving the problems around scaling.
This can have a significant impact on the currency’s value — the trading volume for Degenerate Apes amounts to tens of millions. Understanding the differences between Solana (SOL) vs Ethereum (ETH) can help you to improve your trading results and overall market comprehension. Both of these projects provide Dapp developers with flexible programming environments to create applications and tokens. However, there are some glaring differences between the projects when you dive deeper. The DeFi ecosystem is quite diverse on Ethereum, namely because it is a much older blockchain than Solana. The latter, on the other hand, has launched several different marketing strategies (hackathons, bug bounty programs) to invite more users and developers to its network.
Polygon offers a similar kind of scalability as Solana with even improved transaction speeds. Anatoly Yakovenko unveiled Solana, a high-performance blockchain platform, in 2020. It tries to overcome the scalability problems Ethereum and other blockchain networks experience. Solana developers chose to optimize the network’s architecture for extreme speed and scalability, and this created several problems. Solana’s blockchain grows incredibly fast, and, according to the Solana Docs, Google BigTable is used to store its transaction history. Reliance on a centralized intermediary like Google to store blockchain transaction history is seen as highly problematic.
This means that an older virtual machine might be more stable and have fewer errors than one that is newer. The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a top exchange for USA residents. Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume. There are 489 SOL scheduled for issuance throughout the entire life of the Solana network. This scarcity has helped Solana to provide users with a dependable store of value to HODL.
How does it compare to Ethereum?
Solana, on the other hand, is a much younger platform, but it provides faster and cheaper transactions without congestion problems. So, whether you choose Ethereum or Solana will depend on your needs and priorities. Ethereum is more reputable and secure but slower, energy-consuming, and more expensive. Solana is significantly faster, low-cost, and sustainable but smaller and more centralized.
On Solana, token addresses are represented by the Solana Address format that starts with a number and a letter, e.g., ‘5f.’ The address is a 44-character string long consisting of a public key and a program ID. In contrast, the program ID is used to identify the token program on the Solana network. On Ethereum, token addresses are represented by the Ethereum address format, a 42-character string starting with “0x”. The first 20 characters represent the token contract address, while the remaining characters represent a unique identifier for a specific token. Solana is still growing, so investing in SOL is more affordable now. We believe everyone should be able to make financial decisions with confidence.
One of the ways that Eth 2.0 intends to solve high gas fees is through sharding, which is the process of splitting one large blockchain into several smaller chains, or shards, to improve scalability. The goal of sharding is to increase the number of transactions the network can handle, thereby reducing congestion and gas fees. On Ethereum, transaction fees are determined by market demand and network congestion, with fees increasing during periods of high activity. This has resulted in high gas fees, especially for popular DeFi applications and NFT transactions.