What is the Importance of Solana?

While Solana remains a lesser-known cryptocurrency, it peaked at $78 billion on the fifth of November, 2021. Solana’s rapid rise is a direct result of its supersonic speed. Solana is capable of processing close to 50,000 transactions per second. With Solana’s growth in its speed, it’s also speeding in its growth. This year, Solana is up over 10,000%.

What is Solana’s Purpose?

According to Genesis Block, “Solana is a web-scale blockchain that provides fast, secure, scalable, decentralized apps and marketplaces.” While Solana has similar goals to most cryptos, like Ethereum, it pushes to be faster and cheaper in every way. Fees for transactions are low, sitting at $0.00025, compared to inferior cryptocurrencies 

What is Solana’s History?

In 2017, Anatoly Yakovenko created Proof of History (PoH). In blockchains like Bitcoin and Ethereum, one of the limitations to growing in scale is the time required to reach a consensus on transactions. He created Proof of History to shrink the time for processing transactions. After collecting $20 million in funds from 2018 to 2019, Solana launched in March of 2020. Solana has established partnerships and projects with smaller cryptos like Circle, Audius, Wormhole, and Tether.

Should I Invest in Solana?

While Bitcoin and Ethereum make up over 60% of the entire crypto market, other cryptos like Solana, which are faster and have lower fees, have serious room to grow. Also, transacting NFTs, otherwise known as non-fungible tokens, is becoming a significant part of Solana’s platform. Solana is incredibly less energy-intensive than Bitcoin and Ethereum, which could prove to be a long-term benefit for Solana.

Solana is only a year old, which means that it has not had enough time to prove itself. Solana’s funds are also volatile because they are comprised of only a handful of investors. With Solana’s young age and small size, it has not yet made a significant contribution to the market compared to Ethereum. While Solana states it has over 300 projects and collaborations, Ethereum has contributed to 2900 projects. This can be a deciding factor for investors as it shows how established cryptocurrencies are. Also, while Bitcoin has a cap on its volume, Solana continues to inflate and could cause your coins to lose a lot of value.

Overall, Solana has a lot of potential but it needs to prove that it can compete with the large cryptos––like Bitcoin and Ethereum––and the small cryptos, too. There are so many new currencies coming out and most of them are dying out. Take caution in investing in small cryptocurrencies.

*Not a financial advisor. All investment strategies and investments involve risk of loss. Nothing contained in this article should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. The opinions expressed in this article are the author’s own. Harriton Banner does not endorse nor support views, opinions or conclusions drawn in this article and are not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.*