When it comes to cryptocurrency, most people have heard of Bitcoin and Ethereum, the two biggest cryptos with market caps of more than $896 billion and more than $414 billion, respectively, according to CoinMarketCap. In the world of altcoins, one name typically comes to mind: Dogecoin, popularized by billionaire Elon Musk.
However, another altcoin, Solana, recently moved into the spotlight to become the world’s eighth-largest cryptocurrency, according to Forbes. Solana soared 10% on Monday and another 30% on Tuesday, lifting Solana to almost $130 per coin and raising its market cap close to $40 billion, Forbes reported. By Tuesday evening, Solana had dropped back down to $111, which is still hovering near its all time high and a stark contrast to its mid-June price, when it hovered in the mid-$30s, according to CoinMarketcap charts.- ADVERTISEMENT -https://s.yimg.com/rq/darla/4-6-0/html/r-sf-flx.html
The coin has jumped 275% since Aug. 1, and more than 2,348% since the beginning of the year, Fast Company reported. The crypto only launched 18 months ago.
What Is Solana?
Solana is a programmable blockchain, similar to Ethereum, that can run multiple decentralized finance operations. Unlike Bitcoin, which is a non-programmable blockchain, Solana and Ethereum offer the capabilities to store smart contracts, which can be programmed to fulfill transactions only when specific conditions are met. As a programmable system, the decentralized blockchain platform permits users not just to exchange SOL coin, but also non-fungible tokens and other digital assets.
Why Did Solana Skyrocket?
The growth of NFTs, including Visa’s investment in digital artwork last week and intense interest in NFTs from celebrity collectors, could have helped sparked the rapid growth of Solana.
Also, Forbes reported that Solana launched a “global Solana hackathon” yesterday, which will run through Oct. 8. The contest urges technology innovators to create and develop blockchain-based games, art and collectibles as well as decentralized lending platforms on the Solana blockchain.
Should You Invest in Solana, Ethereum, or Bitcoin?
Although Solana is viewed as a direct competitor to the Ethereum blockchain, Solana and other altcoins could also be taking market share and investment money away from Bitcoin. A CoinShares report on Monday showed that Bitcoin had lost $2.8 million in mid-August. Ethereum gained just $3.2 million, while Solana gained $7 million from crypto investors.
As a technology and an investment, Solana may show promise. The Motley Fool reported that Solana is faster than Ethereum, processing 50,000 transactions per second or more compared to Ethereum’s 15 to 45 TPS rate.
Bitcoin is on its way to gaining acceptance as a currency that can be used in place of fiat money in some places of business — most recently by enterprise-level customers of Peter Thiel’s Palantir, a big data analytics software developer. This gives the top crypto an edge for long-term investors.
But the growing prevalence of NFTs and smart contracts give programmable blockchain technologies like Ethereum and Solana a potentially bright future in the market. Ethereum has the advantage of being first, but Solana could prove to be faster and better.