Solana is Ethereum’s Killer despite valuing 30x less than ETH.
2021 was the year when the term Ethereum killer was used. Ethereum has the most prominent place in developing Dapps, while the 3rd gen crypto techs are rising as its competitor with its advanced tech. Cryptos like Polka Dot, Cardano, Solana is the successor of Ethereum, or should I say, Killers?
Ethereum is pioneering crypto in many aspects, while its successors are taking over the markets in recent years. Solana is one of the strongest Ethereum competitors.
It was developed by Anatoly Yakovenko who was previously a developer of Qualcomm, Intel, and Dropbox. The idea of Solana was brought in 2017 and officially launched by March 2020, having SOL as its token. Solana concentrates on developing Dapp’s, making payments, and creating NFT, it has a concrete Defi ecosystem like Ethereum network.
The early Funding distribution was by Investment firms and raised about $ 20 Million. It now has a trading volume (24 H as of March 2022) of $3.6 B and is increasing. Market Cap is at 54.0B
The native currency of Solana is SOL. The Dapp’s are developed by Rust codes. As Rust is less complicated, it is easy for developers.
Proof of History is the consensus mechanism used by Solana, which was developed exclusively by the developers for Solana. This consensus mechanism introduces timestamps for Blockchains to determine the block was mined/chained to the network. It used SHA- 256, a Verifiable delay Function.
The Sha- 256 hashes all the transactions and gives them a unique code in seconds. This way timestamps are added in each node in the right order and help to verify the transactions without delays.
Pros of Solana
Solana is the next Ethereum Killer, many factors contribute towards it.
Network is Fast
Solana has the fastest technology in terms of speed. By now they have surpassed 2,300 transactions per second crossing VISA’s TPS of about 1,700. New blocks are processed every 400 milliseconds which makes transactions fast. The founder, Anatoly Yakovenko says that in theory, Solana has the capacity to 50,000 transactions per second in any near future with the fundamentals Solana is built on.
Solana programmers do not need to learn a new programming language for coding Dapps and Smart Contract. Solidity is the native programming language of Ethereum, so it had to be learned. But Rust is a universal programming language used outside crypto too. Some Popular OS that used Rust are Windows, Linux, and macOS
The transaction fee is less than $1 which is way less expensive than Ethereum which has gas fees from $ 15 and has a history of crossing $100. Solana is more effective and affordable in case of fees. I mean, you don’t have to spend $100 to trade $200 worth of the coin.
Solana’s unique timestamp mechanism helps the verification process fast. Unlike Ethereum, the blocks and modes don’t need to communicate to verify an event. Instead, they can be cross-referred with the order they came in and with the unique has codes and timestamps.
Validators use the staking mechanism to mint Blocks. Along with Minting and Proof of history, Solana reduces the consumption of energy compared to others. It is environment friendly.
- Solana energy consumption per year- 3,186,000 KWh (0.0032 TWh)
- Bitcoin energy Consumption per year- 91 TWh
- Ethereum energy consumption per year- 103.59 TWh
Ethereum has Mempool which acts as the lobby for the transactions that are initiated and are waiting to be executed as they take more than 15 seconds. Unlike the Ethereum network, Solana does not have a waiting area as the transactions are processed immediately.
This acts as the bridge to more transactions/data from Solana to other blocks such as Solana, Ethereum, Terra, and Binance smart Chain with the capacity to increase the horizon in the future. It was launched in August 2021 by tweeting In Solana’s official Twitter account. Any data like oracle data, assets like NFT, etc, can be moved to other Platforms. Data are passed through trusted validators who are called Guardians.
Cons of Solana
Solana has been criticized for not being fully decentralized ever since its launch on Mainnet. It is said that more than 48% of the validators are Solana Developers. Experts even question that is “Solana is sacrificing its security for Speed and low fees”.
After launching in Mainnet Solana does not have smooth experiences as it has seen many attacks and glitches ever since. Distributors Denial Of Service Attack- DDOS is considered a cybercrime in many countries as it jams the network and causes an outage. Solana is not prone to DDOS attacks.
- DEC 2020- There was a massive 6 Hour outage, The validators were not able to mint Blocks. After a restart, they seemed to work fine.
- Sept 2021- A short-lived performance degradation issue. The cause of the outage was not shared publicly. So theories around the outages started popping up among users.
- 2 weeks later in Mid- September 2021, again an issue was caused by token offering as 300,000 TPS were initiated causing the malfunction. After 2 bugs fixing and 2 restarts, the Networks start working as usual.
- January 2022, Users suspected a DDOS attack because of the slowness. Anatoly stated, “There was some congestion due to mis metered transitions”. They say that they already had a fix, but most of the validators were not upgraded to the required hardware.
No long-term fix yet
Users have lost money, Network went done many times. They say the investigation is going on, but haven’t come up with any long-term fixes.
Higher Hardware requirements.
The requirements for starting as a Validator or Solana are very much expensive, as they have Higher hardware requirements. The Minimum RAM is 128 GB which is 4GB with SSD for Ethereum. This makes it hard for any individual who wants to become a Solana validator. Moreover, the networks work only on high Internet speed.
Solana VS Ethereum Difference
Few Promising Dapp’s in Solana
Solana being new to the industry is now underlying many Dapps and launches. The glitches and errors should be taken into consideration and developers should come up with long-term solutions. Solana is somewhat working as a hybrid model of centralization and decentralization. Only in long term, it can be said that if the market can sustain this or they will move to be fully decentralized. The future potential of SOL and Solana will become very bleak unless they work for a strong fundamental. Right now, it is hard to say if Solana can sustain its position as the strongest competitor to Ethereum. But Solana definitely has the interest of Crypto investors and Ethereum investors.