Sunday, December 5

Solana eats bitcoin and ether in one sitting

A little less than a year ago, Solana It was a completely unknown cryptocurrency to investors but in 2021, this emerging currency is up 14,000 percent and has completely overshadowed the advances of bitcoin and ether.

As advanced in the middle of the summer, the strength of Solana threatened the throne of ether as the most popular currency within the ecosystem of decentralized applications.

The spectacular rise of this currency has made Solana the fourth currency in the market by capitalization, according to the ranking of Coinmarketcap, with a value of 64,000 million dollars.

Solana is one of the networks surrounding Ethereum, with which it has connection bridges, with the nuance that transactions are cheaper and more efficient. This has been the main catalyst that propelled the currency.

Solana’s media coverage skyrockets

Media attention on Solana skyrocketed in the summer following the update of the Ethereum chain known as the ‘London Hard Fork’.

This technological overhaul reduced the remuneration received by miners to mine ether and encouraged the use of the Solana blockchain, which is much faster and cheaper.

“Solana has a technological advantage that allows greater scalability, that is, it makes it possible to have a number of transactions that no other network is capable of supporting at the moment,” he said. Alberto Toribio, Cryptoplaza ambassador.

The network can process around 60,000 transactions per second at marginal cost, making Solana a digital currency for daily payment operations.

High frequency exchanges

The combination of faster and lower cost make Solana’s blockchain especially suitable for high-frequency trading strategies for the exchange of cryptographic assets.

These operations are carried out through decentralized exchanges. Unlike what happens with brokers like Coinbase O Kraken, its users can directly exchange the currencies without the intermediary.

Actually, decentralized exchanges are markets, but the only difference is that the operations are not crossed by the broker, but there is a smart contract between the investors that regulates the operation.

And their use is one of the catalysts that is driving Solana, because in fact, they are operations that could not be done in Ethereum as they are very expensive and slow.

Price discounts Solana’s success

In this way, Solana has become “one of the most promising and scalable networks, although its success will largely depend on the need for use,” he said. Toribio.

The expectations that are being discounted in the price suggest that those cases of greater use are perceived as something that will come from investors

For this reason, “the market is discounting that the Solana model will be successful, although it may not happen,” recalled the Criptoplaza ambassador.

Solana’s critical moment

However, Solana’s brilliant trajectory in the markets has not been without significant scares. The biggest shock came in mid-September, when the blockchain service was interrupted.

The price fell 18 percent in just over a week, but the waters calmed down after the chain itself strengthened.

Little by little, confidence in Solana was restored, which has also fallen on the radar of exchange-traded funds.

For now, there are only two ETFs based on this currency that have 240 million dollars under management, although most of the funds entered this year, in the heat of the latest rises.

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