One interesting thing about cryptocurrencies is their close ties with technology and innovation. It's very hard to say anything about a cryptocurrency minus mentioning one or two innovations. Spicing the sector further is the constant competitions that emerge between various blockchains almost on a weekly or monthly basis.
Solana, one of the primary cryptocurrency platforms in the world, recently announced plans to introduce new upgrades to make the network more favorable to everyone. Considering that Solana is Ethereum's closest competitor, everyone is wondering whether Ethereum will stand the new development or not.
This piece identifies the key features of Ethereum and Solana and then explains some of the possible impacts of the new upgrades on either of the two cryptocurrencies. But before I begin, I would like to remind you that Solana and Ethereum are two significantly similar blockchains.
Understanding the Basics of Ethereum
Ethereum is a remarkably versatile cryptocurrency, coming second to only Bitcoin with regard to success, total market capitalization, daily trading volume, and largely everything else. The native token on the blockchain is the Ether (ETH for short). That means we pay for services or commodities on the Ethereum blockchain using Ether.
Ethereum also embraces the concept of decentralization just like all other cryptocurrencies. According to the Investopedia website, Ethereum was developed from the foundation to be a distributed computer system that facilitates application development and financial services, including trading. Working on Ethereum, users build, test, and deploy software for varied uses.
Among the unique features of Ethereum are the smart contracts, which are actually autonomous financial applications. They allow automation, thus enhancing transparency and accuracy during transactions. The automation by smart contracts also ensures improved speeds, something desperately needed on crypto networks.
The Ethereum blockchain also gives you access to many other features such as the Non-Fungible Tokens (NFTs), games development, Decentralized Finance (DeFi), decentralized Organizations, and so much more.
A Quick Comparison Between Solana & Ethereum
I just like how Solana is mostly referred to as The Ethereum Killer because, after all, it really does give Ethereum a reason to panic. SOL, which is the blockchain's native coin, is used in transactions and trading. Additionally, the Solana platform supports almost everything available on Ethereum.
The two blockchains, however, differ slightly in some aspects. For instance, starting with the consensus mechanism employed in each case, you find that Solana uses the Proof-Of-History (PoH), while Ethereum uses the Proof-of-Stake (PoS) algorithm. Ethereum initially employed the slow and less efficient proof-of-work mechanism similar to Bitcoin's before upgrading to the current PoS technology.
Both PoS and PoH ensure extremely high-security standards of the respective networks, only that Solana's Proof-Of-History mechanism is a lot faster and more energy efficient. This is according to a Forbes Advisor article. Therefore, it's fair to say that Solana outperforms Ethereum by a lot in terms of scalability and can process significantly numerous operations quickly and even more affordably.
What Solana's Upgrade Entails
As per 2023 statistics, the Solana blockchain was able to retain half of the total number of developers working on the platform. This signifies an impressive work environment and great community confidence in the cryptocurrency network. The incoming upgrades, however, are intended to make Solana even better.
Once completed and deployed, the updates will make the Solana blockchain more flexible than Ethereum. Additionally, the platform will become extremely efficient, thus ensuring faster processing and increasing the possible transaction volumes Solana can handle in a given time.
Two other amazing things to mention about the upgrade are the potential to introduce various consumer Apps and cut the transaction costs by a huge margin. So the move is going to be a big deal to all the developers and the SOL community at large.
But Can the Improvements Really Kill Ethereum?
Even though Solana promises a potentially more lucrative and diverse future, beating Ethereum requires fixing certain things first. For instance, SOL needs to rectify its problems such as frequent network downtimes to make the platform more reliable and pleasing to many entrepreneurs. Notably, Ethereum's market cap is still larger than that of Solana by far. So unless the above issues are fully addressed, Solana can barely dethrone Ethereum.
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