Solana’s 27,000% Growth from 2020

Solana hit an all-time low of $0.5052 back in May 2020, and in a little over a year, it reached a price of $136. The tokens price has increased by 27,000% since its launch in 2020! Let’s look at why Solana has been so bullish.

Solana is the Seventh largest cryptocurrency in the world by market cap. It was launched in 2020 and claims to be “the fastest blockchain in the world and the fastest-growing ecosystem in crypto.” For such a relatively new token, the real question is, how did Solana manage to zoom past other more established tokens to rank in the top 10?

What is Solana?
Solana(SOL) is no different from Ethereum. In fact, it has been dubbed the new “Ethereum killer” because it does everything the Ethereum blockchain promises to do, but faster and much cheaper.

SOL is a programmable blockchain that allows the building of Dapps on its network whilst still serving the purpose of decentralization. Like Ethereum, Solana is built on open-source permissionless blockchain technology to build decentralized apps and provide decentralized finance solutions. The project’s protocol has achieved scalability by combining the Proof-of-Stake (PoS) consensus algorithm with a novel Proof-of-History (PoH) timestamp system.

Looking at SOL’s Fundamentals

Solana’s superfast blockchain network has earned it its spot amongst the top 10 cryptocurrencies in the world. Its network processes over 50,000 transactions per second and produces a new block in 400 milliseconds compared to Bitcoin, which creates a new block every 10 minutes, and Ethereum between 10 and 15 seconds. Electronic payment systems like VISA process 24,000 transactions per second. This metric is particularly important if cryptocurrencies will compete to be the future form of payments.

Also, Solana has one of the fastest programmable blockchain in the crypto space. For developers and those that want to understand what a programmable blockchain means, Let’s take a look at the first crypto, Bitcoin BTC, a non-programmable blockchain. It’s a vast, impenetrable decentralized ledger that records payment transactions without involving third parties. The Bitcoin ledger is public, secure, and virtually impossible to hack.

However, programmable blockchains like ETH and SOL are very different. They facilitate smart contracts, which makes them very useful for businesses. For developers building new technologies in the crypto space, non-programmable blockchains that enable smart contracts are almost necessary to establish their tokens or enterprises.

What are Smart Contracts, And why do they matter?

Smart contracts are programs stored on a blockchain that run when certain actions or predetermined conditions of a contract are fulfilled. They are typically used to automate an agreement’s execution so that all participants can be immediately sure of the outcome without any intermediary’s involvement or time loss. The idea behind smart contracts is simple, in a world where cryptocurrencies promise a new financial system without the influence of government and third parties. The fundamentals behind these technologies are aimed towards that.

The first programmable blockchain Ethereum attracted a host of developers who used it to build decentralized applications (dapps). However, the blockchain tech’s success resulted in the network being congested due to its heavy traffic. As a result, the fees increased, which proved inconvenient for developers and exchanges utilizing the blockchain for transactions.

Many new projects and even older ones are scrambling to take over Ethereum’s market share. This is where Solana rises above all other smart contract-focused cryptos and blockchain. Although introduced in March 2020, it has achieved scalability and success in its wake. SOL has accumulated an over 30 billion market cap ahead of meme-driven crypto, DOGE. By taking over Ethereum’s market share, It has surged to become a reliable blockchain and network for building Dapps. With its speed and fees, Solana’s price is estimated to increase in subsequent months.

Solana, Is it Sustainable in the Long run?

Many companies have benefited from being the first to market a product to a point where, even when much better and improved brands come out with the same products, people would rather stick with the original. We’ve seen it with brands like Uber, Kellogg, and many other brands that first launched a product or service. Businesses and brands are built on trust, and most people tend to trust what they are used to. While Solana’s Blockchain may be the go-to for new developers and emerging tokens because of its cheaper fees and faster transaction times, Ethereum will always be a top dog in its niche. This is because Ethereum is older and much more reliable.

Another thing to note is during Bitcoin’s correction a few weeks ago, Solana’s price dropped by a whopping 60%. From experience, coins that have such bullish nature are almost never stable. While the profits seem like a good buy, Solana may not be able to hold its own during bearish markets. This is an essential factor to consider as a crypto investor.

Also, Ethereum 2.0 is in the works, and the upgrade promises to improve the blockchain tremendously. The upgrade aims to enhance the network’s scalability, speed, effectiveness, and security through some changes to its infrastructure. These changes will increase Ethereum’s capacity for processing transactions, iron out bottlenecks, change the way users mine the cryptocurrency, and reduce gas fees.

In Summary
Solana has seen a very positive launch and first year in the crypto space, but that may not be enough to compare it to an older and more established Blockchain like Ethereum. The Solana protocol aims to do what Ethereum doesn’t, and so far, it has been doing that successfully. Still, SOL is very new to the crypto markets, and it’s too soon to know if it will stand the test of time. Yet, it is a very profitable trade for crypto day traders. For Holders, you must think long-term with this token.

Source: https://medium.com/@EO.Trade/solanas-27-000-growth-from-2020-da1e5f643377?source=rss——cryptocurrency-5