In May 2021, the crypto market peaked at $ 2.5 trillion and fell 50% in the months that followed. The market then recovered to a new high of $ 3 trillion in November 2021, but fears of sharp inflation triggered the sale of speculative assets (including cryptocurrencies), and the market was by January 2022. It was reduced in half again. Many popular cryptocurrencies are falling even further. for example, Solana (((( Sol 3.61% ). Currently, it is trading nearly 60% below the record high.
For better or for worse, that type of volatility is common when dealing with crypto assets. Still, there is no doubt that the market has generated huge wealth in a very short period of time. More importantly, all past recessions have ended with new highs in the market. In other words, every sale in the past was a buy opportunity.
With that in mind, it looks like a good time to invest in Solana. This is the reason.
A faster and cheaper alternative to Ethereum
Solana is a smart contract platform aimed at supporting scalable and user-friendly applications.Its core innovation is a consensus protocol to blend Proof of stake When Proof of historyA system that time stamps each transaction to create a verifiable sequence of events, thereby accelerating the confirmation process. To that end, the Solana blockchain can theoretically process 50,000 transactions per second (TPS) and achieve finality in just 13 seconds (that is, the time it takes to irreversibly incorporate transactions into the blockchain). .. Even better, the average transaction cost is now a fraction of a cent. By comparison, Ethereum It takes up to 6 minutes to process about 14 TPS and reach the finality, and currently the average transaction fee is about $ 14.
In short, Solana is a faster and cheaper alternative to Ethereum, and its value proposition has appealed to many developers. There are over 1,500 projects on the blockchain. NFT Marketplace With video games to social media apps Decentralized finance (DeFi) service. Solana is actually ranked as the 5th most popular DeFi ecosystem in the blockchain industry, with $ 7.22 billion invested in the platform. The developer team also recently announced Solana Pay, a product that could further disrupt the financial industry.
Solana Pay may be a big deal
Solana Pay allows consumers to pay directly to merchants using stablecoin, a type of cryptocurrency fixed at fiat prices. In other words, Stablecoin is very popular with DeFi investors because it is susceptible to the same volatility as other crypto assets.In fact, it’s worth over $ 4 billion USD coin -Stablecoin fixed to US dollars-Currently in circulation in Solana.
In addition, Solana Pay transactions are done by the Solana blockchain, not by banks, fintech or credit card networks, so they are settled quickly and cost a fraction of the cost. These savings can have a significant impact on a merchant’s bottom line. for example, PayPal We charge a fixed fee of 3.49% for each online transaction. That is, a seller could earn $ 96 for a $ 100 sale. But with Solana Pay, the merchant sees over $ 99.
Of course, there is a very long way to go from now to mainstream adoption. However, in the first month of Solana Pay, more than 600 merchants have been involved in the platform. Even better, the iOS app mtnPay.so allows merchants to actually integrate with SolanaPay. blockPOS software (formerly known as Square). The catalyst may help the product ignite in the coming months and years.
How big is Solana?
Solana’s bullish case is easy. It’s a fast, scalable, decentralized platform that allows developers to build all kinds of software and services. Products like Solana Pay can cause serious disruption to the current financial system. In a broader sense, as Solana’s ecosystem of software and services becomes more popular with consumers and investors, the demand for SOL coins will increase and their value will increase over time.
How much is it worth? No one knows the future. However, Solana currently has a market capitalization of $ 35.8 billion. If the current market capitalization exceeds $ 403 billion Ethereum, investors will be 10 times more profitable. Of course, Solana can eventually be much larger than that. It all depends on the level of recruitment that the blockchain can manage to achieve. But given the potential benefits, I think it’s worth buying this defeated cryptocurrency.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Advisory Service. We are miscellaneous! Asking investment treatises, even our own, helps us all think critically about investment and make decisions that help us to be smarter, happier, and richer. increase.