© Reuters. This altcoin could outperform Ethereum, says major US bank
Bank of America (NYSE:) (SA:), one of the largest banks in the United States, praised the network (SOL), currently the 5th largest cryptocurrency by market cap, comparing it to , the largest network for executing transactions. smart contacts in the world.
“Solana could become the Visa of the digital asset ecosystem,” the bank’s cryptocurrency and digital asset strategist Alkesh Shah wrote in a research note published Tuesday. He cited the more than 400 decentralized applications on Solana’s network, which have a wide range of applications.
In comparison, he claimed that Ethereum could become the blockchain for “high-value transactions and identity, storage and supply chain use cases.”
Industry veterans have long compared the transactions per second (TPS) possible on blockchains with those performed on payment networks. Visa says it can theoretically handle at least 24,000 TPS.
The most frequently thought of TPS for Ethereum is 15. Which is not much given the demands of decentralized applications that are constantly “on-chain”. With limited transactions, fees on the network are typically measured in double digits – in dollars.
While many projects are trying to solve Ethereum’s scalability issues – including through sidechains and rollups – the congestion is unlikely to significantly reduce until the full release of Ethereum 2.0.
Ethereum creator Vitalik Buterin postulated in June 2020 that the upgraded network could reach 100,000 TPS. In comparison, Solana has a theoretical limit of 65,000 TPS.
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has tradeoffs, illustrated by a number of network performance issues early on,” Shah wrote, referring to a network outage in September and several minor issues.
The analyst also commented on , arguing that “attempts to find a middle ground” between Ethereum-level security and Solana’s speed could make it the best blockchain for decentralized finance and applications.
As for Solana, he noted that “its ability to provide high throughput, low cost and ease of use creates a blockchain optimized for consumer use cases such as micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming.”
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