Solana ($SOL) Could Become the ‘Visa’ of Cryptocurrencies, According to a Bank of America Analyst
Alkesh Shah, a Bank of America digital asset analyst, thinks Solana ($SOL) has the potential to “become the Visa” of the cryptocurrency industry due to its emphasis on scalability, low transaction costs, and simplicity of usage.
According to report, Shah said that Solana has done more over 50 billion transactions since its inception in 2020, whereas Visa processed 164.7 billion transactions in the fiscal year ending September 30. The Bank of America analyst said in a research note provided to clients that the network has more than $11 billion in total value locked up in its decentralised finance (DeFi) ecosystem and has been used to mint over 5.7 million non-fungible tokens (NFTs).
Additionally, the expert stated: Due to its fast throughput, cheap cost, and simplicity of usage, it is ideal for consumer use cases like as micropayments, DeFi, NFTs, decentralised networks (Web3), and gaming.
He noted that Solana may soon overtake Ethereum in terms of market share because to its cheap transaction costs and emphasis on scalability, noting that Ethereum “prioritises decentralisation and security at the price of scalability, resulting in times of network congestion.”
While Ethereum can now process roughly 12 transactions per second, Solana has routinely processed over 2,400 transactions per second, according to network statistics. Solana’s theoretical maximum transaction rate is noteworthy at 65,000 per second. It’s worth remembering that Visa handles on average roughly 1,700 transactions per second and theoretically up to 24,000.
According to critics, Solana’s high transaction throughput comes at a cost, including security and decentralisation. Shah noted in his email that Solana is a “significantly less decentralised and safe blockchain,” whose trade-offs have been shown on multiple times by network performance concerns.
Solana has had a series of network congestions over the previous several months, some of which were purportedly caused by denial-of-service assaults connected with significant bot activity on the network. Congestions are anticipated, since Solana is a new blockchain with a lot of improvements that enable it to grow to manage such a high volume of transactions per second.
Shah added that although Ethereum’s priority may “optimise it for high-value transactions and identification, storage, and supply chain use cases,” it also provides opportunity for Solana and other scalable networks to capture a portion of its market capitalization.
According to CryptoGlobe, major cryptocurrency exchange Kraken predicted that the price of SOL might increase by as much as 260 percent this year due to the fact that it has been in a “broadening ascending wedge” and “appears to be in the early phases of its fourth wave of price discovery.”