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Bank of America thinks Solana could become the ‘Visa of crypto’

The Bank of America strategist cited that Solana is set to take a slice of Ethereum’s market share, due to its blessings of low transaction fees, scalability and ease of use.

Bank of America digital asset strategist Alkesh Shah has estimated that Ethereum competitor Solana could come to be the “Visa of the digital asset ecosystem” in a Jan 11 lookup note.

The Solana community launched in 2020, and has since grown into the fifth largest cryptocurrency with a market capitalization of $47 billion. An order of magnitude quicker than Ethereum, it has been used to settle over 50 billion transactions and mint over 5.7 million non-fungible tokens (NFTs).

Critics on the other hand argue its pace comes at the value of decentralization and reliability but Shah thinks the advantages outweigh the drawbacks:

“Its capability to grant excessive throughput, low value and ease of use creates a blockchain optimized for customer use instances like micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming.”

He went on to suggest that Solana is taking a slice of Ethereum’s market share due to its low fees, ease of use, and scalability while Ethereum may additionally be relegated to “high-value transaction and identity, storage and provide chain use cases,” wrote Shah, as quoted by means of Business Insider

“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction prices that are sometimes larger than the cost of the transaction being sent.”

Visa strategies an common of 1,700 transactions per second (TPS), however the community can theoretically deal with at least 24,000 TPS. Ethereum presently handles round 12 TPS on mainnet (more on layer twos), while Solana boasts a theoretical limit of 65,000 TPS.

Shah concedes that, “Solana prioritizes scalability, however a highly less decentralized and secure blockchain has tradeoffs, illustrated with the aid of various community performance problems considering that inception.”

Solana has skilled extra than its truthful share of network performance issues over the previous months, such as withdrawal problems most lately established via Binance on Jan 12, reports of delayed performance across social media on Jan 7 and what appeared to be a DDos assault on Jan 5, even though Solana denied this was the case.

This got here much less than a month after a preceding assault on Dec 10, with reports of network congestion precipitated through mass botting related with an initial Dec imparting (IDO) on Solana-based decentralized alternate platform, Raydium.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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