Solana has caught the attention of Bank of America. In a recent statement, the financial giant stated that it feels Solana has what it takes to become the “Visa” of the cryptocurrency space.
There’s a Lot of Hype Surrounding Solana
The words came from the bank’s digital asset strategist Alkesh Shah, who clearly has high hopes for the altcoin. One of the main reasons for this thought is that Solana is one of several digital assets this week to experience great recovery. Last week, many digital assets were marred by dips into dark places, with bitcoin briefly falling below $40,000 and giving traders a good scare.
Now, things are starting to improve a little. Bitcoin, for example, is up by just over three percent, but this is small compared to some of the primary competing altcoins that have begun to dominate the space. Ethereum – the world’s second largest cryptocurrency and the primary competitor to bitcoin – has shot up by more than five percent, while BNB is up nearly ten percent. Cardano is up 16 percent, and Solana has shot up by more than ten percent.
Discussing Solana in a statement, Shah mentioned:
Its ability to provide high throughput, low cost, and ease of use creates a blockchain optimized for consumer use cases like micropayments, defi, NFTs, decentralized networks (Web3), and gaming.
Right now, the Solana blockchain hosts more than 400 successful defi projects. In addition, the chain features some of the industry’s fastest transaction speeds. Shah said:
These innovations allow for the processing of an industry-leading ~65,000 transactions per second, with average transaction fees of $0.00025 while remaining relatively decentralized and secure.
Still, Shah is warning everyone that despite the currency’s power, there are a few things traders need to watch out for. The analyst said:
Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by several network performance issues since inception… Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.
What Makes the Currency So Strong?
Solana has been around for just shy of two years, first launching in March of 2020. It’s big claim to fame is that it’s a decentralized blockchain that can host applications that are highly scalable. Solana is presently the fifth largest cryptocurrency and has settled more than $50 billion in transactions. In addition, it has also minted more than five million non-fungible tokens (NFTs).
Like Ethereum, Solana is popular amongst developers given that it boasts smart contract capabilities. Smart contracts are essential to decentralized applications like blockchain banks. Over the past 12 months, the currency has jumped in price by 4,000 percent due to newfound attention from investors.