With the entire crypto market experiencing a week full of ups and downs, Bank of America has chosen the cryptocurrency that could become the new trend in the industry. In a recent note, digital asset strategist Alkesh Shah said Solana could be the “Visa of the digital asset ecosystem” because it focuses on scalability, low transaction fees and ease of use.
Solana has gained strong and fast adoption since its launch in 2020 and ranks 5th in the cryptocurrency rankings. According to a note from analyst Alkesh Shah, the platform has processed more than 50 billion transactions (global payments giant Visa processed 164.7 billion transactions in the year ended Sept. 30), has a combined value of more than $11 billion in locked-in totals, and more than 5.7 million non-profits. It was used to print fungble tokens (NFT). Shah said Solana is optimized for consumer use cases like micropayments and gaming:
“The ability to provide high throughput, low cost and ease of use makes a blockchain optimized for consumer use cases such as micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming.”
The analyst also noted that Solana has more than 400 successful decentralized projects on the blockchain, and said Solana also has one of the fastest transaction speeds in the industry:
“These innovations allow transactions to be processed at an industry-leading speed with an average transaction fee of $0.00025 and approximately 65,000 transactions per second, while keeping transactions relatively decentralized and secure.
Solana prioritizes scalability, but a relatively less decentralized and less secure blockchain has had some issues since its inception, as evidenced by various network performance issues. Ethereum, on the other hand, prioritizes decentralization and security, but this results in periods of network congestion and transaction fees that are sometimes higher than the value of the transaction sent.
Solana’s Performance
Solana is often compared to Ethereum because both cryptocurrencies support smart contracts, which are the core building blocks of blockchain-based banks and decentralized applications such as NFTs (non-fungible tokens).
Over the past year, the cryptocurrency has garnered a lot of attention from investors and has seen a mind-blowing 4000 percent rise. Still, its size pales in comparison to its closest competitor, Ethereum. Solana has a market cap of $46 billion, just over one-tenth of Ethereum, and is trading at $148, a price that analysts consider undervalued.
The BofA analyst thinks this valuation gap bodes well for Solana, saying that this price gap means that the popular altcoin has not yet fully reflected its enormous potential in price. This gives the Ethereum rival cryptocurrency ample room to grow by stealing market share from Ethereum and other major cryptocurrencies.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.