Despite Ethereum’s prevailing popularity, Solana is not to be dismissed. In fact, it outright outperforms its competitor in terms of transaction speeds and costs. As we dive in some more, you’ll find out the most noteworthy differences between the two and the advantages of each. Let’s get started!
Similar, but different
If we were to look at how each of these cryptocurrencies is designed, we’d see many structural similarities. The key difference to note is that Solana was built upon Ethereum’s core idea, but meant as an improvement that minimizes its issues with slow transaction speeds and high transaction fees.
Ethereum’s market cap is roughly $210bn and Solana’s market cap is $12bn, which is almost a 20x difference. However, keep in mind that Ethereum is currently the second most popular cryptocurrency of all time, so this is to be expected.
At the time of writing, Ethereum costs roughly $1200 and Solana about $14. Keep in mind that you can purchase a small slice of each of these coins as opposed to the entire unit, so the barrier to entry is the same.
A major difference between Ethereum and Solana is that the former is plagued with volatile transaction fees, while the latter is known for their consistency. Usually we’re talking about a few cents and up to one dollar, but during critical times, Ethereum’s fees can increase in two digits. Solana’s fees are consistently in the ballpark of one cent or less.
Solana allows for passive earnings. For instance, a Solana holder who owns 10 coins can expect to get 0.04 coins per month in passive income on certain staking platforms. If you want to take a more proactive approach to earning this cryptocurrency, there are many blockchain games that reward you for playing, including DeFi Land, Genopets, Cryowar, and others.
Ethereum also allows for passive earnings with crypto lending, staking, daily and long-term trading. P2E games that pay you in Ethereum just for playing include Mirandus, Benji Bananas, Illuvium, MoonCatRescue, NFT Worlds, and others. For a more detailed guide on how to earn cryptocurrencies, you can study the following resource:
An argument for Ethereum
From an investor’s perspective, Ethereum is much more well-known and also has a substantially higher market cap. Currently, more than 2900 Dapps are running on this platform while Solana only has about 350. Keep in mind that Solana is a relative newcomer to the crypto scene, having launched in 2020, 5 years after Ethereum. But no matter how you put it, Ethereum is the more well-known choice.
With September’s Merge in 2022, Ethereum has also adopted a proof-of-stake system that is believed to be more sustainable than the previous one. This effectively does away with the need to depend on miners to confirm transactions and replaces them with validators. Although the Merge did not eliminate high transaction fees directly, it effectively established a mechanism that will allow for it in the future.
An argument for Solana
As already mentioned, Solana introduces a unique and innovative take on Ethereum’s core concept with its proof-of-history transaction validation. Simply put, this imprints timestamps into the blockchain which helps contribute to faster transaction speeds because it optimizes the processing times. Already, Solana has become one of the fastest performing blockchain networks with the capacity to handle 3400 transactions per second. Compared to Ethereum’s 15 transactions per second, this is a notable upgrade.
Unlike Ethereum that suffers from network congestion when too many users are trying to initiate a transaction at the same time, causing higher gas fees, such problems are unheard of when transferring Solana. A single transaction predictably and consistently costs less than a cent, even during peak load times. Since Solana is less known than Ethereum, investors could potentially be looking at higher returns when (and if) it manages to become more popular in the future.
Each of these cryptocurrencies have their share of unique advantages and it’s on you to decide which one you prefer. Hopefully we’ve given you a reliable comparison framework to make an educated decision.