Solana and Ethereum have been competing since they became popular. Both altcoins share numerous similar features, from smart contracts to decentralized applications, but they’re also pretty different.
These unique platforms heavily contributed to the development of decentralized finance (DeFi). While Ethereum has an extensive tool library, Solana offers fast app deployment and low-cost creation.
However, blockchains have much more in common than cryptocurrencies. Ether benefited from popularity as a Bitcoin competitor, but the SOL value was solely based on its use cases.
While many see them as fair competitors, others view the situation differently. For example, Solana’s centralization is a reason of concern for investors and developers since it can risk its evolution.
On the other hand, Ethereum’s scalability struggles might continue despite the extensive updating roadmap.
So, is Solana a worthy opponent of Ethereum?
Solana best features
Solana is a high-performance blockchain operating as an open, interoperable, and decentralized global state machine. The architecture is composed of validators who secure the ledger to earn SOL by processing transactions and participating in the consensus.
There’s also a different group of validators called Clusters, whose job is to maintain the blockchain’s integrity.
Solana’s consensus mechanism is based on the Byzantine Generals Problem, an implementation allowing the PoS mechanism to run efficiently.
The blockchain also relies on PoH (Proof of History), through which the timestamp verification supports the network’s fast validation and low-cost fees.
These technologies can potentially allow Solana to reach 50,000 transactions per second, making it one of the fastest blockchains in the industry. Currently, the network’s TPS is around 5,000, but this might change in the future.
Ethereum’s best features
The Ethereum blockchain started as a Bitcoin competitor but moved far from that concept once it adopted and approached different developer tools. The global software platform is programmable and secure, making it an essential tool for emerging applications and technological advances.
There are plenty of important inventions based on the Ethereum blockchain. For example, Arbitrum Orbit is a RaaS (rollup-as-a-service), OpenSea is a popular NFT marketplace, and MetaMask is one of the most known EVM-compatible crypto wallets.
Ethereum uses the PoS consensus mechanism but initially relied on mining and PoW. After the monumental switch, Ethereum became more efficient and scalable since the outdated mining system hindered this innovation.
The Merge update was the first and most important change, but it preceded many others.
Solana’s problems with network outages
Although Solana is an impressive blockchain technology, it’s not free of challenges. Its network outages from 2022 affected investor trust, especially since they were the apparent cause of “cluster instability.”
Other reasons for the outages were previously identified bugs, making the network unusable for a couple of hours.
Experts consider the lack of validator client options to make the blockchain centralized and prevent the organization from focusing on infrastructure performance. For now, the main concerns of the blockchain are high throughput and low transaction times, but these should not be the only important aspects of a network.
Solana concentrates its validators in a super minority that controls a significant part of the platform’s total stake. This puts the ecosystem in danger since decentralization’s core features can be compromised.
Ethereum’s struggle with scalability
Ethereum’s biggest challenge is scalability. The rapid growth caught developers and project managers by surprise, so there wasn’t enough time for development and adjustments to avoid the issue.
Therefore, Ethereum could not handle an increasing number of transactions in the past, but even now, after several updates, it struggles.
Ethereum’s scalability issue led to:
- Network congestion due to system overwhelm;
- Increasing gas fees during peak usage times;
- Environmental concerns when it leverages PoW;
- Smart contract limitations, such as bugs and security flaws;
One cause of scalability issues is the limited throughput, which limits Ethereum to no more than 30 transactions per second. The latest proposal, EIP-7781, aims to solve this problem and improve the network’s processing capacity.
Can either of the blockchains solve the well-known trilemma?
The blockchain trilemma seems unlikely to be solved with current technologies. The idea is that blockchains should achieve decentralization, security, and scalability for a completely efficient network.
However, this is challenging since experts consider that reaching one goal would compromise the other. For example, more scalability might lead to centralization, while enhanced security can come at the expense of slow transaction processing times.
This can explain why Solana has such low fees and high throughput while Ethereum struggles with scalability.
In the end, it all comes down to what different projects prioritize. That’s why we have such strong competition in the market― offerings are different, which is a good thing.
However, more development should be made to reach as many of all three elements as possible to make blockchains truly usable and safe in the real world as well.
Which is a better future investment?
While both blockchains ensure valuable tools for application development and much more, their underlying cryptocurrencies are also helpful for networks and beyond. Both ETH and SOL are significantly successful in market capitalization and are important for staking on their respective blockchains.
In addition, investors and traders use them to diversify their portfolios and gain revenue.
Still, SOL is less popular and accepted among global companies, which ETH has already achieved. As the second-largest cryptocurrency on the market, Ethereum is getting closer to worldwide adoption, becoming the means of exchange for endless decentralized apps.
Investing in both SOL and ETH is a wise decision, considering their future in Web3. Pioneering decentralization is undoubtedly a reason for its popularity.
What’s your take on Solana vs Ethereum?
Solana and Ethereum are renowned blockchains for their smart contract functions and extensive tool libraries.
While Ethereum is more popular and has more market experience, Solana provides faster and cheaper transactions, making it a worthy competitor. However, both networks have their challenges, from outages to scalability problems.
At the same time, their currencies have an important role for validators, stakers, and developers, so we’re rather excited to see their future trajectory in the decentralized ecosystem.
