Innovation and Startups: Solana: Focus on the Cryptocurrency That Will Explode in 2022
Cryptocurrency investors have seen a meteoric rise in the price of Ethereum during 2021. The crypto ETH has seen its price increase by over 430% in one year, and has become one of the most expensive cryptos on the market today (though still much more affordable than bitcoin). Ethereum, in turn, has seen a significant increase in credibility, especially thanks to the backing of many institutional investors.
Online trading has become highly democratized in recent years, for enthusiasts, experts, and hobbyists alike. Many traders have also developed an interest in cryptocurrencies. For example, this enthusiasm contributes to the stabilization of BTC or ETH prices.
Nearing 2022, another crypto is making a lot of noise: Solana. The latter is much more affordable than Ethereum, and many crypto experts already agree that it promises impressive growth potential.
Good Reasons to Invest in Solana Cryptocurrency
With a market capitalization of over $52 billion, Solana is ranked as the fifth most popular cryptocurrency in the market today. For context, Ethereum currently has a market cap of over $452 billion. Solana has gained enough traction to compete with the biggest players in the crypto market, but it still has a lot of room to deliver decent growth.
Solana also has many similarities to Ethereum. Both networks are smart contract platforms that can host projects such as decentralized financial applications and non-fungible token (NFT) marketplaces.
However, Solana has one major advantage over Ethereum: its speed.
While Ethereum can currently process around 15 transactions per second, Solana has the capacity to handle 65,000 transactions per second. Because of this momentum, many developers have flocked to the Solana network, making it the fastest growing blockchain ecosystem.
Investing in Solana Cryptocurrency: Risks
While Solana is one of the most promising cryptocurrencies of 2021, it is not without risks. Some reviewers say that the Solana emphasizes speed over safety.
Recently, Solana’s network was hit by a Distributed Denial of Service (DDoS) attack. Although Solana remained online, the attack shook investor confidence and caused the price to drop by more than 20% in the days following the incident. Currently, the price is down about 30% from its peak last November. And this isn’t the first time that Solana has been the victim of an attack; Last September, the network was cut for about 17 hours.
Some experts worry that these security issues may not be resolved with Solana. According to a recent report by institutional investment firm Grayscale, Solana uses a consensus mechanism that is not used by other cryptocurrencies. Sure, its protocol is faster, but it’s also more vulnerable to attacks.
Investing in Solana in 2022: A Good Idea?
Nevertheless, Solana remains one of the most popular cryptocurrencies in recent months, with its price climbing more than 11,000% since the start of the year. Its exceptional growth gives it a decent advantage over its competitors, and many developers today prefer it to Ethereum or Bitcoin. However, its security concerns are worrisome. The network can become an even greater target for attacks as it develops and grows in popularity. So Solana developers will have to work hard to avoid further incidents.
For investors considering investing in Solana in 2022, be sure to view it as a mid- to long-term investment. Even more so than other cryptos, which are already volatile in nature, Solana can face major volatility. But if it can fix its security issues, it has the potential to rival some of the best crypto.
