As two of the premier layer one blockchain networks available today, Solana and Ethereum share a number of similarities. Both are protocols that can host decentralized apps (dApps) and smart contracts, while boasting their own native currencies (SOL and ETH, respectively) which command a substantial percentage of the total crypto market.
However, when it comes to investing in the crypto market, risk, reward and safety should form the cornerstone of any approach. For that reason, we recommend reading up thoroughly on both of these cryptocurrencies and networks before deciding which one (if either) to grace with your custom. To get you started, here’s a brief introduction to the ways in which they differ to give you a basic understanding of the fundamentals involved.
History
Launched in 2014, Ethereum is one of the older hands in the world of crypto, especially when it comes to its layer one protocol. Over the last eight years, it has undergone many iterations and upgrades, not least the much-anticipated Merge in September 2022. Solana, meanwhile, entered the market for the first time in 2020. It enjoyed incredible early success, multiplying its market value by almost 30,000% in its first two years of trading.
Trust
Despite that staggering promise and progress, Solana’s relative youth means it is not quite as trusted as Ethereum among the crypto community at present. Indeed, the collapse of exchange platform FTX in November 2022 damaged Solana’s standing even further, since FTX founder Sam Bankman-Fried had long been an outspoken supporter of Solana. Until its rapid collapse (which occurred in just a few days), $1.2 billion of FTX’s $32 billion valuation was comprised of Solana stocks – but bankruptcy soon followed.
Availability
Another by-product of Ethereum’s relatively advanced years is the fact that it has been embraced by more users, developers and third-party companies than its youthful counterpart. There are an estimated 4,000 developers taking advantage of Ethereum’s programmable code (compared to roughly 1,000 working on Solana), while the former is accepted by almost all digital wallet providers – Solana is still playing catch-up in that respect.
Affordability
While Ethereum might be more established than Solana (and therefore more accepted and widespread as a result), the new kid on the block is not without its attractive qualities, too. Chief among these is the very low gas fees that Solana charges its users. On average, Solana charges around $0.00025 per transaction, though that figure can fluctuate depending on traffic and demand. Ethereum’s fees, on the other hand, are much higher. Also subject to fluctuation, they’re currently around $0.38, but have been known to reach as high as $23.83 in the past.
Speed
Another impressive string to Solana’s bow is the speed with which it is capable of processing transactions. Its use of the proof-of-history concept allows it to handle an average of around 30,000 transactions per second (tps), though its average maximum speed is double that figure. Ethereum, on the other hand, currently still processes a meagre 12 to 15 tps, but once the rollout of Ethereum 2.0 is fully complete, it’s expected to potentially reach speeds of 100,000 tps. Watch this space.
Both Solana and Ethereum have much going for them, with the former a cheap and speedy means of processing transactions, while the latter has time and trust on its side.