Bank of America Thinks Solana Could be the VISA of the Digital Asset World

The Solana blockchain was a star in 2021's crypto space. The blockchain became a major player in the market, with more projects and protocols building on it.

Bank of America Thinks Solana Could be the VISA of the Digital Asset World

Heading into 2022, Solana aims to improve on several fronts. And even with a bullish crypto market starting out 2022, Bank of America believes in the platform's long-term growth.

Solana's Transaction Capacity Means a Great Deal

Earlier this year, Alkesh Shah, a digital asset strategist for Bank of America, said the Solana blockchain has massive long-term growth potential. In a note published by Business Insider, the strategist said Solana's unique properties make it the ideal platform to support some of the biggest, high-growth spaces in crypto.

Shah praised Solana's high transaction capacity and low cost. With these qualities, the blockchain ensures that developers building decentralized applications (dApps) will have quality support as their platforms grow.

dApps - like decentralized finance (DeFi) protocols and non-fungible token (NFT) marketplaces - need a lot of room to expand as transactions increase. Shah said Solana is an optimal platform to launch these services, paving the way for the blockchain to become the "VISA of crypto."

Currently, VISA is one of the world's biggest payment processors. The network handles up to 1,700 transactions a second. Theoretically, it could handle up to 24,000. Ethereum currently handles up to 12 transactions a second, while Solana holds a theoretical transaction throughput of 65,000 transactions a second.

Time for Ethereum to watch Out

Shah also said Solana is taking more of Ethereum's market share. With low fees and optimal scalability, Solana appeals to more developers, though Ethereum continues to take the cake for use cases like supply chain management, storage, and high-value transactions.

"Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent."

With Solana prioritizing scalability, developers who want to optimize growth are getting curious.

This isn't to say that Ethereum doesn't have value. The blockchain dealt with massive scalability issues in 2021, but the Ethereum Foundation is touting its Ethereum 2.0 update as the solution. If the update is successful, the Ethereum blockchain could become more scalable and support more dApps.

In the meantime, Solana is working on retaining developers and ensuring they get maximum value.

Several other blockchain platforms are also staking their claim to the crown. Cardano, the Binance Smart Chain, and even the XRP Ledger are willing to receive the influx of dApp developers seeking stable platforms.

Security Issues Plague the Solana Blockchain

That said, it's not all been rosy for Solana. The network has faced several performance-related problems over the past few months.

In December, the Solana blockchain was reportedly hit with a distributed denial of service (DDoS) attack that knocked the network offline for about 24 hours. GenesysGo - an infrastructure development firm based on Solana - reported the matter and attributed the issue to "growing pains." As the company explained, the Solana validator network was experiencing challenges processing transaction requests. Things were eventually resolved.

Another outage came this month. Wu Blockchain - a famous blockchain media company - reported that the Solana network went down for around four hours, purportedly due to another DDoS attack.

The attack clogged the entire network, causing transactions to fail. Solana Labs co-founder Anatoly Yakovenko reportedly denied any DDoS attack rumors, although several sources confirmed they could not process transactions for an extended period.

If Solana's developers are serious about taking the blockchain crown from Ethereum, they need to show solid security. Security issues are never a good look for a blockchain platform, and Solana might be putting users in a position to choose between high transaction throughput and the security of their own funds.

0 Comments • Tap In (Sign in) to comment

  • No comments yet