Why Solana Can Beat EthereumNov 13, 2021
Last we wrote up Solana two months ago, the price was near $120.
Fast forward to today and the price has over doubled from there hitting high's near the $300 mark!
With such ludicrous returns, it is extremely tough for most to first now get involved. But as the days go on and the coin keeps going up, many of us are left dumbfounded and punching the air. So the questions we're getting right now are, "Should I still buy in? Is it a better buy than Ethereum?"
Let us help you answer it 👇
When we look at the numbers and see that if you invested $10k earlier this year you'd have $1,000,000 in only 9 months - it hurts for many. The feeling of despair and jealously quickly set in and then many start acting irrational out of desperation and FOMO. But what we actually need to is:
- Determine whether the coin has merit
- Determine if there is more upside coming
The key here is determining if the coin has more upside coming, not WHEN that upside is coming. While we can and do use TA (technical analysis) to trade these coins, the big upside is in their long term merit not short term trading. Therefore we've decided to analyze Solana as a project and see whether or not the coin is "real" or is just another sh*tcoin.
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So with that context, to answer our earlier question we need to understand what Solana is and what the technology does. Let's get into it below:
Let's start off by saying that Solana has real money and funding behind it. Earlier this year Solana secured $314 million in funding from many top VC's such as Andreessen Horowitz. When we see this type of backing it signals to us and the market that this project should be taken seriously.
So if the money behind it is real, what are they actually using the money to build?
Solana, at it's core is a layer-one blockchain network that has the ability to create smart contracts - very similar to Ethereum. Founded only 4 years ago by a former Qualcomm engineer, Solana is often talked about as the next Ethereum. This is because they have "solved" some of the fundamental scaling issues that Ethereum and Bitcoin have run into. This is huge because the "scalability" of the traditional blockchains are one of the core limiting factors to actual usability. If Solana can process transactions significantly faster than that of Ethereum, it can have a real shot as being used as a peer-to-peer transacting token.
But what's better also is that they can do this at a fraction of the costs of most other coin's transaction fees. Fee's on the bitcoin blockchain and Ethereum blockchain have gotten so expensive recently that it has detracted many from using their infrastructure. While Ethereum is already changing their staking system to help lower fee's it is estimated that this will not be down for another year or so.
However Solana already has their staking system set up! But the real innovation is due to their new staking system called, "proof of history". To spare you the boring details, the takeaway is that Solana can be more scalable, processing more transactions, at a fraction of the cost, than most other blockchains.
So to answer the above question, yes the coin has merit. But they also have more upside due to their potential.
Right now Solana is very large at nearly the 6th biggest coin by marketcap, but trading at $70B, they're still at a ~8x discount to Ethereum. While Ethereum has many more active wallets and is more established, Solana is one of the first promising coins to actually rival the potential future of Ethereum. Therefore we have and continue to buy more of the coin.
As the coin hits the mainstream, it will likely experience significant volatility in the coming weeks and months but over the long term we fundamentally believe in the viability of this project. We're holding for the long term and believe the coin can still 2-5x from here in the next year or two.
As for any short term trading spikes, we'll keep you up to date on that information via our discord channel! Please let us know if you have any questions.