The price of Solana coin SOL is up 35 percent in a week, part of a market-wide rally triggered by Bitcoin that helped push SOL to $212.57 in the past 24 hours, approaching its record high of $222 set in early September.
Two of the hottest names in the blockchain space, Solana and Cardano (ADA) are often compared because they are several things in common including smart contracts and a proof-of-stake system to validate transactions. Another is the idea that “the market believes Solana and Cardano have the best chance of usurping Ethereum as the leading blockchain,” according to CryptoQuestion.
At the time of writing, Solana is at sixth place in rankings by market capitalization ($65,115 billion) while Cardano, by comparison, sits three places higher at fourth place ($70.891 billion), according to CoinMarketCap.
If Solano’s price increases 8 percent-or-so this week and Cardano’s stays relatively flat, Solana’s $65 billion market cap could hop over Cardano’s $70 billion.
Bitcoin reached a new record high above $66,000 last week, helping push up the total crypto market capitalization to a new milestone past $2.5-trillion. That helped push SOL higher, with rival cryptocurrencies Ether (ETH) and Cardano’s ADA also jumping in the past week.
The Solana protocol supports the development of decentralized app (DApp) creation to improve scalability by introducing an innovation — proof-of-history (PoH) consensus — combined with the underlying proof-of-stake (PoS) consensus of the blockchain. It attracts small-time and institutional traders alike with its focus on making decentralized finance accessible on a larger scale. The purpose of PoH is to encode “trustless passage of time into a ledger,” according to CoinMonks Telegram, a nonprofit crypto educator. “A Proof of Stake (PoS) consensus mechanism is then leveraged for confirmation of the current sequence produced by the Proof of History generator. PoS is also used for voting and selecting the next Proof of History generator node and for punishing any validators that act against the interest of the network.”
The Cardano blockchain platform operates on a decentralized proof-of-stake consensus mechanism, which is more energy-efficient than the proof-of-work (PoW) used by legacy blockchains Bitcoin and Ethereum. Projects using Cardano’s protocol include payments, voting and national currency management, according to Benzinga.
Cardano and Solana both experienced unprecedented price increases, hitting all-time highs in 2021. Solana token SOL started 2021 trading at $2 and is now at around $214. Cardano token ADA was worth about $0.18 at the beginning of 2021 and is now at $2.17.
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Proof of stake system is the main reason why these two crypto platforms are called Ethereum killers. For now, they’re more efficient and have a smaller environmental footprint than Ethereum, Business Insider reported. However, Ethereum plans to introduce version 2.0 in 2022, which it says will reduce its energy requirements by as much as 99 percent.
Who will come out ahead?
“Solana has solved (the problem of scalability) with a system of cryptographic time-stamping that currently can accommodate 65,000 transactions a second, which is astonishing,” crypto investment analyst Brett Hope Robertson told MoneyWeb. “Nobody has come close to this, including Visa.”
The Moguldom Nation CEO Jamarlin Martin predicts Solano rising to the No. 3 spot in rankings by market cap.
“There is going to be some smart people with big wallets who say ‘no way SOL should be below XRP, DOGE, and Cardano projects based on the underlying tech and fundamentals” Martin tweeted. “They are likely going to PUMP SOL into a #3 market cap. $SOL”.