If you only invested $500 in Solana (CCC:LEFT-USDAt the beginning of 2021, you will have approximately $47,500 at the end of the year. You read this correctly – that’s almost 9500% profit.
Having been in the game since 2017, no one would have expected such massive gains for SOL. However, with such huge profits in the past year, many may be wondering if there is any positive side to investing in Solana.
The short answer to that is “Yes!” Any cryptocurrency with a good amount of use cases is likely to be attractive in the long run. Solana was one of the hottest cryptocurrencies in the past year and it will continue its upward trajectory for the foreseeable future.
Solana is a subversive platform that offers its users incredible speeds and solid security. Moreover, its throughput of 60,000 transactions per second is superior to other powerful companies in the space, including Ethereum (CCC:ETH-USD) and even giant payments Visa (New York Stock Exchange:Fifth).
In addition, Solana’s ecosystem use cases extend beyond the financial realm with developments in non-fungible tokens (NFTs), gaming, and decentralized finance (DeFi). Therefore, SOL remains the top bet in the crypto space.
Solve pain points with Solana
Solana excels where most crypto giants have faltered since their inception. The Solana platform boasts incredibly high speeds, low transaction costs, and remarkable energy efficiency. Its throughput far exceeds the blockchain giant Ethereum, which can process only 30 per second. Furthermore, its transaction fee is a fraction of a cent.
One of the main reasons for its speed is that it works on the proof-of-log method, where data is processed in line with timestamps. Accordingly, validators can sort information more efficiently than other block chains.
Solana currently has over 1,000 validators, but by comparison, Ethereum has over 200,000. However, as the size of the platform increases, the number of validators can rapidly multiply over time.
With lower costs and higher speeds, entry barriers for new users are significantly lower. Users can start an account with a small amount of money to purchase NFTs, but the same amount will not nearly cover the energy costs of Ethereum. Moreover, the lower costs leave more room for innovation for developers as well.
Investments pay off
The investments in speed and security seem to be paying off for the Solana-based development teams. The platform now contains more than 350 projects built on the blockchain, ranging from games to finance.
Although this is still far less than projects built on Ethereum, Solana could soon catch up to its rival. It generated a whopping $12.1 million in decentralized applications (dApps) revenue in 2021 alone.
Moreover, Solana killed her in the NFT game as well. From August to November, secondary sales of NFTs reached half a billion dollars. That includes a record month in September, which grossed $189.4 million. Moreover, it has been one of the best block chains in terms of NFT volume in the past few months.
Solana’s growth in dApps and NFTs is just beginning, with an impressive growth path ahead. Its speed, efficiency and low costs will force users to flock to its platform in huge numbers for the foreseeable future. Low-cost blocks like Solana will have the upper hand over their peers — at least, until Ethereum releases its 2.0 update later this year.
Bottom line on Solana
Solana was among the top performing cryptocurrencies in the past year, which gives us a glimpse into its future. Its growth story is just beginning to unfold, with strong fundamentals and a growing list of use cases.
Crypto has emerged as a major player in DeFi and NFT as it continues to improve its platform for its growing user base. Hence, I expect SOL to emerge from its recent downturn and reach new heights in 2022.
As of publication, Muslim Farooque held a long position in Solana and Ethereum. The opinions expressed in this article are those of the author, and are subject to InvestorPlace.com’s posting guidelines.
Farouk Muslim is a keen investor and an optimist at heart. He is an avid player and enthusiast of technology, and has a special penchant for analyzing technology stocks. Muslim holds a Bachelor of Science in Applied Accounting from Oxford Brookes University.