For Bank of America, Solana can become the new Visa for cryptocurrencies

Solana Visa

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Bank of America analyst Alkesh Shah released a research article comparing the rapid development of the Solana network versus Ethereum and highlighted its future potential.

Bank of America claimed that Solana (SOL) can become the new Visa of the crypto world, above Ethereum.

“Solana could become the Visa of the digital asset ecosystem,” Bank of America’s global crypto and digital asset strategist Alkesh Shah wrote in a research note. He cited the more than 400 decentralized applications on Solana’s network, hosting everything from peer-to-peer exchanges to NFT markets.

Among the most praised qualities of this network is the high speed of its transactions, compared to Ethereum, let alone the bitcoin blockchain. For Alkesh Shah, digital asset strategist at the investment bank, “its ability to provide high performance, low cost and ease of use creates a blockchain optimized for consumer use cases such as micropayments, DeFi, NFTs, decentralized networks ( Web3) and games”.

Among the expert’s conclusions, he highlights that Solana is taking a slice of Ethereum’s market share due to its low fees, ease of use, and scalability. Ethereum, on the other hand, is optimal for “high-value transaction and identity, storage, and supply chain use cases.”

“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are sometimes higher than the value of the transaction being sent,” says the expert. by BofA.

Visa processes an average of 1,700 transactions per second (TPS), but the network can theoretically handle at least 24,000 TPS. Ethereum currently handles about 12 TPS on the mainnet (more on layer two), while Solana boasts a theoretical limit of 65,000 TPS.

Shah admits that “Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by various network performance issues since its inception.”

The Solana network launched in 2020, and has since grown to become the fifth largest cryptocurrency with a market capitalization of $47 billion. An order of magnitude faster than Ethereum, it has been used to settle over 50 billion transactions and mint over 5.7 million non-fungible tokens (NFTs).