Ethereum (CRYPTO: ETH) It has been one of the strongest investments of 2021, its price has soared by more than 437% since the beginning of the year. However, it is also one of the most expensive cryptocurrencies, priced at just under $ 4,000 per token.
As Ethereum continues to grow, it will only get more expensive. If you are looking for a more affordable investment that has similar growth potential, there is another cryptocurrency to consider: Solarium (CRYPTO: SOL).
Solana is one of the rising stars of the crypto world, and while it has its downsides, it could be the Ethereum of 2022.
Why invest in Solana right now?
Solana is currently the fifth most popular cryptocurrency, with a market capitalization of more than $ 52 billion. (For reference, Ethereum currently has a market capitalization of over $ 452 billion.) This puts it in a good position as it has gained enough traction to compete with the biggest players in the crypto market, but it still has plenty of room to grow.
It also shares many similarities with Ethereum. Both networks are smart contract platforms that can host projects such as decentralized financial applications and non-fungible token markets (NFTs).
However, Solana has a huge advantage over Ethereum: speed. Ethereum can currently process around 15 transactions per second, while Solana can reportedly handle up to 65,000 transactions per second. Due to this speed, many developers have flocked to the Solana network, making it the fastest growing blockchain ecosystem.
Risks to consider
While Solana may be one of the most promising cryptocurrencies of 2021, it is not without risk. Some critics argue that Solana has placed more emphasis on speed than security, and has experienced multiple attacks that have caused security problems.
Most recently, the network was hit by a distributed denial of service (DDoS) attack. While Solana stayed online, the attack shook investor confidence. Its price fell more than 20% in the days after the incident, and is currently down almost 30% from its peak in November. This is not the first time that Solana has suffered an attack, as the network went offline for about 17 hours in September.
Some experts are also concerned that security concerns remain an issue for Solana. According to a recent report by institutional investment firm Grayscale, Solana uses a consensus mechanism that is not widely used by other cryptocurrencies. It uses a history testing protocol, which is more efficient than other systems, but may not be as secure. This means that Solana could be more vulnerable to attack than other networks.
Is Solana a good investment?
Despite its recent volatility, Solana remains one of the most popular cryptocurrencies and its price has soared by more than 11,600% since the beginning of the year.
Solana’s ultra-fast speed gives it a huge advantage over its competitors, and as a result, more developers are switching from Ethereum to Solana. However, your safety concerns are worrisome. The network could become an even bigger target for attacks as it expands, so Solana will have to work hard to prevent further incidents.
It is not known whether Solana will be successful in the long term. So far, the cryptocurrency has managed to recover from the difficulties, which could make it a promising investment in the long term. But security concerns could dampen investor enthusiasm, so it’s unclear if it continues to grow over time.
If you choose to invest, make sure you are willing to hold your investment for the long term. Like all cryptocurrencies, Solana will likely face even more volatility in 2022. However, if it manages to overcome its security problems, it could be a strong competitor in the cryptocurrency market.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are variegated! Questioning an investment thesis, even one of our own, helps all of us think critically about investing and make decisions that help us be smarter, happier, and wealthier.