Two blockchains that have emerged as possible alternatives to Ethereum are Solana and Avalanche. While much smaller in market cap compared to Ethereum, these newer platforms offer the functionality of Ethereum but with faster speeds and significantly lower transaction costs. Often referred to by crypto experts as “Ethereum killers,” Solana and Avalanche have promising prospects for both developers and investors. But before we assess which is the better alternative to Ethereum, let’s take a closer look at the two crypto blockchains, as well as how to buy their coins.
What is Solana?
Solana, which was created in 2017, is a “Layer 1,” open-source blockchain that supports smart contracts, including non-fungible tokens (NFTs) and a variety of decentralized applications (dApps). For that reason, Solana is considered one of the strongest challengers to Ethereum, which has similar capabilities. (Layer 1 refers to a base network, such as Bitcoin or Ethereum, and its underlying infrastructure.)
“Solana’s purpose is to compete directly with Ethereum both on faster transaction processing speeds and fees,” says Michael Zagari, an investment advisor at Mandeville Private Client and Zagari+Simpson, adding that “Solana aims to compete with Visa and Mastercard on the same comparisons.”
Currently, Ethereum supports around 15 to 25 transactions per second, which can cause delays and congestion in the network. To put that into perspective, Visa processes 1,700 transactions per second, and Mastercard 5,000. However, both these networks also charge fees and interest to their users and operators.
Blockchains use “consensus models” to verify transactions. Solana runs on an innovative hybrid consensus model comprising proof-of-stake (PoS) and proof-of-history (PoH), a proof for verifying order and passage of time between events. Due to this unique protocol design, Solana can handle up to 3,000 transactions per second.
With faster transaction speeds and low costs, Solana has “an opportunity to lure developers to their own individual network,” says Zagari.
Solana’s native currency, SOL, ranks ninth on the crypto coin chart, with a market cap of nearly $15 billion (all figures in U.S. dollars, unless otherwise noted), as of late September 2022. SOL traded at over $178 at the start of the year, but has fallen to about $31, dragged down by a broader market decline. At the time of writing, there were about 354 million SOL tokens in circulation. (Read more about Solana.)
What is Avalanche?
Another Ethereum challenger, Avalanche is a proof-of-stake blockchain that hosts decentralized applications and custom blockchain networks. It’s also one of the fastest smart contract platforms. Avalanche is run by Ava Labs, which was founded in 2018.