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Understanding the differences between Solana (SOL) vs Ethereum (ETH) can help you to improve your trading results and overall market comprehension. Both of these projects provide Dapp developers with flexible programming environments to create applications and tokens. However, there are some glaring differences between the projects when you dive deeper.
What is Solana (SOL)?
Solana was built to improve on many of the shortcomings of Ethereum. The network focuses on scalability and transaction throughput. As such, its regarded as a high-performance blockchain. It uses a unique multi-layered consensus structure to eliminate bottlenecks and centralization.
One of the main advantages that Solana brings to the market is that it automates the transaction ordering process for blockchains. This is how the protocol is able to achieve such high tps rates. Additionally, the Solana project is open source, so third-party developers can build using the platform’s infrastructure.
What is Ethereum (ETH)?
Ethereum is one of the pioneers of the cryptomarket. As the first second-generation cryptocurrency, Ethereum changed the market forever. Notably, Ethereum was the first smart contract programmable blockchain. Smart contracts improved the functionality of blockchain networks exponentially. Today, it would be hard to imagine a blockchain industry without smart contracts.
Ethereum operates as the world’s largest Dapp and DeFi ecosystem. It’s also the second-largest PoW network in the world. Notably, Ethereum is not a cryptocurrency but is often confused with its utility token Ether (ETH) which is used to fuel network transactions and smart contract executions. Ethereum is the blockchain that supports these EVM (Ethereum Virtual Machine) computations.
Solana launched during the height of the 2017 crypto breakout. The network was founded by Anatoly Yakovenko. The Solana team includes some notable tech execs. For example, Greg Fitzgerald, Solana’s CTO, worked for Qualcomm, Dropbox, and other well-known platforms.
Over the course of 2018-2019, Solana hosted a variety of crowdfunding and private funding rounds. These efforts resulted in the network securing +$20 million to expand the ecosystem. The Solana mainnet went live officially in March 2020. The launch was quickly followed by a partnership with the DEX (decentralized exchange) Serum.
Ethereum launched when the cryptomarket was still just taking flight in 2013. The project’s founder, Vitalik Buterin, had been a long-time Bitcoiner. He saw the potential of enabling protocols to function across decentralized networks and he want to simplify the process of accomplishing this task.
The hype surrounding Ethereum’s launch was memorable. The project hosted one of the largest ICOs (initial coin offerings) of the time when it secured $18 million in funding from +11,000 investors. This moment would be the start of Ethereum’s rise to power. Only 4 years later, Ethereum would launch the 2017 ICO craze when it introduces the ERC-20 token standard to the market.
Solana was built to support advanced Dapps. The network’s developers made scalability the premier focus of the project. Every aspect of the network has been optimized to improve responsiveness and throughput. In this way, developers can create more expansive Dapps and conduct larger computations with lower fees using Solana.
One of the most unique aspects of Solana is its multi-layered consensus system. The network leverages a Proof-of-Stake (PoS) system to validate the state of the blockchain. This system enables users to earn rewards for participating as validators. Validators are chosen using a combination of random selection amongst the top token holders.
This system is then layered with a Proof of History (POH) mechanism that leverages a timestamp system to improve performance further. The timestamp functions as a clock for blockchain events. This timing sequence adds more security to the entire system as it makes it even harder for hackers to alter data.
Ethereum utilizes a Proof-of-Work (PoW) system known as the Ethash algorithm. This system is similar to Bitcoin in that network nodes compete to add blocks to the ledger. Notably, Buterin felt that it would be wise to create a new algorithm to prevent the centralization that was occurring in the Bitcoin mining sector at the time. At first, this strategy worked great because it reduced the number of ASIC miners on the network. However, it wasn’t long before Ethereum ASIC chips hit the market. Notably, around 18 million ETH are mined yearly.
Interestingly, Ethereum is in the midst of a major overhaul. The network will upgrade its consensus mechanism to a Proof-of-Stake system in the coming months. The protocol is in the middle of the conversion with ETH 2.0 Validators already staking their coins. To qualify as an Ethereum validator you need to stake 32 ETH or join a staking pool.
Solana is one of the fastest blockchains in the market. The protocol has been bench tested up to 29,171 tps (transactions per second). Solana’s network processes block every 2.34 seconds. In comparison, Ethereum is sitting at around 15-transactions per second. Ethereum confirms one block approximately every 13 seconds.
SOL is the native token for the Solana network. You can stake the token and earn passive rewards. There are 489 SOL scheduled for issuance throughout the entire life of the Solana network. This scarcity has helped Solana to provide users with a dependable store of value to HODL.
Ether (ETH) is the native token of the Ethereum protocol. The main purpose of this token is to power EVM computations. ETH is the most widely used token in the crypto market. You can use ETH to participate in most ICOs and nearly every exchange supports the coin. Notably, the token has an unlimited supply to ensure that EVM instances can always operate.
How to Buy Solana (SOL) and Ethereum (ETH)
Currently, Solana (SOL) and Ethereum (ETH) are each available for purchase on the following exchanges.
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommend exchange for USA residents. (Excluding New York & Washington state)
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Assets available on Uphold are subject to region. All investments and trading are risky and may result in the loss of capital. Cryptoassets are largely unregulated and are therefore not subject to protection.
Binance – Best for Australia, Canada, Singapore, UK and most of the world. USA residents are prohibited from purchasing most tokens. Use Discount Code: EE59L0QP for 10% cashback off all trading fees.
KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens. It is often the first to offer buying opportunities for new tokens. This exchange currently accepts International & United States residents.
Solana Vs. Ethereum – Speed vs Experience
Both Solana and Ethereum are well-respected blockchains within the market. Solana’s development team accomplished their task of creating a fast and reliable blockchain that could power thousands more transactions than Ethereum. Reversely, Ethereum is still the top-performing network in the market with no signs of slowing. For these reasons, it could be wise to hold both of these tokens in your portfolio.
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