Investors trust the cryptocurrency market again. After falling in 2022, crypto asset values have soared in the past 15 months. Solana (CRYPTO: SOL) may benefit most from this momentum. In the past year, this cryptocurrency has risen 800%. Investments worth $1,000 now are $9,000. Good luck finding a better asset.
1. Transaction method Solana uses proof-of-stake like Ethereum. This implies token owners validate the blockchain and approve transactions. Solana supports smart contracts. Proof-of-history distinguishes this new cryptocurrency.
This technology modifies how the blockchain records time, minimizing data and speeding up throughput. It explains why Solana can theoretically process 50,000 TPS. That dwarfs Ethereum's 14 TPS and Bitcoin's 5 TPS.
2. Developing use cases A valuable use case has been introduced by Solana's customized infrastructure, which prioritizes speed and affordability. Solana Pay, released in February 2022, may be this network's best app. It connects customers and merchants over the blockchain, processing native token, SOL, or stablecoin transactions. Minimal fees and rapid settlement.
Payment processing is a big expense for companies with thin margins. These retailers can keep more profit with Solana Pay. Additionally, blockchains allow for additional functionality. Retailers can include a receipt-like non-fungible token (NFT) with each purchase. The merchant's NFT could give future discounts or access to special events. This is thrilling because of customer engagement.
Solana also does mobile. Saga, a web3-enabled smartphone, debuted in summer 2022. This product aims to attract more crypto users by making decentralized app interaction easy. A second, cheaper smartphone has been released. It's encouraging to see a successful cryptocurrency like this try to make Solana more useful, moving it from financial speculation to daily use. Time will tell if these measures succeed.
3. Investor enthusiasm is high Cryptocurrency investors must understand the industry's boom-and-bust cycle. Short-term price changes tend to be driven by narratives. This will keep things turbulent for a while.
Solana is worth $77 billion, comparable to Ferrari, MercadoLibre, and PayPal. Maybe this is justified, but it probably bakes in a lot of optimism about Solana's future. One thing is certain: long-term uncertainty remains. You now know more about this rising cryptocurrency. But before buying, consider Solana's possibilities for the next decade and beyond. If so, consider starting a small position in this digital asset now.
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