Estimated read time: 4 minutes
Publication date: 19th Oct 2021 11:10 GMT+1
We know that the most popular cryptocurrencies in the world such as Bitcoin and Ethereum have generated exponential gains for long-term investors. You can gain exposure to the disruptive space by purchasing these digital assets on cryptocurrency exchanges such as Coinbase (NASDAQ: COIN) or by adding crypto-mining stocks such as Hive Blockchain to your equity portfolio.
Ethereum which was launched five years back has since returned close to 30,000% to investors in cumulative returns. It means, if you bought $500 worth of Ether tokens soon after its launch, your investment would be worth close to $150,000 today, given the price of Ethereum is close to $3,500, at the time of writing.
But the last decade has seen an explosion of cryptocurrencies and there are over 6,000 digital assets right now. In 2021, Solana has grabbed the attention of crypto experts after it has gained over 6,000% in the last 12-months. According to data from CoinMarketCap, Solana is currently valued at a market cap of $45 billion, making it the seventh-largest cryptocurrency in the world.
So, which between Ethereum and Solana should you look to buy today?
The case for Ethereum
One of the key benefits of the Ethereum blockchain is the inclusion of smart contracts. Ethereum founder Vitalik Buterin realized the importance for a blockchain network backed by a cryptocurrency to execute transactions based on certain conditions. This functionality led to multiple real-world applications across verticals including finance, insurance as well as healthcare.
Ethereum is now the blockchain platform that is used extensively by developers to build dApps as well as other crypto-related projects.
Earlier this year, Elon Musk and several other individuals raised concerns over the massive amount of energy required to power blockchain networks such as Bitcoin and Ethereum. But now Ethereum will transition from a proof-of-work model to a proof-of-stake model which will reduce energy consumption by a significant margin.
Another vertical where Ethereum is gaining traction is the non-fungible token or NFT space. This segment has exploded in 2021 and is primarily powered by Ethereum, again driving widespread adoption of the digital currency.
The case for Solana
Solana is a blockchain network that integrates the proof of stake consensus algorithm with a proof-of-history model. Due to multiple real-world applications, Solana has also attracted investors all across the globe.
One of the key reasons for the astonishing rise in cryptocurrencies over the last 18 months is the accelerated pace of adoption by both individuals and enterprises.
For example, India’s social-media platform Chingari recently raised $19 million from 30 investors. The investment round was led by Republic Crypto and other venture capitalists including 11-11 Ventures, Solana Capital and Kraken Ventures participated in the funding round.
Chingari has close to 30 million monthly active users and is now looking to launch a Solana-based crypto token called $GARI. The funds raised in the investment round will be used to focus on product development as well as launch the $GARI token on the Solana blockchain.
Partnerships like these will continue to expand the Solana ecosystem driving its price higher in the process.
Further, Solana’s network can process 50,000 transactions each second while the Bitcoin network can only support five transactions each second. Each Solana transaction also costs less than $0.01 right now.
One of the world’s leading smart contract networks, Chainlink also integrated with Solana at the start of 2021. A high-growth payments solutions company Circle partnered with Solana last October to facilitate the issue of USD Coin payments. USD Coin is a stablecoin which is pegged to the value of the U.S. dollar. Solana provides Circle an ecosystem of payments and more on its blockchain network.
The final verdict
Cryptocurrencies such as Ethereum and Solana that offer utility are well poised to increase investor wealth. The underlying tech of these digital assets solve real-world issues making them both at an attractive long-term buy.
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
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