Cryptocurrency adoption has been on the rise since its inception. But it was not until the year 2020 that the industry was able to show its true potential. As the pandemic disrupted almost every industry, including finance and banking, the crypto and blockchain industry flourished and helped many investors generate huge profits. Currently, there are over 10,000 cryptocurrencies in the market, offering various facilities for transactions and payments. Among these is Solana, one of the best-performing cryptocurrencies in 2021. SOL has dominated the market throughout August 2021 and is currently standing as the fifth-largest cryptocurrency in the market, with a capitalization of US$54.741 billion, according to coinmarketcap.
Solana's rapid growth in 2021 has shocked everyone in the industry. The promising cryptocurrency is also known to be one of Ethereum's biggest rivals, and it has certainly lived up to its hype. The SOL community of investors considers the crypto to be a revisionist in the blockchain community. Besides, market experts believe that Solana's growth is just in its nascent stage, and there are several innovations that are yet to take place.
SOL's performance this year should be an indication that the crypto has a strong future. Even though it was launched in 2019, the crypto has exponentially grown in the next two years. SOL started with US$1.50 at the beginning of 2021 and crossed as high as US$180.
Most long-term crypto investors look for projects on the network that can be useful in the future. SOL has over 400 projects on its blockchain network, most of them with NFTs and decentralized applications. Even though it is far short of Ethereum that has over 3000 projects on its network, Solana's growing popularity will soon give a strong competition this aspect as well.
One of the main reasons behind SOL's exponential growth is the spike in investors' interests in Ether's competitor platforms concerning DeFi, NFT, and smart contract offerings. SOL's DeFi projects crossed US$3 billion in September 2021, which is another milestone indicating the crypto's ability to grow and give competition to Ethereum.
Another reason for Solana's success is its speed and efficiency. It is the fastest blockchain in the market that presently conducts 3000 transactions per second but has the capacity to handle up to 65,000 per second. Whereas ETH can handle only 15 to 45 transactions per second, although investors have high hopes for the ETH 2.0 upgrade, which is supposed to be faster. Solana also provides a much cheaper transaction fee as compared to Ethereum.
Several cryptocurrency companies have been contemplating integrating AI systems in the blockchain network to boost the crypto's performance. Artificial intelligence and blockchain are two of the fastest-growing technologies in 2021. With the implementation of AI, blockchain can become much safer by making sure of secure application deployment. AI algorithms can make faster financial transactions and block fraudulent practitioners.
AI can help minimize and eradicate the carbon footprint of blockchain technology, which will also reduce the cost applied to crypto mining and spend the energy on AI machines to perform the work of the crypto miners automatically.
Recently, there have been talks about implementing AI on the Solana blockchain and making it 100% AI-proof. This endeavor aims to automate transactions on Solana at a higher level than it was ever envisioned before. AI will not only simplify the trading process of Solana, but this might also be the reason behind Solana hitting new highs in 2022.
Even though there will be several more innovations concerning AI and blockchain, experts believe that these domains are still unaccounted for, so investors should still be mindful of the risks that are involved in the market.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.