Solana or Ethereum：Which is The Better Smart Contract Platform？

[TL; DR]

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Solana is a decentralized and open-source digital asset that powers decentralized apps (Dapps). It is also used for transactions and exchange via blockchain technology.

Ethereum is also a decentralized blockchain with a platform for transactions and other online functions.

The cryptocurrency or token on Solana and Ethereum are SOL and ETH, respectively.

Ethereum uses the proof-of-work mechanism, while Solana uses the proof-of-history mechanism.

Both currencies have several similarities and are worth investing in.


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Blockchain is the sophisticated and versatile technology that enables you to authenticate and make transactions using your digital asset. It is a safer and faster platform than more traditional ways of doing things.

Some examples of blockchain are Bitcoin, Litecoin, Solana, Ethereum, etc., most of which have their cryptocurrencies. For this article, we will be dealing with Solana and Ethereum, and let's take a look at both of them.

What is Solana?

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Solana is a decentralized and open-source blockchain that allows you to make transactions and transfer its value from one wallet to another.

Solana blockchain transacts and exchanges with the SOL token.

Solana was launched in 2017 by Anatoly Yakovenko and Raj Gokal. Yakovenko and Gokal remain the Solana Lab's CEO and Chief operations officer, respectively.

Solana came into the DeFi (Decentralized financial institution) market and became the toast of many due to its fast processing speed.

The digital asset boasts of a whooping 650,000 theoretical transactions per second.

While experts believe that the transaction speed and no gas fee come at a decentralized price, Solana has continued to serve as a close substitute to Ethereum, which has high gas fees. Especially in DeFi and NFT spaces.

What is Ethereum?

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Ethereum is a decentralized and open-source blockchain. Ethereum allows you to make transactions and exchange the Ether token for other valuables on the blockchain network.

Ether (ETH) is the cryptocurrency or trading unit of ethereum.

Ethereum comes second after Bitcoin in market caps in the digital asset space.

The idea to have a cryptocurrency to serve as a substitute to Bitcoin was conceived by Vitalik Buterin in 2013.

Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin eventually came together with Vitalik Buterin, and Ethereum went live in July 2015.


Some people consider Solana a close substitute to Ethereum, while others think they are close competitors. At this juncture, it is essential to point out their similarities to determine whether they are competitors or close substitutes.

Solana and Ethereum are two different decentralized blockchains. Asides from the fact that both are tokens of exchange in cryptocurrency and are fungible digital assets, they both have other decentralized apps on the blockchain networks.

Now that we have ascertained how both platforms are similar let's look at what distinguishes them and deduce the better smart contract platform.

Solana or Ethereum: Which is the better smart contract platform?

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Day by day, the cryptocurrency market continues to widen. New investors are springing up day by day, searching for the best blockchain platform to invest in.

These digital assets are numerous, making it hard to determine which is the better smart contract platform.

To make it easier to decide which is the better smart contract platform among Ethereum and Solana, you can consider the following smart metrics:

The consensus mechanism and technology

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Ethereum and Solana do not utilize the exact mechanism, and Ethereum currently uses the Proof of work mechanism instead of Solana, which uses the Proof of history mechanism.

Understanding these mechanisms will give investors insight into how these digital assets function. These mechanisms that verify blockchain transactions determine how secure and decentralized the transactions will be.

Ethereum utilizes the Proof of Work mechanism, and PoW uses miners to create blocks and then verify them before the chains of transactions are made. Building blocks are energy-intensive and charge high gas fees, and it lacks scalability and is relatively slow.

However, Ethereum developers are already working on an Ethereum 2.0 that uses the Proof of stake protocol. It is believed that PoS will correct all the anomalies from the previous version.

Solana, on the other hand, utilizes Proof of history. The Proof of history protocol uses nodes to record the passage of time and activity, and PoH protocol creates their internal clock that monitors transactions on the blocks". PoH has higher scalability and faster transaction speed.

Their speed level

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At the moment, Solana can process about 50,000 (TPS) transactions per second compared to Ethereum, which processes about 15 (TPS) transactions per second.

This is a massive gap between the two blockchain platforms, and the faster the transaction speed, the lower the gas fee.

However, it is believed that when Ethereum 2.0 becomes fully functional, the upgraded version will process about 100,000 transactions per second.

Market capitalization and popularity

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The popularity and acceptance of a digital asset in the cryptocurrency market will determine its market carpet.

The market cap of ethereum is $497 billion, while Solana stands at $56 billion. This shows a massive gap between the two market caps.

On the ranking list, Ethereum comes second, while Solana is ranked tenth. This shows that ethereum is quite popular and widely accepted compared to Solana.

Conclusion

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Ethereum and Solana are two different blockchain platforms that have been doing well since their launch.

Ethereum comes close to Bitcoin, the primary digital asset on the blockchain network.

Experts believe that Ethereum has paid its dues and garnered dedicated investors over the years. These experts also believe that Solana is a “new kid on the block” and needs some time before competing with the likes of ethereum, even though it has faster transaction speed and high scalability.

As a potential investor looking for a better smart contract platform, it is advisable to invest in Ethereum. By 2022-2024, the upgraded version 2.0 will be fully functional, and it comes with faster transaction speed and less gas fee.



Author: Valentine. A Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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