Is Solana (SOL) a Good Investment in 2023?
Solana is a blockchain platform that has unique technological improvements over other blockchain systems like Ethereum. The Web 3.0 eco-system is expected to benefit from its high performance and distinctive technologies, as well as quicker transactions and cheaper transaction fees.
The blockchain platform is designed to host decentralized and scalable applications.
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Solana (SOL) Overview
| 💱 Cryptocurrency | Solana |
| 💵 Symbol (Ticker) | SOL |
| 💲 Price (USD) | $173.80 |
| 💰 FD Market Cap | $100,907,547,402.52 |
| 💸 Total Supply | 580,595,949 SOL |
| 🚀 All-time high | $260.06 (6 November, 2021) |
| 📉 All-time low | $0.5 (11 May, 2020) |
How much is Solana (SOL) worth?
Currently, Solana is worth $173.80 per SOL, with a fully diluted market cap of $100,907,547,402.52. The total supply of SOL is estimated at around 580,595,949 SOL.
Solana (SOL) reached an all-time high of $260.06 on November 6, 2021, and an all-time low of $0.5 on May 11, 2020.
As of writing, its last 90 days all-time high and all-time low are $25.94 and $16.52, respectively.
What is Solana (SOL)?
Initiated by Russian-born entrepreneur Anatoly Yakovenko, Solana is a public open-source project designed to offer high efficiency and a permissionless blockchain-based platform.
The blockchain project was launched in 2020 by Solana Labs, which was founded by Anatoly Yakovenko and Raj Gokal in 2018. Anatoly Yakovenko has past experience in the field of distributed systems design at Qualcomm, Mesosphere and Dropbox.
Solana claims to be theoretically capable of handling 710,000 transactions per second (TPS) with lower gas fees. It has a block time of 400 milliseconds, whereas Ethereum and Bitcoin have a block time of 10 seconds and 10 minutes, respectively.
During testing, Solana’s high throughput TPS was found to be 65,000 TSP. It is, nevertheless a high-performance blockchain network in the ecosystem with NFTs, DeFi, and Web 3.0 initiatives.
Solana’s efficiency stems from its unique approach, using a proof-of-history (PoH) protocol based on a proof-of-stake (PoS) consensus mechanism. In this, Solana utilizes a distinct time calculation method, enabling lightning-fast transaction processing.
In terms of compatibility with other blockchain networks, Solana uses the Rust programming language, whereas other platforms like Ethereum use Solidity. Solana isn’t compatible with other Ethereum apps, but it has a bridge technology called warm hole to solve that problem.
SOL is Solana’s native token (cryptocurrency) that is used to pay transaction fees and is traded for various purposes.
The journey of Solana (SOL) so far: Highlighting historical and recent events
SOL’s value has fluctuated dramatically in the crypto market since it was introduced in early 2020 at a price of $0.95. Solana achieved an all-time high of $260.06 during the 2021 bull market run.
As the crypto market entered a bear market in 2022, Solana’s value also began to decline.
The major Solana crash was precipitated by the FTX collapse, as FTX held the majority of Solana and the price was heavily manipulated.
However, if we look at the factual stats of Solana’s daily active users and transaction volume, it is still doing well. Though the token’s price is still notably far from its bull market peak, the ecosystem remains active.
They have a more mature technology and developer community than every other blockchain network in the crypto space, making them unique and efficient, and their NFT marketplace has also been doing pretty well.
Cryptocurrency specialists have also given Solana’s environment favorable reviews. Vitalik Buterin, the creator of Ethereum, has also tweeted about Solana’s future.
Is Solana (SOL) a good investment in 2023?
Yes, Solana (SOL) might indeed turn out to be a wise investment in 2023. Any digital asset should be evaluated in light of the company’s objectives and ambitions. If we look at Solana, its movements in the crypto market are appealing.
Before making any investment decisions, crypto traders and investors should keep in mind that they are investing in the betterment of the blockchain system and its consequence on Web 3.0.
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This necessitates them to dive deep into the company’s (developers) work and performance.
However, short term investors/traders may use technical analysis of SOL, which is based on the market movements.
Solana has developed a new technology to boost the cryptographic industry’s effectiveness. The revolutionary technique is Solana’s “proof-of-history” (PoH) mechanism.
The limitation of blockchains like Bitcoin and Ethereum is scalability, which results in fewer transactions per second. Solana addresses this to a greater extent.
The Proof-of-History (POH) mechanism used by Solana is the process where blockchain transactions are time-stamped and verified instantly, whereas the major problem with other blockchain technologies is agreement on time.
Solana is well-known and well-liked in the crypto community. It has been able to become one of the trending crypto coins in the crypto market based on its market capitalization, trading volume, and other factors over time.
Solana has been able to do well over this time despite the general crypto market being in decline and the hype money having vanished. The cryptocurrency’s impressive daily active user and transaction volume metrics justify this.
All of this suggests that Solana could be a good investment. However, there may be certain risks involved with investing in it. They are as follows:
Reasons why investors may not want to invest in Solana
1) Solana is an inflationary cryptocurrency
Solana does not have a set number of coins but instead grows its supply by 8% annually while gradually lowering its inflation rate from 15% to a stable 1.5%. As a result, investors seeking a zero inflation rate in their investments may want to consider alternative cryptocurrencies.
2) Low reliability
Solana could perhaps be less trustworthy for investors because of its lower user base and less established history, as compared to Ethereum.
This means that when making investment decisions, investors should take caution and not rely too largely on the network’s reliability. Because of the network’s smaller user base, any failures with the network could have a higher impact, making it critical to properly examine the risks associated before investing in Solana.
Should I invest in Solana (SOL): Conclusion
If investors want to invest in another smart contract platform besides Ethereum, then Solana can be a good pick as its ecosystem is efficient with fast transaction speeds.
Solana may be a very good investment if you think that the Proof-of-History (PoH) technology it employs is the perfect solution to the blockchain network’s inefficiency. Make sure you fully comprehend the PoH mechanism before making a decision.
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Solana is also working on their core innovations on their blockchain like PoH, Tower BFT, Turbine, Gulf Stream, Sealevel, Cloud break, etc.
You may visit Solana’s official whitepaper to learn more in detail. They have posted their white paper, which contains all of the basic information about the company, its structure, progress, working mechanisms, and roadmap.
Where can I buy Solana (SOL)?
Solana (SOL) is listed on many of the crypto exchanges. The following are the top exchanges where you can buy, sell, and trade Solana (SOL):
Disclaimer: This article solely reflects the opinion and research of the author. Readers should not rely on it as their sole source of information and guidance when making investment decisions. Due to the market’s high volatility and risk, they should do their own thorough research and make the right decisions.
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Crypto market today is very strong and growing rapidly due to more adoption and investor participation. The second US authorities approve the Bitcoin ETF, Ethereum ETF + Interest rate hikes stop in 2024 = this will have an immense global effect on the total crypto market cap and adoption rates. And Solana will play a major role in this growth phase. Solana is not an ETH killer, the two ecosystems will co-exist in harmony. Solana is an amazing blockchain platform which uses a proof-of-stake mechanism to provide smart contract functionality. Solana prioritizes speed and throughput over anything else and the project does claim over 50,000 transactions per second under a fraction of cost. This is immense! These newer projects will help to re-fuel the expected 2025 Bull Run.
If no major economic crisis happens (all else equal) we should see a bull run late 2024/early 2025 lasting to late 2025/early 2026. There is also high probability that there will be additional increase (money printing) in US Dollar volume / money supply increase that will provide an additional power effect the bull run in combination with low interest rates and cheap borrowing. This will be the mega bull ran with potentially the total crypto market cap going over $7-$10 trillion threshold and even surpassing gold at $12 trillion market cap. Overall, Blockchain tech & cryptocurrencies have proven to be revolutionary & disruptive tech and they can bring lots of benefits to the humanity. That’s why blockchain tech & cryptocurrencies will play pivotal role in our future global digital economy.