Ethereum vs Solana: which one is a better investment?

Ethereum and Solana have many similar features, and when it comes to choosing one over another, it might be difficult for an investor to make the best decision. That’s because both blockchains provide excellent applications and ecosystems and are famous and secure assets in a portfolio. 

However, many differences put Solana ahead of Ethereum. One key aspect is the ETH price, which can fluctuate quite often, but at least since the last update called the Merge, Ethereum’s prices have stabilized. We can say that this cryptocurrency is going towards a pleasant direction for investors. At the same time, Solana’s blockchain qualities might not be as developed as Ethereum’s, given that the network has suffered constant and significant changes since its market release. 

Regardless, both cryptocurrencies and blockchains have something special but are oftentimes compared. Today, we’ll find out which one is a better investment. 

Ethereum vs Solana: which one is a better investment?

What is Ethereum?

Ethereum was released in 2015 by Vitalik Buterin. The creator aimed to make something similar to Bitcoin regarding transactional features, but the blockchain was planned to be something more memorable. The native cryptocurrency is called Ether (ETH) and can be used for many types of external or internal transactions. Although the price rarely suffered significant changes, the blockchain was always appreciated and used by developers and investors to create different applications and leverage benefits.

Among some of the best things you can do on Ethereum’s blockchain are using smart contracts to create DApps, and DAOs and develop, sell and buy NFTs. Ethereum is used primarily for Web3 applications which have increased its popularity.

After the latest updates, Ethereum has become more sustainable through its recent change to a proof-of-stake consensus mechanism. However, many other upgrades are expected in 2023 and beyond to make the network more scalable and lower gas fees.

What is Solana?

Solana was made public in 2017, shortly after Ethereum. The cryptocurrency’s white paper was created by Anatoly Yakovenko and was intended to release a fast, efficient and affordable token while maintaining a decentralized approach. Solana’s native cryptocurrency is SOL and is used for paying fees and staking. Solana has a low market cap since it’s relatively new to the market, but it’s still among the top 10 cryptocurrencies by market cap.

Solana blockchain is a great ecosystem for executing smart contracts, powering up NFTs and creating digital apps. But what makes Solana unique is its DeFi features that allow developers to develop permissionless payment applications. At the same time, Solana’s proof-of-history approach eliminated the ability to reorder transactions, leading to a censorship-resistant network.

Key differences

As you can see, Ethereum and Solana are both significant cryptocurrencies, but what differs them include the following:

  • Market cap. Ethereum has a higher market cap given that it’s the second-most-popular cryptocurrency, while Solana is far behind with its low market cap;
  • Technology. Ethereum has worked towards a sustainable blockchain, while Solana is fast and innovative;
  • Pricing. Ethereum is by far more expensive to get and maintain, but Solana is widely accessible;
  • Transactions fees. Again, Ethereum has higher costs due to its volatility, while Solana is more consistent;
  • Programming language. While Ethereum uses Solidity and other complex languages, Solana’s programming language is C, C++ and Rust;

Why choose Ethereum?

There are many reasons why you would choose to invest in Ethereum. For example, you might want to buy ETH due to the blockchain’s popularity and users. Therefore, you’ll always find solutions and support on the Ethereum blockchain as well as knowledge and applications to help you diversify your portfolio.

At the same time, the recent technology improvements showed that Ethereum is a reliable source of investment because all users will eventually get better features and work towards an improved ecosystem. And since it’s expected that after these upcoming updates, Ethereum will become more accessible and cheaper, it’s a great time to start investing.

Why choose Solana?

Solana also has excellent features. However, since it’s a newer and less volatile cryptocurrency, it might be fitter for beginners. That’s because, at least for a while, it won’t fluctuate as much as Ethereum, and the blockchain offers similar applications.

The innovative technology and faster transaction fees might lure you into choosing Solana, as the cryptocurrency is driven by PoH, which builds time stamps into the blockchain so that the network can operate faster. Finally, the lower fees and pricing are better for a first-time investor. Still, Solana is an excellent choice for anyone because it’s a stable asset that can bring much value to a portfolio.

Other aspects to consider when choosing what to invest into

Whether you choose to invest in Ethereum, Solana, or both, it’s best to know the risks and understand what you should expect. To wrap it up, if you invest in Ethereum, you may be prone to certain risks because the cryptocurrency is quite unstable. However, the blockchain is highly reliable and provides qualitative applications and systems.

On the other hand, Solana is a more settled cryptocurrency. And even if it can’t provide the same high returns as Ethereum, owning SOL is an excellent strategy for ensuring your portfolio is safe. Solana is still developing but has enough potential to overcome Ethereum in a few years if it becomes more popular.

Finally, learning about a cryptocurrency’s utility will help you make the right decision. Both Ethereum and Solana are great for transactions, investments and technological advancements, but not all their features might fit your current financial situation. Depending on what you want to do with these cryptocurrencies, it’s best to engage with time little by little and not be distracted by other people’s goals.

Bottom line

Ethereum, the second most known cryptocurrency ever, competes with Solana, a smaller but efficient cryptocurrency. Although both of them are reliable and consist of excellent applications, ecosystems and knowledge, Ethereum is considered to be pricier than Solana. However, as Solana is less known, it has fallen into the pit of darkness where cryptocurrencies usually get. But with a bit of work, Solana can outshine Ethereum.


I am Finance Content Writer . I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. Linkedin

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