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Is Solana the next Bitcoin?

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Is Solana the next Bitcoin?

There may never be a cryptocurrency like Bitcoin (BTC -0.83%). Since its inception in 2013, Bitcoin has returned an incredible 22,279.89%. And it may not be done yet, with some analysts predicting that Bitcoin could eventually hit $1 million by 2030. That would be a more than 40x gain from the current price of $24,000.

That said, Solana (FLOOR -1.52%) has the potential to be the next bitcoin. Since its public launch in 2020, the token has grown an incredible 3,260%. In 2021, Solana was one of the hottest cryptocurrencies of the year. But will it ever become an iconic cryptocurrency found in almost every investor’s crypto wallet, just like Bitcoin?

What is the unbeatable value proposition?

Like any good investment, Solana needs a clear value proposition to attract as many investors as possible. Right now, the investment thesis around Solana is that it’s a cheaper, faster, and better alternative to Ethereum (ETH -0.72%), which is the #2 crypto in the world by market capitalization. Solana is a pure proof-of-stake blockchain capable of processing over 65,000 transactions per second with near-zero fees, while Ethereum can only process around 15 transactions per second with high transaction fees.

Person being covered in confetti outdoors.

Image source: Getty Images.

For this reason, users and developers have started coalescing around the Solana ecosystem. It’s just cheaper and more efficient to do just about anything on Solana than on Ethereum. This is why media analysts have called Solana an “Ethereum killer”. Even after Ethereum completes its highly anticipated merger and attempts to adopt a proof-of-stake system, Solana will still have a superior technology platform to Ethereum.

However, for Solana to become the next Bitcoin, it will need an even stronger value proposition. Bitcoin, for example, is “digital gold”. This concept is so simple to understand that it has motivated even the youngest crypto investors to buy and HODL (crypto lingo for “hold”) for the long haul. Ethereum has been said to be “digital oil”. It is also a remarkably simple and effective way to describe why Ethereum is so important to the crypto world. So what is Solana? Here’s an idea: Solana is “the digital sun”.

Where are the Solana supporters?

Another distinctive feature of Bitcoin is the presence of a cult following. Every time the token drops, fans urge Bitcoin supporters to “buy the dip.” Whenever people ask them where the Bitcoin price is going, they confidently answer “to the moon”. This kind of incredible optimism about the future is something Solana will need to capture and hold onto if he ever hopes to become the next Bitcoin, because it’s what will help him bounce back from tough market conditions. Just as there are Bitcoin maximalists (people who believe Bitcoin is the end and essence of crypto) and Ethereum maximalists, there must also be Solana maximalists.

And there are already signs of the emergence of these super Solana supporters. In 2021, for example, Solana supporters tried to score all summer long as “Solana’s Summer.” Or, take Solana’s recent launch of a real-life (IRL) retail store experience called Solana Spaces in central New York. In many ways, Solana Spaces looks and feels like a Apple Store and this is a first in the blockchain world. So if Solana ever becomes a crypto brand modeled after a tech brand like Apple, watch out.

What’s the killer app?

Finally, to become the next Bitcoin, Solana must develop a “killer app” that will set it apart from all other blockchain projects. In the tech world, a killer app is the only product or service that convinces users, developers, and tech entrepreneurs to adopt a particular company. Currently, the most likely choice for a Solana killer app involves non-fungible tokens (NFTs) or digital representations of ownership of art, video, and other media. Since mid-April, Solana’s NFTs have been a hot topic of conversation. This is when the most popular NFT marketplace, OpenSea, started listing Solana NFTs. But the killer app could also be a new game, a new metaverse creation, or a new decentralized finance (DeFi) offering.

Move over, Bitcoin – here comes Solana

Obviously, a lot of things have to go right for Solana to become the next Bitcoin. However, based on what has already gone well for Solana over the past two years, there are reasons to be optimistic about his future.

Dominique Basulto has positions in Bitcoin and Ethereum. The Motley Fool holds positions and endorses Apple, Bitcoin, Ethereum, and Solana. The Motley Fool recommends the following options: long calls $120 in March 2023 on Apple and short calls $130 in March 2023 on Apple. The Motley Fool has a disclosure policy.

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