I Persist in My Decision to Shed Ethereum for Solana, Citing These 3 Justifications
Two years ago, I pretty much ditched the majority of my Ethereum (ETH: 4.93%) and plunged even deeper into Solana (SOL: -1.52%). And despite the raised eyebrows from seasoned crypto investors, I'd make that same call today. Let me explain why.
1. Gas fees
Gas fees on cryptocurrency networks are an inevitable fact of life. But if you've ever dealt with Ethereum's sky-high fees, you know why I felt relieved to part ways with it. As of Jan 16, the average Ethereum transaction fee lands between $0.45 and $0.60. But during peek periods in 2024-Q5, you could pay over $30 just to transact, and the cost for a non-fungible token (NFT) transaction rings in at around $12.50.
Now, imagine if your stock broker charged you $30 to buy or sell shares, regardless of the number of shares involved. It sounds absurd, but it's not too farfetched when talking about Ethereum.
Luckily, Solana's fees are a complete contrast. Typically, you'd cough up only a fraction of a cent for a transaction. Even during network overloads, Solana's fees barely exceed $0.05.
Gas fees might not be a direct financial concern for individual investors due to limited trading activity. But for the frequent traders and high-volume investors, Solana's cheaper fees could be a significant boost to their portfolios, leading to higher demand.
2. Transaction speed
Transaction speed is another area where Solana shines. Don't expect your Ethereum transaction to go through in a blink of an eye - transactions take anywhere from 10 seconds to five minutes to process, and the network processes only up to 30 transactions per second (TPS) at a time.
Compared to Solana, which whizzes through transactions in about 400 milliseconds and boasts a throughput of approximately 65,000 TPS under normal operations.
While the difference in speeds might not affect individual investors much, it does present a substantial advantage for higher-volume traders and developers who require swift transactions to function effectively.
3. Ecosystem
A user-friendly ecosystem is another compelling reason why I don't regret my decision to ditch Ethereum. The Solana ecosystem boasts an array of easy-to-use products and services that rival Ethereum's offerings in speed, efficiency, and overall user experience.
Let's take digital wallets, for example. While Ethereum has numerous wallet options, Solana's flagship wallet, Phantom, stands out for its simplicity and easy setup process. Similarly, popular NFT marketplaces, like OpenSea, might still favor Ethereum, yet Solana's platforms provide a smoother user experience by connecting wallets seamlessly and with lower transaction costs.
In summary, Solana offers users a faster, cheaper, and more accessible cryptocurrency experience compared to Ethereum. These advantages have played a significant role in attracting a growing number of developers, traders, and users to its ecosystem, which could potentially fuel long-term demand for Solana and its associated projects.
Given my preference for faster and more cost-effective transactions, I decided to shift a part of my finance portfolio from Ethereum to Solana. This move allowed me to reduce the impact of high gas fees on my investing strategy, which can be particularly burdensome for frequent traders and high-volume investors.
The lower transaction fees in Solana's ecosystem can significantly boost portfolios over time due to reduced transaction costs, which can lead to higher returns on investment.
