There's a lot of debate about how cryptocurrencies add value to the digital world. Is crypto a great store of value? Is it a path to the metaverse? Is crypto disruptive to traditional businesses somehow?
I think a core answer has to be the utility that can be built on the blockchain of a given cryptocurrency. If developers can't build programs and businesses that benefit from the blockchain itself, what advantage does crypto have?
One blockchain that's built for that utility is Solana (CRYPTO: SOL), and it's the one cryptocurrency that I think is a no-brainer right now.
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Solana's blockchain vision
The Solana blockchain uses what's called proof-of-history validation structure for transactions, which is theoretically much faster and cheaper than validation methods like proof-of-work or proof-of-stake.
Actual performance of the Solana blockchain hasn't hit the 50,000 transactions per second or more it can theoretically reach, but the numbers are impressive.
- As of this writing, Solana is completing 3,044 transactions per second compared to 13.3 transaction per second on the Ethereum (CRYPTO: ETH) blockchain.
- Put another way, Solana performed 40 million transactions per day in Q2 2022 compared to 1 million on Ethereum, according to Nansen.
- The average cost of a Solana transaction is just $0.00025.
- There are between 1,000 and 1,200 active programs on Solana on any given day.
- 750,000 wallets are active on Solana, and 100,000 new non-fungible tokens (NFTs) are created every day.
Not every program will be used long term, and not every NFT will be valuable, but the amount of activity and development on Solana is simply astounding.
Development is happening fast
A few of the notable developments happening on Solana just this year include:
- Solana Pay, which was announced earlier this year, is a payment service that could reduce transaction costs of as much as 3% for some credit card purchases to less than a penny. Within hours of launch, developers were already testing the payment network at small businesses.
- In June, Solana Labs announced the Saga smartphone, an Android smartphone that has Web3 features like a "secure element" for private key management. This could be a model for Web3 devices in the future.
- A developer called Coral recently announced a $20 million funding round to build executable NFTs and a "Backpack" wallet, all with the goal of giving NFTs more utility.
Sometimes, the pace of development is dizzying, but that's good for a blockchain and cryptocurrency. And most of the development is geared toward making Solana easier to use, which is what it's going to take to bring on the next generation of crypto users.
Solana is the future of the blockchain
I think cryptocurrency and the blockchain could be very disruptive technologies, but they need to be built for speed, low cost, and ease of use. Solana is the one blockchain that's focused on these factors, and there's rapid innovation in the developer community. That's why this is the best cryptocurrency to buy now, by a long shot.
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Travis Hoium has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
