Is Solana cryptocurrency a better investment than Ethereum?

I think Solana (SOL) is a better trade but it’s not clear yet whether it’s a better long-term investment than Ethereum (ETH). I own both though, and I’ll explain why I think Ethereum might have the better long-term edge in three points.

#1 The Technology
Both of these cryptocurrencies are competition to be the world’s top platform tokens—the equivalent of iPhone and Android for smartphones. The tech they offer is basically a global computer that allows other applications to run on them (just forget about the idea of being like currencies, they are nothing like Bitcoin).
Like any computer, then, you’d be interested to know how fast they are, because meaningfully faster technology will win the market.
Right now the Ethereum network does about 15 transactions per second (TPS) while Solana can do 50,000.
You can verify real-time how many TPS Solana is doing here
. They are mostly doing about 1500, given present demand, but that’s still 100x Ethereum.
The average cost for an Ethereum transaction is about $7.9
 while for Solana it is about $.00001
.Ethereum has a roadmap for developing its transaction speed with ETH 2.0 by 2022, and in a couple of weeks, their London hard fork will put a cap on really high transaction costs.
So, while Ethereum is trying to get up to the speed and down to the cost of Solana, there is about a 1-year window where Solana could take Ethereum’s market share.
That, of course, brings us to the actual functioning of the networks.

#2 Decentralization and Adoption
Presently, Solana only has 608 validators and 47 decentralized applications (D’Apps) running on its network.
By contrast, Ethereum has more than 33,700 validators and more than 3000 decentralized applications (D’Apps) running on its network.

Decentralization matters because a highly concentrated group of power allows for massive manipulation. Right now, it would take only a majority of those 608 people to ruin the entire SOL network and run away with the money.

Solana is working hard to get more applications on its network, but their efforts do not compare with Ethereum’s achievements. Would you rather have a phone with only 47 apps or one with 3000?

You probably couldn’t even do what you wanted with those 47 apps, and so would be forced to use the older model that at least had the apps you wanted. That’s where the crypto community is presently.

#3 Community
The capital question for Solana, then, doesn’t turn on its technological advantage. It turns on Solana’s ability to recruit more developers (first) and then more users for their apps.
Remember, Ethereum will reach relative tech parity with Solana in about a year, so if you think SOL is going to win, it has only a few months to do it.
If you head on over to SOL’s community section, you’ll see that they are active in a lot of spaces. But to put those numbers in perspective, here are their relative followings on Reddit.

• Solana: 26k subscribers
• Ethereum: 1 million subscribers

Yes, Reddit is only one platform, but it illustrates the discrepancy in adoption rates. Ethereum’s community is huge relative to Solana.
To make up for this gap, SOL just closed out another round of fundraising for $314 million. They will use a fair bit of that funding to promote adoption.

Concluding Thoughts
I wrote that I thought Ethereum was probably still a better long-term investment. The reason is that SOL has only 12 months to close the adoption gap between it and ETH. That could happen, but the gap is huge.

I am a SOL fan, and I do own the token (and I stake it on the main net). So I am not a SOL hater or ETH maximalist. It is unquestionable that SOL has better tech right now.
The problem is that the tech isn’t what people are “buying” with these cryptos. They are buying the D’app ecosystem. And SOL doesn’t have much of one right now.

If I want the speed of SOL right now on Ethereum, I can use the Polygon network (a Layer 2 ETH protocol) to get it. I actively use cryptos, and right now the Polygon network offers better staking than anything on SOL, including the Raydium network.

SOL faces a real challenge in promoting adoption. It’s not insurmountable, but at present it is significant. Hence, ETH is probably a better long term investment.

SOL, by contrast, is likely a better trade. Regardless of who wins, in the next bull-run, we’ll see both coins bounce back.

Assuming that Ethereum regains its previous all-time high, it could do about 2x. Everything beyond that will be a new advance. It could go to $10,000 a coin, and that would represent about a 5x return.

If SOL were to recover its value, it wouldn’t even double—as it just hasn’t lost much value in this crash. If it were to hit Ethereum’s present market cap, it would do 27x.
If SOL were to grow to hit Ethereum’s all-time high market cap, it would hit 41x.

So, even if SOL doesn’t ultimately beat Ethereum, it is likely to net you more money as long as it performs ok. Even landing at the #3 spot in the platform wars is still likely to be quite lucrative.

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Disclaimer:
Notes and Disclosures
I am not giving you financial advice and I am not a financial advisor. I am only explaining how I think about things and imply no expected results from my statements. As they say in the news industry, this is provided for entertainment purposes only. Do your own due diligence before investing. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. You are also encouraged to consult an investment professional and to do your own due diligence before investing in anything.
At the time of writing, I own BTC, ETH and several other alt-coins. If I cover something, I may not own it, but you ought to expect that I do as a rule. I typically trade anything bubbly, including cannabis, and green energy stocks such as Tesla. Because I trade these, I may not own them by the time you read this.