Bitcoin vs. Solana: Investor’s Guide 2024

Looking for the best cryptocurrency in 2024? In this guide, we’ll break down everything you need to know about the differences between Bitcoin and Solana! 

Bitcoin vs. Solana: What’s the better choice? 

The choice between Bitcoin and Solana depends on your own financial situation and your own reasons for investing in cryptocurrency. 

Bitcoin: If you’re interested in a decentralized currency that is designed to be scarce and protect your wealth from inflation, Bitcoin could be the right choice for you. Because Bitcoin has survived multiple bear markets, it’s generally a safer choice than newer cryptocurrencies like Solana. 

Solana: If you’re looking to invest in a blockchain with low fees and fast speeds that can power an ecosystem of NFTs, DeFi protocols, and cryptocurrency games, Solana may be the right choice for you. Because Solana has a smaller market capitalization, it’s possible that SOL has more growth potential than BTC. 

What is Bitcoin?

Bitcoin, originally created in 2009, is the most valuable cryptocurrency in the world. At the time of writing, Bitcoin is worth more than $1 trillion! 

Bitcoin is fully decentralized — meaning that it’s not controlled by any one entity like a government or a central bank. That means Bitcoin can be used to enable secure borderless transactions and store wealth outside the traditional banking system. 

Bitcoin has been called ‘digital gold’ due to its limited supply of 21 million coins. Bitcoin is considered a store of value and a hedge against inflation for fiat currencies like the US dollar. 

Today, businesses, investors, and even countries like El Salvador hold BTC! 

What is Solana?

Solana is a high-performance blockchain platform built for speed and efficiency. Solana is used to power decentralized applications that require smart contracts — such as cryptocurrency games, NFT projects, and DeFi protocols! 

At the time of writing, Solana has a market capitalization of over $60 billion and is the 5th-most valuable cryptocurrency in the world. While Solana is one of the most successful crypto projects of the last few years, its value is still dwarfed by Bitcoin. 

Solana offers faster speeds and lower fees than other smart contract blockchains. 

Bitcoin vs. Solana: Technical overview 

How does Bitcoin work? 

Bitcoin is a decentralized network that uses the blockchain to enable peer-to-peer transactions. 

Bitcoin uses the Proof of Work consensus mechanism for security. Bitcoin miners must solve complex mathematical problems to verify transactions. 

Bitcoin was not designed with smart contracts in mind — which explains why Bitcoin does not have as large of a NFT and DeFi ecosystem as other blockchains. 

How does Solana work? 

Unlike Bitcoin, Solana is not typically viewed as just a store of value. Solana’s primary value comes from using smart contracts to enable decentralized applications. 

Smart contracts make it possible for developers to create NFTs, DeFi protocols, cryptocurrency games, and much more on the Solana blockchain! 

Launched in 2020, Solana aims to provide high efficiency by using Proof of Stake in conjunction with Proof of History. Proof of History essentially allows nodes to know the time when a previous transaction occurred — which results in faster speeds and more efficiency. 

Bitcoin vs. Solana: Which is Better?

Market Performance

Bitcoin: Bitcoin is the most valuable cryptocurrency in the world. Since 2009, BTC has seen steady price appreciation. In 2024, a Bitcoin ETF was approved by the SEC — making Bitcoin more accessible than ever! 

(Graph of BTC performance from 2019 to 2024) 

Solana: Solana rapidly gained attention for its scalability and transaction speeds, making it a favorite for developers and crypto entrepreneurs. 

(Graph of BTC performance from 2019 to 2024) 

Competition

Winner: Bitcoin 

Bitcoin: Bitcoin has no direct competition. It’s likely that Bitcoin’s first-mover advantage means that no cryptocurrency can rise as a perfect competitor to the asset when it comes to store of value. Bitcoin’s closest competitors are often thought to be commodities such as gold and other precious metals. 

Solana: Solana competes directly with Ethereum and other smart contract blockchains. Despite the fact that Solana offers faster speeds and lower fees, Ethereum is still larger than Solana. It’s likely that Ethereum’s loyal user base and development community give it an advantage over other smart contract blockchains. 

Use Cases

Winner: Solana 

While Bitcoin is designed primarily for use as a currency, Solana has the potential to power a wide variety of Web3 applications.

Bitcoin: Bitcoin is predominantly used as a digital currency and store of value. While the blockchain does support limited applications like Bitcoin Ordinals, Bitcoin was primarily designed to serve as a currency — not a smart contract platform. Many ‘Bitcoin maximalists’ (proponents who believe in Bitcoin over any other cryptocurrency) see this focus as a positive and believe that NFTs and other smart contract-enabled applications are a scam. 

Solana: Solana supports a wide range of decentralized applications, from DeFi platforms to NFTs. Solana may be a better choice for investors who believe in the potential of the Web3 ecosystem. 

Tokenomics 

Winner: Bitcoin 

Because of Bitcoin’s capped supply of 21 million units, BTC is a great choice for investors looking to protect their wealth from inflation. 

Bitcoin: Bitcoin's monetary policy is fixed, with a capped supply of 21 million coins, which ensures scarcity. Every year, Bitcoin goes through a halving — which ensures that the amount of new BTC entering the market decreases over time. 

Solana: Solana does not have a capped supply. Solana’s annual inflation was originally around 15% — though it is designed to slowly decrease until it reaches a long term fixed rate of 1.5%. 

Consensus Mechanism 

Winner: Solana 

While there’s pros and cons to both consensus mechanisms, we gave the edge to Solana for enabling fast, energy-efficient transactions. 

Bitcoin: Bitcoin uses a Proof of Work (PoW) consensus mechanism. 

• Proponents say: Proof of Work is best for security and preventing a blockchain from becoming too centralized. 
• Critics say: Proof of Work is unnecessarily slow and bad for the environment. 

Solana: Solana uses Proof of History (PoH) along with Proof of Stake (PoS). 

• Proponents say: Proof of Stake is faster and more energy efficient. 
• Critics say: Proof of Stake may lead to centralization, since stakers with a large proportion of SOL earn more SOL. 

Speeds 

Winner: Solana 

Solana is one of the fastest blockchains on the market!

Bitcoin: Around 3-7 transactions per second. 

Solana: Around 400 transactions per second 

Fees 

Winner: Solana 

Solana offers very low fees compared to other blockchains! 

Bitcoin: Average transaction fee is approximately $2.50.

Solana: Average transaction fee is approximately $0.00025. 

Regulations

Winner: Bitcoin 

Bitcoin has an advantage from a regulatory standpoint because of the way that the government treats ‘commodities’ vs ‘securities’. 

Bitcoin: The government has stated that Bitcoin is a commodity — which means it’s subject to less strict regulations than securities. That’s part of the reason why the Bitcoin ETF was the first cryptocurrency ETF to be approved. 

Solana: Many legal experts believe that SOL may be considered a ‘security’ by the SEC. This means that SOL could be subject to stricter regulatory oversight than BTC — and it’s possible that a Solana ETF won’t be approved for years. 

Can Solana Surpass Bitcoin?

While Solana offers smart contract technology, faster speeds, and lower fees, Bitcoin's established position as the first and most recognized cryptocurrency gives it a unique advantage. 

It’s unlikely that Solana — or any other cryptocurrency — can catch up to Bitcoin’s $1 trillion dollar market capitalization in the foreseeable future. 

However, it’s possible that Solana may have higher growth potential — especially as decentralized applications attract more users in the years to come. 

Can I invest in Solana and Bitcoin?

You can invest in both SOL and BTC. Remember, Bitcoin and Solana are not competing blockchains — both are designed for different purposes! 

Many investors own both cryptocurrencies as a way to diversify their portfolios and benefit from the potential appreciation of BTC and SOL. 

How to Buy Solana and Bitcoin

If you’re interested in getting started invested in Solana and/or Bitcoin, you can follow the following steps. 

1. Choose an Exchange: Most major exchanges allow you to buy Bitcoin and Solana. Coinbase, Gemini, and Kraken are popular options for buying crypto. 
2. Create an Account: Before you buy cryptocurrency, you’ll need to create an account and verify your identity. You may be required to submit personal information — including a copy of your driver’s license or other government ID. Verification typically takes 1-2 days. 
3. Deposit Funds: Once you’ve verified your identity, you can make purchases through payment methods like bank transfer or debit card. 
4. Buy Cryptocurrency: Search for Bitcoin (BTC) or Solana (SOL) and place an order. You’ll be able to see your cryptocurrency in your exchange account within a few minutes! 

In conclusion

While Bitcoin and Solana were designed for different purposes, they can both serve as a great addition to your portfolio. You may decide to invest in one or both, depending on your personal preferences and your unique financial situation.