What’s the best blockchain in 2024 — Ethereum or Solana?
In this guide, we’ll compare the two blockchains and discuss how they compare in technical specs, key metrics, and strengths and weaknesses.
What is Ethereum?
Originally launched in 2015, Ethereum was the first blockchain built for smart contracts and decentralized applications. Today, many of the world’s most popular DeFi protocols and NFTs are built on Ethereum.
At the time of publication, Ethereum has a market capitalization upwards of $250 billion and is the world’s second most valuable cryptocurrency.
What is Solana?
Solana is a smart contract blockchain founded in 2017 by Anatoly Yakovenko, a former Qualcomm engineer. Solana was built with a unique consensus mechanism — Proof of History — designed for fast transaction speeds and low fees.
Today, Solana offers rapid transactions. However, critics claim that Solana is more centralized than competitors like Ethereum.
At the time of publication, Solana has a market capitalization upwards of $35 billion and is the world’s fifth most valuable cryptocurrency.
Can Solana flip Ethereum?
In the closing months of 2023, Solana surpassed Ethereum in several key metrics. Let’s take a look at a few statistics (from December 20, 2023).
Daily active users: 940k+ for Solana, 490k+ for Ethereum Daily transactions: 25.3m+ for Solana, 1.14m+ for Ethereum Monthly new addresses: 5.52m for Solana, 1.69m for Ethereum
While Solana is outperforming Ethereum in these areas, it’s important to note that Ethereum has for many years been the most popular blockchain for smart contract development. As of December 2023, Ethereum’s market capitalization is almost 8x the value of Solana’s.
Solana’s Limitations Compared to Ethereum
Now, let’s walk through some of Solana’s limitations compared to Ethereum.
Existing dApp ecosystem
Originally launched in 2015, Ethereum was the first blockchain for dApps and smart contracts. That means that Ethereum has benefitted from a first-mover advantage, with many popular decentralized applications being built on the blockchain — such as Uniswap and OpenSea.
Because many of the most popular decentralized applications are Ethereum-based, users may not be inclined to move to another blockchain!
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Some critics have claimed that Solana is more centralized than other blockchains like Ethereum due to the high cost of setting up a node. Currently, there are more than 3,000 Solana validators compared to more than 800,000 Ethereum validators.
Solana Strengths Compared to Ethereum
Let’s walk through some of the advantages of Solana compared to Ethereum.
Solana is one of the fastest blockchains on the market. Currently, Ethereum processes around 15 transactions per second. Meanwhile, Solana processes more than
2,600 transactions per second due to its unique consensus mechanism. This speed advantage leads to lower fees and better user-experience for apps built on Solana.
It’s possible that Solana will be even faster after Firedancer is introduced to the mainnet in Q1 of 2024.
In addition to its other benefits, Solana’s Proof of History consensus mechanism is considered more environmentally friendly than Ethereum’s Proof of Stake.
Solana’s low fees and rapid throughput led to an explosion in user growth at the end of 2023. By the end of 2023, Solana had surpassed Ethereum on several key growth metrics.
Solana vs Ethereum NFTs
While Ethereum has long been the most popular blockchain for NFTs, Solana’s fast speeds offer a better user experience and lower fees.
Network Size and Popularity Winner: Ethereum
For years, Ethereum has been the most popular for NFT creators and investors. As a result, Ethereum has the most developed NFT ecosystem when it comes to existing user base and supporting services.
Growth and Scalability Winner: Solana
Solana’s NFT ecosystem has seen rapid growth due to its scalability — which means that NFT transactions can be executed much faster.
Transaction Speeds Winner: Solana
Solana offers a significantly higher transaction speed (2,600 transactions per second) compared to Ethereum (15 transactions per second), enhancing the user experience with faster and more efficient transactions.
Transaction Fees Winner: Solana
Ethereum's slower transaction speeds lead to higher network congestion and higher transaction fees. Solana's lower transaction costs make it more accessible for a broader range of users.
Enabling creativity Winner: Solana
Solana's faster speed and lower costs allow for more creative freedom when it comes to creating NFTs. For example,
NFT games often require fast speeds — which means that Solana may be a better option for crypto game developers. Is Solana an ‘Ethereum killer’?
Solana — like other smart contract blockchains like Cardano and Avalanche — has been described as an Ethereum killer.
However, Ethereum’s user base has shown resistance to switching to other blockchains. Despite all of the Ethereum alternatives that have been created in recent years, Ethereum is still the most popular blockchain for decentralized applications and NFTs.
Solana has shown encouraging signs of growth in recent years. However, only time will tell if Solana — and the dozens of other ‘Ethereum killers’ — will be able to surpass Ethereum.
Can Solana reach the 100M user milestone?
In 2023, Ethereum hit the milestone of 100M funded addresses.
At the time of writing, Solana’s user base has seen rapid growth — going from 200k to 840k active users from November to December 2023. However, it’s important to remember that Ethereum was launched several years before Solana. As a result, it may take Solana several more years to reach the 100M milestone.
How will Firedancer impact Solana?
Firedancer — a new validator client for Solana — could significantly enhance the network's performance and scalability. Firedancer’s mainnet launch is scheduled in the first quarter of 2024.
What is Firedancer?
Firedancer is designed to boost Solana's transaction processing capabilities, aiming to handle up to 1 million transactions per second. This leap in performance is achieved through both hardware and software upgrades, making Solana's network faster and more efficient.
In a live demonstration, Firedancer processed an astonishing 1.2 million transactions per second on a single validator, showcasing its potential to improve the Solana network. If Firedancer delivers on its promises, it’s possible that transactions on Solana will be significantly faster than transactions on Ethereum.
How does the FTX collapse impact Solana?
collapse of FTX led to a significant decline in the price of Solana. In the wake of the FTX bankruptcy, Solana’s price fell from $36 to $12.
It’s important to remember that Solana has no direct relationship with FTX or its founder, Sam Bankman-Fried. However, it’s estimated that FTX owned more than 50 million units of Solana. In addition, 20% of Solana’s ecosystem has received investments from FTX or its sister firm, Alameda Research.
Some speculate that as the FTX bankruptcy process moves forward, the firm may liquidate its assets — including all of its SOL. It’s possible that this may lead to a drop in the price of Solana.