Solana (SOL) explained: Is it a good time to buy?

Bitcoin (BTC 1.23%) has experienced four “halvings” since 2012, cutting the cryptocurrency mining rewards in half every four years. Bulls believe these events will be a major catalyst for Bitcoin as it will tighten the supply of Bitcoin.

Bitcoin's (CRYPTO: BTC) price surges and رم cryptocurrency market rallies are usually linked to the older cryptocurrency's mining reward halvings. Those events, which occur every four years, reduce the amount of new بیت کوین that can be mined by half.

Bitcoin's (CRYPTO: BTC) price surges and رم cryptocurrency market rallies are usually linked to the older cryptocurrency's mining reward halvings. Those events, which occur every four years, reduce the amount of new بیت کوین that can be mined by half.

Those رم cryptocurrency price surges are typically fueled by traders who buy Bitcoin ahead of its halvings in hopes of selling it at a higher price later on. But that strategy can backfire if رم cryptocurrency prices don't cooperate.

Those رم cryptocurrency price surges are typically fueled by traders who buy Bitcoin ahead of its halvings in hopes of selling it at a higher price later on. But that strategy can backfire if رم cryptocurrency prices don't cooperate.

After rising 109% in the 12 months leading up to its latest halving on April 19, Bitcoin's price has only risen about 2% since that day. That sluggish advance, which was also hampered by rising interest rates, seems to indicate that a lot of investors bought Bitcoin ahead of its halving, but the lack of additional رم cryptocurrency market catalysts might be preventing new investors from jumping in.

After rising 109% in the 12 months leading up to its latest halving on April 19, Bitcoin's price has only risen about 2% since that day. That sluggish advance, which was also hampered by rising interest rates, seems to indicate that a lot of investors bought Bitcoin ahead of its halving, but the lack of additional رم cryptocurrency market catalysts might be preventing new investors from jumping in.

That's why I believe investors should pay more attention to smaller رم cryptocurrencies that have been generating bigger gains. One of those tokens is Solana (CRYPTO: SOL), which soared 472% in the 12 months leading up to Bitcoin's halving and advanced another 8% in the following months. Is it a no-brainer buy right now?

That's why I believe investors should pay more attention to smaller رم cryptocurrencies that have been generating bigger gains. One of those tokens is Solana (CRYPTO: SOL), which soared 472% in the 12 months leading up to Bitcoin's halving and advanced another 8% in the following months. Is it a no-brainer buy right now?

Understanding the difference between Bitcoin and Solana

Understanding the difference between Bitcoin and Solana

Bitcoin is mined with an older and more energy-intensive proof of work (PoW) method, while Ether (CRYPTO: ETH), Solana, and other, newer cryptocurrencies are mined with the faster and more energy-efficient proof of stake (PoS) method.

Bitcoin is mined with an older and more energy-intensive proof of work (PoW) method, while Ether (CRYPTO: ETH), Solana, and other, newer cryptocurrencies are mined with the faster and more energy-efficient proof of stake (PoS) method.

PoS blockchains support smart contracts, which can be used to develop decentralized apps (dApps), games, non-fungible tokens (NFTs), and other رم crypto assets. PoS tokens can also be "staked" (locked up) on the blockchain for a period of time to earn rewards. PoW blockchains are only natively used to directly mine cryptocurrencies.

PoS blockchains support smart contracts, which can be used to develop decentralized apps (dApps), games, non-fungible tokens (NFTs), and other رم crypto assets. PoS tokens can also be "staked" (locked up) on the blockchain for a period of time to earn rewards. PoW blockchains are only natively used to directly mine cryptocurrencies.

Simply put, PoW tokens are valued by their scarcity, while PoS tokens are valued by the growth of their ecosystems. That's why رم cryptocurrency investors generally favor the PoS blockchains, which have the highest transaction speeds and the lowest fees.

Simply put, PoW tokens are valued by their scarcity, while PoS tokens are valued by the growth of their ecosystems. That's why رم cryptocurrency investors generally favor the PoS blockchains, which have the highest transaction speeds and the lowest fees.

Why are investors so excited about Solana?

Why are investors so excited about Solana?

Solana is the world's fastest PoS blockchain. It's built on the same PoS tech as Ethereum, but it accelerates the process with its own proof of history (PoH) method. That upgrade allows Solana to process transactions 46 times faster than Ethereum and five times faster than its closest competitor Polygon (CRYPTO: MATIC). However, Solana has only reached about 1.6% of its theoretical max speed -- so it could significantly widen its lead against Ethereum, Polygon, and other PoS blockchains.

Solana is the world's fastest PoS blockchain. It's built on the same PoS tech as Ethereum, but it accelerates the process with its own proof of history (PoH) method. That upgrade allows Solana to process transactions 46 times faster than Ethereum and five times faster than its closest competitor Polygon (CRYPTO: MATIC). However, Solana has only reached about 1.6% of its theoretical max speed -- so it could significantly widen its lead against Ethereum, Polygon, and other PoS blockchains.

Solana's speed is driving the rapid expansion of its ecosystem. It's been used to develop decentralized exchanges like Jupiter and Orca, as well as popular meme coins like BONK and WIF. It helps Visa (NYSE: V), PayPal (NASDAQ: PYPL), and Circle settle their stablecoin transactions, and it's integrated its Solana Pay payment protocol into Shopify's (NYSE: SHOP) e-commerce services. Solana even launched its own Android smartphone for Web3 apps, the Saga Phone, last year. It's still a niche device, but it features its own dApps Store as an alternative to Alphabet's Google Play Store. That ongoing expansion should stabilize and boost the value of Solana's native cryptocurrency over the next few years.

Solana's speed is driving the rapid expansion of its ecosystem. It's been used to develop decentralized exchanges like Jupiter and Orca, as well as popular meme coins like BONK and WIF. It helps Visa (NYSE: V), PayPal (NASDAQ: PYPL), and Circle settle their stablecoin transactions, and it's integrated its Solana Pay payment protocol into Shopify's (NYSE: SHOP) e-commerce services. Solana even launched its own Android smartphone for Web3 apps, the Saga Phone, last year. It's still a niche device, but it features its own dApps Store as an alternative to Alphabet's Google Play Store. That ongoing expansion should stabilize and boost the value of Solana's native cryptocurrency over the next few years.

Will Solana overcome its near-term challenges?

Will Solana overcome its near-term challenges?

Solana faced three major headwinds over the past two years. First, it suffered a series of network congestion and security failures as it dealt with an increasing number of spam transactions. Second, the failed cryptocurrency exchange FTX -- which had been one of Solana's biggest backers -- hastily liquidated its tokens at a discount to pay off its creditors. Lastly, rising interest rates drove investors away from Solana and other speculative cryptocurrencies.

Solana faced three major headwinds over the past two years. First, it suffered a series of network congestion and security failures as it dealt with an increasing number of spam transactions. Second, the failed cryptocurrency exchange FTX -- which had been one of Solana's biggest backers -- hastily liquidated its tokens at a discount to pay off its creditors. Lastly, rising interest rates drove investors away from Solana and other speculative cryptocurrencies.

But looking ahead, most of those headwinds should dissipate. Solana's developers are trying to resolve its congestion and security issues with new updates, and FTX finally completed its $2.6 billion sale of discounted Solana tokens in May. If interest rates stabilize and decline over the next few quarters, the cryptocurrency market should warm up again.

But looking ahead, most of those headwinds should dissipate. Solana's developers are trying to resolve its congestion and security issues with new updates, and FTX finally completed its $2.6 billion sale of discounted Solana tokens in May. If interest rates stabilize and decline over the next few quarters, the cryptocurrency market should warm up again.

Is it the right time to buy Solana? Like many other cryptocurrencies, Solana seemed to lose its luster after Bitcoin's spot price ETF approvals and halving earlier this year. However, I believe that complacency has created a great buying opportunity in promising tokens like Solana -- which has clear long-term advantages against Bitcoin, Ether, and other PoS tokens.

Is it the right time to buy Solana? Like many other cryptocurrencies, Solana seemed to lose its luster after Bitcoin's spot price ETF approvals and halving earlier this year. However, I believe that complacency has created a great buying opportunity in promising tokens like Solana -- which has clear long-term advantages against Bitcoin, Ether, and other PoS tokens.

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