Bitcoin is the biggest cryptocurrency by market cap, while Solana is the 5th largest cryptocurrency by market cap.
Both are therefore top cryptocurrencies, but they are widely different. Bitcoin is a proof-of-work (PoW) cryptocurrency, while Solana is a PoS cryptocurrency. Because of this difference in their consensus mechanisms, they are different in many ways.
In this guide, we will look into these differences to help you distinguish the two better. We will also look at the strengths and weaknesses of both projects to help guide you on which one may be suitable for you for investment or other uses.
Without further waste of time, let’s get into it and try to distinguish between Bitcoin and Solana cryptocurrencies.
What Is Bitcoin (BTC)?
Bitcoin (BTC) is the most popular cryptocurrency and the first to be launched. Anyone who knows anything about cryptocurrencies has heard of Bitcoin, even if they don’t know about any other cryptocurrency.
It was first created with the sole aim of serving as peer-to-peer electronic cash, that is it was to be used for buying and selling. As the number of users on the network continued to increase though, there was congestion and the network became slower.
Because of the congestion and slow transactions, the network became expensive to use, with fees getting higher every day. The aim of creating the project as a form of electronic cash was therefore defeated, and even led to a controversy.
Bitcoin’s PoW network has a small block size of 1 MB, which is what has been blamed for the slow transactions. It takes 10 minutes to finalize transactions on the network as miners have to solve complex mathematical problems in the process.
The miners are rewarded with new BTC, and this is how new coins come into circulation. There are a maximum of 21 million BTC that can ever be mined. This makes it one of cryptocurrencies with the smallest supplies.
Therefore, investors now consider it to be a store of value and hedge against inflation since its value has grown astronomically since its creation. Close to 20 million of the 21 million BTC have already been mined, and many have been lost, further limiting the supply.
What Is Solana (SOL)?
Solana (SOL) is a PoS network that supports all things web3. This included decentralized applications, decentralized finance (DeFi), non-fungible tokens, etc. The network was created as a more scalable, faster and cheaper network than Ethereum which is the foremost network for all things web3.
Because of this, Solana is commonly referred to as the “Ethereum Killer”. The network uses a PoS consensus mechanism just like Ethereum, but it has another mechanism known as proof-of-history (PoH) which is the secret behind its speed and scalability.
The PoH mechanism makes it possible for Solana to increase capacity when there is high demand and to adjust back to its regular size when the demand decreases. The network has a native token known as SOL.
SOL is used for a number of purposes including paying of transaction fees on the network. It is also the staking token used to secure the network through statking. Staking is an integral aspect of the Solana network since it is a PoS network.
The token also gives holders the right to vote on governance proposals for growing the network. There are a total of 460 million SOL in circulation, with a total supply of 580 million. However, the supply doesn’t have a cap and is infinite as long as the network continues to exist.
Which Is Better?
Choosing between these two cryptocurrencies is easy if you know what you want. If it is an investment asset you can count on for the long term, Bitcoin is the right choice.
However if you’re looking to enter web3, Solana is the way, as it offers all the tools you need to thrive in the ecosystem, which Bitcoin doesn’t have currently.
