Bitcoin vs. Solana – What’s the difference?

by James · April 7, 2023

There are many reasons why so many people seek to learn the crucial differences between Bitcoin and Solana. These networks are among the best options for traders, which are both listed on major CEXs and have a strong following. So how does the world’s first cryptocurrency stack up against a third-generation powerhouse? Here are some valuable insights into Bitcoin vs. Solana.

What is Bitcoin?

Bitcoin was the first successful attempt to create a reliable and secure decentralized currency. The network changed the world forever when Satoshi Nakamoto published the now famous Whitepaper in 2008. The paper described how a network of nodes could act as a validation system instead of leveraging a central group like a bank.

Bitcoin filled a need in the market for a permissionless peer-to-peer electronic cash system. Now, Bitcoin has seen its use case shift from day-to-day consumption to include store of value purposes. The network has seen significant growth with an all-time high of over $68,000.

Today, Bitcoin has begun to regain some of its daily currency potential thanks to new technologies such as the lightning network. This off-chain protocol allows Bitcoiners to cheaply send up to 1,000,000 tps – which is significantly faster than the mainnet. These developments have helped Bitcoin stay relevant in a market with increasingly capable competitors.

Source: Bitcoin.org – Bitcoin Vs. Solana

What is Solana?

Solana is a third-generation programmable blockchain. The network is the brainchild of Anatoly Yakovenko who founded Solana in 2017. At the time, the focus on the market was to introduce a programmable blockchain that could outperform Ethereum and provide more scalability.

Solana entered the market to fulfill these goals. The platform became a hit with developers due to its open infrastructure. Additionally, traders enjoyed the low fees and high performance. Today, Solana is a vibrant blockchain community that has a combination of DEXs, DeFi and Dapps.

What problems was Bitcoin built to alleviate?

Given that no one knows the Bitcoin founder directly, one can only speculate about Bitcoin’s true purpose. In the coin’s whitepaper, Nakamoto states that the protocol will function as a peer-to-peer electronic cash system. Aside from its technical purpose, there are some higher purposes that Bitcoin fulfills.

Nakamoto hints at some of the coin’s goals as providing a more transparent and fair alternative to the market. In the Bitcoin Genesis block, which is the first block in the blockchain, Nakamoto puts in a reference to the Bank of England receiving a massive bailout. This reference can be seen as a clue to one of the reasons why Nakamoto created this game-changing invention.

Bitcoin opens the world to a global economy using digital currency. The expansion of the internet has made this concept even more possible than ever before. Bitcoin remains a pioneer in terms of market freedom and transparency. Society continues to hold the torch in fulfilling Nakamoto’s dream of a fair economy for all.

What problems was Solana built to alleviate?

When Solana entered the market, scalability concerns wreaked havoc on networks. Ethereum and Bitcoin suffered from crushing congestion that rendered both networks almost unusable. There were cases when it cost more to send these tokens than the actual amount you were trying to send.

This overload left Dapp developers and users looking for more scalable alternatives. This is the time when Solana entered the market. Cryptocurrencies were in for a breakout year with the introduction of the ERC-20 token standard and the ICO (Initial Coin Offering) craze. Solana entered the market to fill a need for a high performance programmable network.

The network integrated a new consensus mechanism that greatly improved performance compared to Bitcoin. Bitcoin can handle around 7 tps on the mainnet. For comparison, the Solana has been bench tested to 29,171 tps. Part of this performance comes from the improved block times. Bitcoin has a block time of 10 minutes. Solana approves blocks every 2.34 seconds. In addition, the developers were sure to leave room for the network to scale vertically in the future to meet increasing demands.

How does Bitcoin work?

Bitcoin uses a Proof-of-Work (PoW) consensus algorithm to operate. This system eliminates central groups and replaces them with network nodes called miners. These participants are responsible for approving blocks of transactions every ten minutes. Once approved, these blocks are added to the chain of transactions to form the blockchain.

While all miners approve transactions, only one receives the rewards. The reward is given to the miner who is the first to figure out a complex mathematical equation called SHA-256. This equation is so difficult that your computer concludes that it is easier to make random guesses than the actual calculations.

When you hear about Bitcoin miners, these are devices that are built to complete this equation faster. Today’s Bitcoin network miners use advanced ASICs (Application Specific Integrated Chips) that are thousands of times better at solving the SHA-256 equation compared to your PC.

BTC

BTC is a cryptocurrency that operates on the Bitcoin network. As the first cryptocurrency, BTC’s first technical purpose was to act as digital money. Consequently, it is limited in its technical capabilities compared to today’s advanced networks. Notably, there are only 21 million Bitcoins slated for issuance.

How does Solana work?

Solana is a third-generation blockchain that uses a Proof-of-Stake (PoS) consensus system to remain valid. This style of blockchain does away with miners and replaces them with stakers. Stakers agree to lock their tokens in a smart contract to participate in the approval process.

Source: Twitter – Solana

The advantage of this approach is that it is more environmentally sustainable, does not require expensive equipment and is designed to be more democratic. Anyone can use their tokens to secure rewards. The downside of staking networks is that they are not as proven as PoW networks like Bitcoin, which have over a decade of secure operation and are known to suffer from power outages.

Solana integrates an additional timestamp in the blocks of transactions that improves the reference. The cryptographic clock means that nodes do not need to approve the entire blockchain’s state every time. They can leverage these snapshots to improve performance, which acts as another layer of validation.

SUN

SOL is the main tool for the Solana network. This advanced token serves multiple roles in the ecosystem. Fr To one, it is used to pay transactions and smart contract execution fees. It can also be used to send value globally. Token holders can stake SOL to get passive rewards.

How to buy Bitcoin (BTC) and Solana (SOL)

Currently, Bitcoin (BTC) and Solana (SOL) are available for purchase on the following exchanges.

Maintain – This is one of the best exchanges for US and UK residents which offers a wide range of cryptocurrencies. Germany and the Netherlands are prohibited.

Maintain disclaimer: Assets available on Uphold are subject to region. All investments and trading are risky and may lead to loss of capital. Crypto assets are largely unregulated and are therefore not subject to protection.

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users and over $207 billion in quarterly trading volume.

The Kraken exchange offers trading access to over 190 countries, including Australia, Canada, Europe, and is ours most recommend exchange for US residents. (Excluding the state of New York and Washington)

Binance – Best for Australia, Canada, Singapore, UK and most of the world. US residents are prohibited from buying most tokens. Use discount code: EE59L0QP for 10% cashback discount on all trading fees.