In just two years, Solana has become one of the most popular cryptos in the world. All it needs now is a "killer app."
There may never be a cryptocurrency like Bitcoin (BTC -3.49%). Since its creation back in 2013, Bitcoin has returned an incredible 22,279.89%.And it may not be done yet, with some analysts predicting Bitcoin could eventually hit $1 million by 2030. That would be a more than 40-fold gain from today's price of $24,000.
That said, Solana (SOL -2.07%) has the potential to be the next Bitcoin. Since its public launch in 2020, the token is up an incredible 3,260%.In 2021, Solana was one of the hottest cryptocurrencies of the year. But will it ever become an iconic cryptocurrency that is found within almost every investor's crypto portfolio, just like Bitcoin?
What is the unbeatable value proposition?
Just like any good investment, Solana needs a clear value proposition to attract as many investors as possible. Right now, the investment thesis around Solana is that it is a cheaper, faster, and better alternative to Ethereum (ETH -3.92%), which is the No. 2 crypto in the world by market capitalization. Solana is a pure proof-of-stake blockchain capable of processing over 65,00 transactions per second with near-zero fees, while Ethereum can only process around 15 transactions per second with high transaction fees.
Image source: Getty Images.
For that reason, users and developers have started to coalesce around the Solana ecosystem. It's just cheaper and more efficient to do just about anything on Solana than it is on Ethereum. That's why media analysts have dubbed Solana an "Ethereum killer." Even after Ethereum completes its much-anticipated merge and tries to adopt a proof-of-stake system, Solana will still have a superior technology platform to Ethereum.
However, for Solana to become the next Bitcoin, it will need an even stronger value proposition. Bitcoin, for example, is "digital gold." This concept is so simple to understand that it has motivated even the youngest crypto investors to buy and HODL (crypto lingo for "hold") for the long term. It's been said Ethereum is "digital oil." This, too, is a remarkably simple and effective way to describe why Ethereum is so important for the crypto world. So what is Solana? Here's one idea: Solana is "digital sunshine."
Where are the Solana supporters?
Another distinguishing feature of Bitcoin is the presence of a cult-like following. Any time the token falls, fans urge Bitcoin supporters to "buy the dip." Any time people ask them where the price of Bitcoin is going, they confidently answer "to the moon."This type of incredible optimism about the future is something that Solana is going to have to capture and retain if it ever hopes to become the next Bitcoin, because that's what will help it bounce back from difficult market conditions. Just as there are Bitcoin maximalists (people who believe Bitcoin is the end-all and be-all of crypto) and Ethereum maximalists, there also need to be Solana maximalists.
And there are already signs of these Solana super-supporters emerging. In 2021, for example, Solana supporters tried to brand the entire summer as "Solana Summer." Or, take Solana's recent launch of an in-real-life (IRL) retail store experience called Solana Spaces in the center of New York City.In many ways, Solana Spaces looks and feels like an Apple Storeand it is a first for the blockchain world. So if Solana ever becomes a crypto brand along the lines of a tech brand like Apple, watch out.
What is the killer app?
Finally, to become the next Bitcoin, Solana needs to develop a "killer app" that will set it apart from all other blockchain projects. In the technology world, a killer app is the one product or service that convinces users, developers, and tech entrepreneurs to embrace a particular company. Right now, the most likely choice for a Solana killer app involves non-fungible tokens (NFTs), or digital representations of ownership of art, videos and other media. Since mid-April, Solana NFTs have been a hot topic of conversation. That was when the most popular NFT marketplace, OpenSea, began listing Solana NFTs. But the killer app could also be a new game, a new metaverse creation, or a new decentralized finance (DeFi) offering.
Move over, Bitcoin -- here comes Solana
Obviously, a lot needs to go right for Solana to become the next Bitcoin. However, based on what has already gone right for Solana over the past two years, there's reason to be optimistic about its future.
Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Apple, Bitcoin, Ethereum, and Solana. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
