‘Bitcoin maxis’ like Solana, but is there sound logic to that
Recent changes in cryptocurrency market dynamics have fueled the popularity of altcoins like Solana [SOL]. It recently became one of the most trending blockchain platforms around on the back of its surging price.
The cryptocurrency, in fact, had a 1-year ROI of over 4,200%, despite dropping by 34% since its peak in early September. Despite the latest hiccup in value, however, market observers believe the project has managed “winning over a significant number of Bitcoin Maxis or near-maxis.”
Ikigai Funds’ Travis Kling offered this observation on Twitter when he said,
“After talking to a bunch of folks over the last couple months, it’s pretty clear that SOL is successfully winning over a significant number of BTC Maxis or near-maxis, which have previously owned zero ETH or very little ETH.”
While the crypto-space is competitive, the tech-twist to the age-old saying — “competition of your competition is your ally” also holds true. Solana is not competing with Bitcoin. Instead, it is competing with Ethereum’s position in decentralized finance, NFTs, and smart contract offerings. Given the fact that transacting on Ethereum is still a pain for some users, Solana’s cheap and fast transactions provide a better alternative to many.
Solana’s DeFi projects recently crossed $3 billion, despite Ethereum hosting the maximum number of DeFi and NFT projects. While Bitcoin “maxis” are also opting-in for smart contracts, they prefer SOL over ETH, according to Kling.
Why? According to the exec,
“I think maxis look at ETH vs SOL and think –
Well as long as its not going to be all that decentralized, might as well have a smart contract platform that can actually handle enough throughput with cheap enough fees where it can really scale, instead getting choked up like ETH.”
However, not everyone agrees with Kling’s opinions. Many believe the decentralization narrative to be wrongly used by Kling, with another Twitter user @mikemcg0 noting that Ethereum is “more decentralized than BTC.” Anyone can run an Ethereum validator,” he said, “but only a select few oligopolies can mine BTC.”
Even so, Bitcoin mining has spread out even more after the recent China crackdown. Although the process is extensive in terms of effort, time, and money, according to another user, “anyone can” mine BTC “if they have the entrepreneurial mindset.”
Now, the latest outage faced by Solana did raise questions about the level of centralization. However, that has not really discouraged those who want to indulge in DeFi, NFTs, and smart contracts. As Solana forges new contracts with Hacken Foundation and Gate.io, others institutions like Osprey Funds and Grayscale are in a race to include Solana in their respective bouquet of products.
In fact, Osprey Funds has already registered Osprey Solana Trust with the SEC.
‘Ethereum killer’ or not, Solana is en route to gaining more interest from the booming crypto-market. Even turning so-called BTC maxis in the process.