Bitcoin and cryptocurrency prices are falling again after a sudden recovery earlier this week.
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The price of bitcoin, which rose to nearly $45,000 per bitcoin after falling to $39,000 last week, has stalled, dropping sharply to $40,000. Meanwhile, the top ten cryptocurrencies such as BNB, Solana, Cardano, and XRP from Binance also fell, erasing many of the gains they made this week.
Now, analysts at Bank of America
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“[Solana’s] The ability to provide high throughput, low cost, and ease of use creates a blockchain optimized for consumer use cases such as micro-payments, DeFi, NFTs, decentralized networks (web3), and gaming,” Bank of America analyst Alksh Shah wrote in the note to clients this week, reported for the first time. once by Quindisk.
Ethereum, the second-largest cryptocurrency after Bitcoin, has surged over the past year with the proliferation of decentralized finance (DeFi) — using crypto technology to recreate traditional financial services — and viral and digital media-based non-fungible tokens (NFTs) soaring — both almost entirely based on blockchain. in ethereum.
Web3, the idea that a blockchain and a crypto-based Internet will replace Web 2.0 in Silicon Valley-centric, has been popularized in recent months by Facebook’s Mark Zuckerberg pivoting his social media giant toward the “metaverse” and investing massive venture capital from the likes of Andreessen. Horowitz.
Ethereum’s competitors – BNB, solana and Binance’s cardano – have attracted billions of dollars over the past two years as traders bet they will be able to win market share from Ethereum, which suffers from exorbitant fees and painfully slow transaction times.
“Solana prioritizes scalability, but the less decentralized and relatively secure blockchain has trade-offs, evidenced by several network performance issues from the start,” Shah wrote. Solana has experienced a number of outages in recent months that have cast doubt on the ability of the blockchain-based network to scale.
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Compared to global payments giant Visa, which processes about 164 billion transactions annually at an average of 1,700 transactions per second (TPS), Ethereum is much slower, although Solana claims to be competitive. Ethereum currently handles around 12 transactions per second on its base layer while solana boasts a theoretical limit of 65,000 transactions per second.
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has resulted in periods of network congestion and transaction fees that are sometimes greater than the value of the transaction being sent,” Shah wrote, noting that ethereum’s fees are too high.
In December, billionaire cryptocurrency investor Mike Novogratz said he expects the price of Ethereum to continue to outperform Bitcoin — describing Ethereum as a “technical bet and Bitcoin more as a fiat backslash.”