Solana: The Pros and Cons of the Cryptocurrency

September 27, 2025, 2:13 pm | Read time: 5 minutes

Since Solana (SOL) has established itself among the top 5 cryptocurrencies, the coin is increasingly considered a blue chip in the blockchain sector by investors and crypto platforms. Many projects choose to build their apps on Solana. This is certainly one of the key reasons for its newly acquired status. But how did this rapid rise come about?

The Success Factors

Factor number one: Solana’s transaction speed is currently several thousand times faster than Ethereum and about 10,000 times faster than Bitcoin.

Factor number two: Even after switching from Proof of Work (PoW) to Proof of Stake (PoS), Ethereum still consumes significantly more energy per transaction than Solana. In terms of energy efficiency, Solana not only surpasses Bitcoin by a wide margin but also Ethereum.

Factor number three: Popularity with NFT and memecoin projects. NFTs, or Non-Fungible Tokens, and memecoins are the protagonists of blockchain pop culture. While memecoins offer no technical innovations, they have a special coolness factor. They have the power to attract new users to the crypto space. Solana scores here.

Factor number four: price potential. Measured by the total supply, or the programmed supply of Solana tokens on the blockchain, which is about 570 million, the current price for a top 5 coin seems quite modest. Many investors still see attractive opportunities here.

Factor number five: low transaction costs. Bitcoin and Ethereum can, depending on chain congestion, cause absurdly high transaction costs of up to 100 euros or more. A Solana transaction, on the other hand, usually costs well under a cent.

The Drawbacks

Where there is so much light, shadows are not far behind. And so the list is correspondingly not shorter:

Drawback number one: The Solana chain does not currently match its success technically. There are repeated total failures of the blockchain, where block production comes to a standstill. The overload of Solana also leads to a high number of transaction failures.

Drawback number two: the reputation of lacking decentralization. This reputation does not quite match the facts. Although a foundation based in Switzerland backs the Solana chain, it is not a centrally controlled product, as some believe. On the contrary, the number of active validators far exceeds that of other chains perceived as decentralized.

Drawback number three: the at least repeatedly reported entanglement of Solana’s success with the operators of the bankrupt exchange FTX. Solana’s promotion by the now-convicted Sam Bankman-Fried and his crypto platform FTX still hangs over the project as a negative factor. But no one can choose their fans. In this respect, the accusation is at least questionable.

Drawback number four: the competition is not sleeping. When Solana launched in 2017, it was considered incredibly fast, but now there are much faster blockchains. Solana’s hopes rest on the Firedancer update being able to multiply transaction speed to keep up with new competitors.

Drawback number five: the explicit mention by the SEC. Many market participants certainly have not forgotten that in July 2023, the U.S. Securities and Exchange Commission classified Solana as a security, alongside coins like ATOM, ALGO, MATIC, and others. This could still lead to problems in the future.

The SEC Factor

Overall, the SEC and its legal decisions are perhaps the most powerful factor regarding the success or failure of global digital currencies. These decisions are based on an understanding of digital assets that can be described—at best—as traditional.

While the European Union has created the MiCA regulation to regulate complex digital assets, across the Atlantic, cryptocurrencies are still legally viewed as either iron ore (commodity) or a Coca-Cola stock (security). The perceived unpredictability of SEC decisions hangs over some cryptocurrencies, including Solana, like a Damocles’ sword.

Memecoin What Purpose Does Donald Trump’s Cryptocurrency Serve?

Bitcoin and Ethereum are by far the largest cryptocurrencies in the world, yet they operate in entirely different ways.

Smart Finance The Difference Between the Cryptocurrencies Bitcoin and Ethereum

Solana: Frog or Prince?

Among the so-called “Ethereum killers,” or blockchains that could succeed Ethereum as Bitcoin’s heir, Solana remains the most promising candidate despite all adversities. This is because competitors also have their respective problems. For example, the BNB chain still ranks one place ahead of Solana in terms of market share.

However, most market observers lack the imagination to recognize an alternative champion. Crypto enthusiasts too closely associate this blockchain with Binance and the fate of the crypto platform. After the trial against founder Changpeng Zhao, the star appeal of the project and coin has given way to great disillusionment, even though the BNB blockchain is technically capable and operates independently of Binance.

Then there’s Cardano (ADA), but it also seems to be faltering. The accusation: The endeavor has become too intellectual, too much science, too little practical use. The brilliant founder Charles Hoskinson regularly defends himself eloquently against all accusations. Nevertheless, it lacks momentum. Cardano is at risk of dropping out of the top 10.

Perhaps it’s Avalanche (AVAX), Polkadot (DOT), or NEAR Protocol (NEAR) that will challenge Ethereum in the next bull run. Unless a completely new project manages to surge forward with the momentum of the unspent and challenge Ethereum to a duel.

The Solana Phone

One thing Solana has, at least so far, exclusively: its own phone. Many see the announcement of Solana’s Web3 phone, Saga 2, as a clever move in the race for crypto supremacy. It is already available for pre-order and is set to be delivered in 2025.

There are already highly adventurous rumors about the possible advantages and rewards of the Solana phone. If even half of them are true, there will surely be new tailwinds for Solana.

All tips and information mentioned in the text do not constitute investment advice or a recommendation to buy or sell securities (§ 85 WpHG).

This article is a machine translation of the original German version of TECHBOOK and has been reviewed for accuracy and quality by a native speaker. For feedback, please contact us at info@techbook.de.