Solana operates on a very strong network from a technical perspective.
Solana's network employs not only a proof-of-stake consensus mechanism, but also a proof-of-history mechanism.
The network has significant real-world utility.
Solana (CRYPTO: SOL) is one of the largest cryptocurrencies in the world and has delivered superb returns for investors over the years. The cryptocurrency has increased by over 4,113% in the past five years, outperforming most assets during a strong period for the market.
Solana operates on one of the most technically sound networks in the entire sector. The system operates on an energy-efficient proof-of-stake (PoS) consensus mechanism, where investors stake their tokens in exchange for the opportunity to validate transactions and earn rewards in the process.
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A few networks operate on PoS, but Solana's network takes it a step further and also runs a proof-of-history (PoH) consensus mechanism that essentially time-stamps transactions. This removes a key inefficiency that has proven to be a bottleneck in many other blockchain networks, as validators must agree on the order of transactions. This is one factor that gives Solana the potential to process tens, if not hundreds, of thousands of transactions per second (TPS).
While Solana has already performed well, here's one reason to consider buying it before 2030.
Due to its technical prowess, Solana has tremendous real-world utility. Recently, Western Union tapped the network to run its U.S. dollar stablecoin on. The goal is to provide more options for key stakeholders to move money while also enhancing Western Union's treasury management capabilities.
JPMorgan Chase, the largest bank by assets in the U.S., also recently conducted a U.S. commercial paper debt issuance on Solana, one of the first debt issuances ever conducted on a public blockchain.
I expect Solana's network to be utilized in many more real-world scenarios, which should drive long-term demand for the token and ultimately increase its price.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and Solana. The Motley Fool has a disclosure policy.