Cryptocurrency Solana (SOL) wasn't born yesterday. It actually launched back in 2017. But its popularity is rather new. Solana started the year at about $1.50. Since, it's surged more than 12,000%. And with a market value of more than $58 billion, it's become the world's fifth-biggest cryptocurrency.
This impressive performance might make us confident about the Solana story. But it also may make us a bit wary about investing in this player right now. After such a massive gain in just one year, is there much potential left for 2022? Let's take a look at whether it's too late to buy Solana.
A complete crypto package
First, why are investors piling into Solana? Solana is the complete crypto package: It offers its own currency -- known as SOL -- and it's a blockchain hosting hundreds of decentralized applications (dApps). It's also becoming a major player in the world of non-fungible tokens (NFTs).
Solana investors can use SOL for trading, they can hold on to their investment, or they can stake their holdings for passive income. That's not much different from other cryptocurrencies. But Solana does stand out when it comes to its other uses.
The cryptocurrency is known for speed, low transaction costs, and energy efficiency. Solana can handle up to 50,000 transactions per second. By comparison, crypto giant Ethereum processes about 30. And Solana's average transaction fee is a fraction of a cent. A reason for Solana's speed is the way it validates transactions on its blockchain. It uses a proof-of-history method that marks data to be processed with a timestamp. That way, validators can quickly sort blocks of information.
Solana's methods also make it a green crypto. A single transaction uses less energy than what's required for two Google searches.
More than 400 projects
When it comes to dApps, Solana also is making its mark. The cryptocurrency has more than 400 projects built on its blockchain. These are in various areas, from finance to gaming. Right now, that's a lot fewer than the 2,900 built on Ethereum. But the points I mention above should keep developers building on Solana. And Solana could catch up to its bigger rival.
Solana already has soared in popularity in the buying and selling of NFTs. Over the past 30 days, Solana is the third-biggest blockchain by NFT sales volume, according to CryptoSlam. It was in the fifth spot just a few months ago. An NFT is a certificate of ownership for art, virtual sports tokens, and other collectibles.
Now that we know why investors like Solana, let's get back to our question: Is it too late to get in on this growing cryptocurrency? No. And here's why. The key word is "growing." Solana's growth in real world uses like dApps and NFTs has just gotten started. There should be a lot more to come. Solana's speed, low cost, and energy efficiency are reasons why users may continue to flock to this blockchain. If that happens, the value of this crypto player may continue to grow -- even after this year's show-stopping performance.