The limits that Ethereum (ETH -4.55%) has on how it can scale today could be a serious challenge that allows competing blockchains to more fully develop in its place. In this Motley Fool Live segment from "The Crypto Show," recorded on April 20, Fool.com contributor Travis Hoium talks about the advantages Ethereum has over Solana.
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Travis Hoium: The fact that Ethereum has limits on how it can scale today, and that's going to be a challenge and basically allow competitors, competing blockchains, to more fully develop. And you know Ethereum had such a big lead 9 months, 12 months ago that it seemed unfathomable that anybody -- let's just take NFTs as a good example, because that's where a lot of the development is happening. Ethereum was where you went for everything. It was the place to go. OpenSea numbers was what was quoted by everybody in the media, because that's where all the volume was. Well, guess what? From a transaction basis, there are more transactions on Solana today in NFTs than there is in Open Sea.
So we're already seeing that, if the innovation is happening elsewhere, if the building is happening elsewhere, that's what going to make -- we talked about the digital economy earlier. If Ethereum's digital economy is limited because of this inability to scale, then competitors are going to come in and say, "hey we will answer those challenges" and people will build there. And I think that's, long term, what makes me a little more bearish on Ethereum and a little more bullish on Solana. You know, I have a bullish position in both, but I think it may be limited as to what Ethereum's value is going to be. I think we can maybe see -- hey, maybe the high-end projects stay on Ethereum. But those projects that are going to sell something for $5, or you know, need a transaction cost that's a fraction of a penny, that stuff's gonna move to Solana or another blockchain. I'm using that you know sort of as a stand-in, because they're the leader right now, but you know blockchains that are built for that. So to me, that's the worry if I was really bullish on Ethereum is that every delay gives the competition more time to catch up and maybe pass them in some ways.