Solana and Cardano are shaping up to become the new preferred payment options. This means they are potentially likely to take a big share of the Visa, Mastercard, and PayPal markets.
Let’s take a closer look…
Transaction Fees and Transfer Time
Earlier this year, Visa and Mastercard raised their fees by a small percentage. PayPal has some of the lowest fees at about 1.85%. While these can seem to be small charges, they can easily eat into the profits of major companies and stores. This is because such businesses make frequent transactions. Businesses with small margins like restaurants have especially experienced a major reduction in profits as a result of this fee increase.
With Solana Pay, users only need to pay a fee of a fraction of a US cemt. This is a negligible amount and will not have a noticeable impact on the profits of companies. ADA fees are also negligible, even though they can go up to 2 cents. This fee fluctuates depending on market forces.
Another major benefit of these two cryptocurrencies is that their transactions move in seconds. Visa and MasterCard have to take a lot of time to complete payments since the transfers need to be confirmed by banks.
PayPal is another major payment service that is losing a big chunk of its customer base. This is because it recently published a controversial update to its acceptable use policy. As per this update, PayPal could hold up to $2500 from the balances of customers who published unpopular opinions online. On the 10th of October, Google searches for ‘how to cancel PayPal’ were trending according to Market Watch. PayPal later removed this update. However, this was after a lot of damage had already been done.
Influential figures like Elon Musk and the former president of PayPal David Marcus even called out the company. This backlash led to a significant drop in the share price of PayPal. Still, Paypal is great for crypto site deposits, and is already supporting over 12 different exchanges.
Solana (SOL) and Cardano (ADA) are likely to take the market of PayPal since these services are more decentralized. That means it is impossible for users to be locked out of their funds. There is no central authority to create laws that can affect the balances of the users’ crypto wallets. It is also extremely difficult for the public to trace a person’s crypto wallet as these can be named by an alias. That means anyone can transact with these cryptocurrencies and say whatever they want online without risking the loss of their funds.
As a user of these altcoins, it’s wise to store some of your coins in your own wallet. You should avoid storing 100% of your funds in exchanges as a good practice, as breaches happen. Although losing your funds is incredibly rare.
Solana vs Cardano
Both of these altcoins were born because of the Ethereum network’s scaling issues, and they were meant to compete with the second-largest cryptocurrency. Even with the completion of the Ethereum Merge, these two cryptocurrencies are highly recommended for regular financial transactions. This is because they are able to combine low fees with instant transfers.
The Solana Network is able to process 50,000 transactions per second, and users only need to pay transfer fees of a fraction of a penny. This is virtually a fee of about $0. The network is able to achieve this level of scalability because of the use of the proof of stake and proof of history methods. With proof of history, transactions can be sped up as there is no need to include time stamps on the blocks. The introduction of Solana Pay meant that merchants and buyers could conveniently trade. It allows consumers to use a QR code at checkout, and this helps to speed up the process even further.
While it offers many benefits, this network is not perfect. It has experienced some outages since it was launched. In August 2022, hackers were also able to steal $8 million from about 8000 SOL wallets. While the cause of the breach isn’t known, it doesn’t appear that the network itself was compromised. It’s more likely that private key information was leaked from Slope, an application monitoring service. The network has great potential, and developers are strongly focused on tightening security.
Cardano is now the eighth most-popular cryptocurrency, meaning it is a little more popular than SOL. The coin also uses the proof of stake consensus mechanism and is able to complete transfers in less than a minute. It can process 250 transactions per second. The fee for ADA is a little higher at about a penny or two. The benefit of the Cardano Network is that it hasn’t experienced hacks and breaches like Solana.
You can learn more about these specific cryptocurrencies on their dedicated pages at Crypto Lists.