Visa endorses Solana: Low-cost, scalable, in stablecoin pilot!

Kapil334

While Solana has had its share of hiccups in the past, its infrastructure is still highly regarded by Visa.

Why does Solana have the potential to become a mainstream payment network? Visa emphasizes that they have been closely monitoring new blockchain scalability-related technologies and are excited about Ethereum's progress in layer-two scaling solutions.

While Visa believes that the payment ecosystem may adopt multiple blockchain networks, they see Solana as one of the networks with the potential to drive blockchain into mainstream payment mechanisms, including transaction speed, cost, and scalability.

In addition, Solana possesses several key features that help it become a mainstream settlement network for stablecoins like USDC, and Visa points out five significant reasons:

1. **Visa-scale Transaction Throughput:** Transactions Per Second (TPS) for various entities are as follows:
   - Visa: 65,000 TPS
   - Ethereum: 12 TPS
   - Bitcoin: 7 TPS

   Although Solana's 400 TPS is still far from Visa's level, it can reach over 2,000 TPS during peak times, which is sufficient for payment testing and pilot programs.

   Solana's architecture is designed with high transaction throughput in mind, allowing for parallel transaction processing, significantly improving network efficiency. Unlike blockchains like Bitcoin and Ethereum that process transactions sequentially, Solana's architecture enables the simultaneous processing of multiple transactions, helping prevent network congestion and performance degradation.

2. **Predictable and Lower Transaction Costs:** Solana's transaction fees are usually less than $0.001 and are predictable. This makes Solana an attractive payment network for exploring existing payment businesses and further reducing costs. Visa notes that Solana stands out in transaction costs compared to Bitcoin and Ethereum. The latter two may experience unpredictable fluctuations due to surges in transaction demand, making it challenging for payment companies to manage their products and potentially leading to a confusing consumer experience.

   Solana also handles network congestion differently; it has a localized market for transaction fees. If there is a surge in demand for specific asset categories such as NFTs, the transaction costs for NFTs may temporarily rise while transaction costs for other asset categories on the chain remain unchanged. This makes Solana's fee market significantly different from the unified fee market of other public blockchains.

3. **Consumer Expectations of Transaction Finality:** Blockchain transaction finality refers to the state where transaction data is written to the blockchain and becomes irreversible. Visa believes that transaction finality is as important as TPS, and Solana excels in this aspect.

4. **High Availability:** Solana had 1,893 active validators and 925 RPC nodes as of July 2023. Visa considers a blockchain's availability to be measured through the number of validators and nodes. A large number of nodes can bring more flexible fault tolerance to the network, especially when some nodes encounter issues or go offline. As long as a sufficient number of nodes are online, the network can continue to operate without data loss.

In summary, Visa sees Solana as having unique technical advantages, including high throughput through parallel processing, low transaction costs with localized fee markets, and resilience from a large number of nodes. These factors contribute to a scalable platform with compelling value propositions for payment applications.

Visa emphasizes that these are the reasons they decided to include Solana in their expanding stablecoin pilot program. In the future, as they conduct tests, they will focus on whether Solana has the capability to meet enterprises' financial operational needs.

Janak9955

The current trends in NFTs, huh?