What’s the appeal of low-fee networks like Solana? Probably because they have low fees. Sarcasm over, if you look at the Solana price, it is currently at $174.27, up 17.98% in the last week and 38.93% in the previous month at the time of writing.
The low network fees obviously aren’t the only thing keeping the network going. Going back five years, Solana has experienced a 27,385% increase in its price. It’s the sort of network that’s reliable, fast, scalable, and with great potential.
Solana isn’t the only one. Other low-fee networks, like XRP and Avalanche, are thriving. Read on to find out why.
The Low Fees Are a Massive Contributor to Network Popularity
Well, we might as well start with this. We mentioned it in the introduction, but obviously, this is one of the reasons why these networks are so popular.
Let’s compare it with Ethereum. Ethereum, despite improving over the years, is still known to be one of the most expensive networks. The network fees for Ethereum fluctuate massively. The latest numbers showed $0.6593 per transaction, whereas Solana averages around $0.00025. Bitcoin is actually worse. At the time of writing, fees for the network were at $1.385. You can’t compete with those numbers, Ethereum and Bitcoin.
Bringing another popular network into the analysis, XRP transaction fees were $0.0016 at the time of writing. Slightly more expensive than Solana, but still affordable.
Naturally, people will look for a network where they’re spending significantly less per transaction.
Cost-Effective for Development and Users
Solana and the other networks we keep mentioning, like XRP, are a playground for developers. It’s not only that they’re cheaper; it’s that they’re faster and easier to use (we’ll go into that in the next section).
One particular area where this type of low-fee network is drawing interest from developers is AI. Then again, isn’t everything attracting the attention of AI development now? The difference between other projects and AI is that a lot of AI works in real-time. Applications run on language learning models that are constantly learning and evolving. Something that’s constantly learning and evolving, and pulling from a network like Solana could be expensive if it were on another network. More development is more usage, and more usage is more money.
And, we don’t need to keep mentioning it, but obviously, low-fee networks are more effective for the everyday user making trades.
Low-Fee Networks Are Often Faster
These low-fee networks always seem to be faster. We’ll compare Solana to Ethereum and Bitcoin again as an example.
The current statistics from the Solana website show the network can handle 4,555 transactions per second (TPS). We can’t lie and say Ethereum is awful; it has made massive progress since it introduced its ‘Layer 2‘ feature, but it’s still nowhere close to Solana. The latest figures show Ethereum can manage 15.47 TPS. Bitcoin is even further down the list, only managing 4.78 TPS.
Interestingly, Solana actually has the #1 top spot for transaction speeds, followed by ICP and Base.
What does faster networks mean? More convenient, they’re easier to use and a more ‘normal’ network experience relevant to ‘real-world’ financial transactions that happen in seconds. No waiting around for an hour or two or sometimes more, depending on how busy the network is, like with Bitcoin and Ethereum.
Mass Adoption With Scalability
Mass adoption with scalability is always the appeal, especially if we look into how these digital currencies and networks could begin to integrate into mainstream financial institutions and networks.
People and organizations will have nothing to do with a network if it can’t be easily scaled into their existing network. It’s a major barrier to adoption right now. Financial institutions and ‘real-world’ businesses, for example, simply can’t scale digital currencies and blockchain networks into their system as easily as standard applications not hosted on blockchains, because the mechanisms of control and function are too different.
Still, the idea behind low-fee networks is mass adoption and scalability, at least in terms of cryptocurrency and blockchain networks. The lower the fees and the faster they work, the more likely users are to join and enjoy the network. If a network like Solana is to match the adoption and scalability of mainstream banking organizations like Visa or PayPal, it has to have the capability to handle millions of transactions per minute. It’s not quite there yet, but it’s still good.
Better User Experience
Everything is faster, smoother, and significantly less frustrating compared to Ethereum or Bitcoin. You don’t have to pay outrageous fees just to move a few dollars. You don’t have to sit around twiddling your thumbs waiting for a transaction to confirm, either. Everything we’ve discussed so far summarizes a better user experience.
It might seem simple, but small things like this are a huge deal for everyday users. When you can send or receive money in a few seconds without losing a chunk of it to fees, you naturally want to stick with that network. Plus, the user interfaces sitting on top of these networks, like wallets and dApps, are built with speed and cost in mind. Developers know users expect the same seamlessness they get when they tap their card at a store or transfer money through PayPal.
Solana, XRP, and Avalanche: they are not popular by accident. Low fees, lightning-fast speeds, and scalable infrastructure give them the upper hand against giants like Bitcoin and Ethereum. The crypto world is no longer just about who was here first. It’s about who can deliver an experience that actually works in the real world.
