Ethereum, Solana or something else? Kwebbelkop’s NFT blockchain selection manual

If you’re reading this, you’ve probably mastered the basics of non-fungible tokens (NFT). You know what it is, what purpose it serves, and you may have picked up a beautiful piece of art yourself! A question I still get very often: which blockchain is best to buy an NFT? Ethereum, Solana, Polygon, Binance Smart Chain, there are so many blockchains that sometimes you can’t see the forest for the trees. Today I explain them so you know exactly what is right for you. Let’s do it!

What is blockchain and why is it important for NFTs?

Blockchain is the mechanism behind the authenticity of NFT. Each NFT is a kind of unique cryptocurrency. The fact that it exists is recorded in the code on the blockchain. It’s like transferring money via a little bit: you send your money, and a bank decides that it’s your money and you can send it. Blockchain also verifies this. This information is accumulated in so-called blocks. Think of it as a Word document that grows a paragraph every time something new happens. All these sections together form a chain of information, and voilà!

Now you might be wondering: “But Jordi, if it’s so simple, why is there a choice between different blockchains?” Unfortunately, the answer to this is exactly where it gets very technical and complicated. This is the validation mechanism. An extreme simplification of this concept is that the way the “sections” are made is different from the blockchain. I know that sounds vague, but I’ll get back to that later.

In order to make the choice between the different blockchains, there are a number of considerations that you as a buyer or seller must make. A number of aspects that differ from blockchain include speed, market size, cost and energy consumption. In addition, there are dozens of small differences, but these will not do much for the average user. Let’s take a look at the possibilities.

Ethereum most popular for NFTs

Generally, Ethereum is seen as the king of NFTs. Ethereum is the most popular platform for trading NFTs and currently has an astronomical trading volume of $30 billion. The Ethereum blockchain has by far the largest market, and is the most supported in all digital applications. Well known NFT projects like Bored Ape Yacht Club, Crypto Punks and you name it, are on this blockchain. So why this blockchain? Simply because Ethereum has the largest market share. No less than 90% of all digital goods are traded on the Ethereum blockchain. Launching a collection on this platform simply offers the best opportunities.

But what are the disadvantages of Ethereum? The first and biggest disadvantage is that it uses a lot of energy. NFTs receive a lot of criticism, and the high energy consumption is one of them. Ethereum uses a Proof of Work (PoW) mechanism and is one of the validation mechanisms I talked about earlier. To validate an NFT on the blockchain, a complicated puzzle must be solved. This is done by powerful computers that use a lot of energy. This is called mining and in return miners are paid in ether, the so-called gas parties. This brings us directly to the other downside of Ethereum: the cost.

Ethereum is incredibly expensive when it comes to transactions. Depending on how busy the network is, a single transaction on Ethereum can quickly cost you tens to sometimes hundreds of euros. This makes it simply too expensive for smaller projects and buyers with smaller budgets to trade on the Ethereum network. The prices of the transaction are sometimes higher than the price of an NFT.

Solana strong up and comes in NFTs

But what are the alternatives? Solana, with SOL as currency, is the second largest blockchain for NFTs after Ethereum. Solana is one of the fastest blockchains out there and, unlike Ethereum, uses a Proof of Stake (PoS) mechanism. In this mechanism, SOL holders approve the transactions. The advantage of this is that it works extremely fast and uses minimal energy. This makes the use of Solana much cheaper. Transactions cost a few pennies and are approved within milliseconds. This, in combination with the low energy consumption, makes Solana extremely popular and therefore a good alternative to Ethereum. Solana has also recently been added to the popular NFT marketplace Opensea, making it more accessible than ever.

The downside of Solana is that the market is still significantly smaller than Ethereum. The Solana network is also sometimes somewhat unstable and has failed several times in recent years. Certainly in the moments of a project launch, this can be a huge downer.

Other Blockchain Alternatives to NFTs?

But are there other alternatives? Yes, but the question is whether you should start with this. Tezos (XTZ), Fantom (FTM), Binance smart chain (BSC) and Worldwide Asset Exchange (WAX) are all blockchains that have just built their market. They are all a little different. Are these blockchains good? Absolutely. Do you want to use these blockchains? It depends on.

These blockchains all work, generally secure and have talented artists on them. However, the chance that you can make a pretty penny from your NFT on one of these blockchains is much less, and it is also much more difficult to launch and sell a collection on these blockchains. Are you only in the NFT world to make money? Then Ethereum or Solana is a better option for you. Are you just interested in NFTs? So take a look at these blockchains. By the way, Ethereum is also switching to PoS in September, and that should reduce costs and consumption at a later date.

A whole lot of information to absorb, but one thing is certain: you now have the basics down. Make sure you read carefully before you start playing with a blockchain, the internet is your best friend in this. There is a lot more information to gather that will make you a smarter investor in the NFT world.

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