To truly compare Ethereum and Solana, one must begin with their origins. Ethereum, the second largest cryptocurrency, was proposed in 2013 and launched in July 2015 by Vitalik Buterin and several co-founders, including Gavin Wood, Anthony Di Iorio, and Charles Hoskinson. It was born out of the limitations they observed in Bitcoin’s scripting capabilities. Buterin envisioned a blockchain platform capable of supporting more complex applications beyond the simple transfer of value like peer-to-peer contracts and decentralised applications. Ethereum introduced the concept of "smart contracts," allowing developers to create decentralised applications and manage assets via its native cryptocurrency, Ether (ETH). Ethereum's ability to enable decentralised finance (DeFi) and non-fungible tokens (NFTs) helped it become the go-to blockchain platform for developers.

Meanwhile, Solana was launched in March 2020 by Anatoly Yakovenko and Raj Gokal. Yakovenko, a former engineer at Qualcomm, sought to solve Ethereum's scalability issues. Solana’s primary goal was to create a high-performance blockchain capable of processing thousands of transactions per second with low fees. It quickly gained traction in decentralised applications and attracted a growing developer community, positioning Solana as the fourth-largest cryptocurrency by market capitalisation. 

Unlike Bitcoin, which was created as an alternative to traditional fiat currency, Ethereum and Solana serve additional goals. Users pay a fee in Ether or Solana to perform actions on their respective networks. In other words, both Ethereum and Solana are programmable blockchains that provide developers with the ability to use their decentralised infrastructure to create projects, a feature that Bitcoin does not offer.

Ethereum transitioned from a Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS) in 2022 with the "Merge" upgrade. PoW, used originally by Bitcoin and Ethereum, involves miners solving complex mathematical puzzles using computational power to validate transactions and add new blocks to the blockchain. This process is energy-intensive, it requires substantial hardware and electricity. In contrast, PoS replaces miners with validators who lock up a certain amount of cryptocurrency as collateral. Validators are selected to propose new blocks based on the amount of cryptocurrency they have staked, rather than their computational power. Users must stake a minimum of 32 ETH to become a validator in Ethereum's PoS system. PoS offers several benefits, including greater energy efficiency, lower hardware demands, reduced centralisation risks, and enhanced security through validator incentives.

Solana goes one step further with a hybrid consensus mechanism that combines PoS with Proof of History (PoH). PoH introduces the concept of timestamping, through a Verifiable Delay Function (VDF) that generates timestamps for each transaction. This allows the network to verify the time elapsed between events without extensive communication between nodes. Additionally, PoH uses a sequential preimage-resistant hash function to link hashes together, each hash depending on the previous one. This process creates a chain where altering any hash would require recalculating all subsequent hashes, thus strengthening security and integrity. The combination of PoS and PoH enables Solana to achieve high throughput, processing thousands of transactions per second with low fees.

Both Ethereum and Solana share a similar fee structure, consisting of a base fee and a priority fee, but the way these fees play out is quite different. On Ethereum, the base fee is burned, creating a deflationary effect on the supply of ETH as more transactions occur, which could potentially drive up the price over time. However, the gas fees on Ethereum can be unpredictable, often fluctuating based on network congestion. Ethereum’s average transaction fee typically ranges between $3 and $10, though during times of high demand, fees can spike, complaints about gas fees reaching $50 or $100, even for minor transactions, are commonly seen on social media. This can be especially frustrating for smaller transactions, where the fee might end up outweighing the transaction itself.

On Solana, 50% of all fees, whether base fees or priority fees, are burned and fees are consistently low, usually just a fraction of a cent, thanks to the high transaction throughput enabled by its PoS-PoH consensus mechanisms. A typical Solana transaction costs around 0.0001 SOL, equivalent to approximately $0.00025. This makes Solana ideal for microtransactions and frequent interactions.

Scalability, a crucial aspect of decentralised networks like blockchains, refers to the ability of a blockchain to handle a growing number of transactions without compromising performance. Both Ethereum and Solana are working on scalability, in different ways. Ethereum’s infrastructure supports approximately 15 transactions per second, often leading to network congestion. To address this, Ethereum, with its larger ecosystem, is leaning on Layer-2 solutions and sharding to improve performance and reduce congestion. Ethereum’s Dencun upgrade incorporates danksharding, a technique that divides the blockchain into smaller segments. This approach is expected to reduce gas fees and improve the overall efficiency of the network. In contrast, Solana’s architecture is designed for high scalability from the start, PoH enables Solana to process transactions much more efficiently than traditional consensus mechanisms by eliminating the need for every node to validate the order of transactions, leading to significantly faster processing times. The network is theoretically capable of processing up to 65,000 transactions per second, today one of the fastest blockchain available. Expected to launch in 2025, the upcoming Firedancer validator client aims to further boost this capacity, potentially processing up to 1 million transactions per second.

The comparison between Ethereum and Solana reveals two leading blockchains, each with distinct strengths and weaknesses. Ethereum’s well-established ecosystem, supported by ongoing upgrades, continues to dominate the DeFi and NFT sectors, while Solana’s focus on high-speed, low-cost transactions is redefining blockchain scalability. Both platforms are actively evolving, working to overcome their respective challenges to better meet the needs of users and developers. From an investment point of view, both cryptocurrencies can be interesting and benefit from the era of deregulation with the arrival of Donald Trump back in office.