Crypto Wrap: Solana Plunges On Network Outage

Cryptocurrency prices edged higher this week, led by gains in bitcoin and ether. A rocky start to the bitcoin-as-legal-tender era in El Salvador pushed prices for the world’s most valuable cryptocurrency sharply lower last week.

But buyers stepped in, keeping the rout from becoming something bigger. Between last Friday and this Friday, bitcoin climbed from $45,000 to $47,500. At the same time, ETH rebounded from $3,250 to last trade around $3,450.

Prices for both coins are well above their summer-time lows, but still have a ways to go to reach their all-time highs set this spring:

Bitcoin

Ether

Solana Summer Winds Down
While bitcoin and ether consolidate, another coin went on a wild ride this week. Prices for SOL, the native cryptocurrency of the Solana blockchain platform, plunged 20% this week due to a 17-hour network outage.

According to various reports, the outage was the result of a flood of transactions that overwhelmed the network. Bots attempting to participate in an initial token offering pushed transactions per second on the network to as much as 400,000—way above the 65,000 transactions per second Solana can handle. Unable to cope with the load, the network effectively shut down until a software upgrade was released.

The incident reflects the growing pains of a young blockchain platform that many have high hopes for. While considered less decentralized than Ethereum, Solana can currently process far more transactions per second—65,000 versus 15.

Nevertheless, even the highly scalable Solana couldn’t keep up with this week’s load. It remains to be seen whether the new software upgrade will prevent future traffic spikes from overwhelming the network.

The recent outage has taken some of the wind out of SOL’s sails, though notably, prices for the cryptocurrency are still up a whopping 76x from where they started the year.

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2