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After rising by more than 900% last year, Solana (SOL 4.46%) might be the most deserving to hold the title of crypto's 2023 MVP. Yet, while the digital currency's monumental resurgence provided a much-needed respite after it fell to as low as $8, Solana's long-term prospects pale in comparison to one of crypto's household names: Ethereum (ETH 2.73%).

Here's why investors would be remiss to overlook Ethereum's potential while the market's focus remains elsewhere.

Image source: Getty Images.

In 2015, Ethereum arrived on the crypto scene with a bang. At the time, it was the first blockchain that allowed developers to build custom decentralized applications via smart contracts -- transactions that self-executive when certain terms are met -- making Ethereum the first programmable cryptocurrency.

Ethereum's pioneering of smart contracts meant that the majority of innovative crypto uses initially found a home on its blockchain. Things like non-fungible tokens (NFTs), decentralized finance (DeFi), and much more all started on Ethereum and represented a seismic shift in the trajectory of crypto's capabilities.

But like any iteration of technology, new versions eventually arose. Enter Solana. Building off of Ethereum's efforts, Solana arrived in 2017 offering developers and users a faster and cheaper alternative to Ethereum.

Fast-forward a few years, and Solana has assumed the title of Ethereum killer, gaining significant traction in the crypto economy thanks to its blazing speeds and extremely low fees. Today, it is the fifth-most-valuable cryptocurrency on the market with a total valuation of $41 billion.

Solana's rapid rise to become one of the most valuable cryptocurrencies has brought a wave of hype with it. Yet even with this, Ethereum remains nearly six times as valuable and supports 20 times more value across the DeFi economy.

While Solana optimists might paint a different picture, the reality is that Ethereum remains the epicenter of the decentralized economy. It has the largest developer community, has a proven track record of functionality, and continues to implement upgrades that will further increase the network's capabilities.

Most importantly, these upgrades are part of the reason Ethereum is poised for a run in 2024. In the second half of the year, Ethereum will launch EIP-41844, an upgrade that will lower transaction fees and increase its throughput.

For the entirety of Solana's existence, its primary advantage was that it is a cheaper and faster version than Ethereum. But what will happen if Ethereum levels the playing field?

With increased efficiency and scalability, the number of uses Ethereum can support will likely increase. Since one of the primary ways a cryptocurrency is valued lies in the utility it provides, EIP-41844 could bring new value to Ethereum's long-term prospects.

Best of all, though, EIP-41844 is just one of a series of planned upgrades over the coming years. Subsequent improvements will introduce new functionality such as greater security, increasing decentralization, and further streamlining of the network.

In totality, Ethereum's future upgrades hold the potential to solidify it as the most valuable smart-contract blockchain and squash any competition.

Like many markets in the world today, the DeFi economy will likely have several competitors. Take the smartphone market as an example. While Androids make up more than 80% of the global market, Apple's iPhone still holds a considerable portion.

A similar future in crypto is likely: one where Solana and Ethereum coexist, with each offering developers and users different options. However, when deciding which of the two is poised for a significant run, Ethereum looks more promising, especially over the long haul.

While Solana ran up more than 900% in 2023, Ethereum witnessed a measly 90% jump. As the second-most-valuable cryptocurrency on the market and home to more decentralized applications than any other blockchain, this lack of performance suggests that Ethereum has a bit of catching up to do.

Fortunately, Ethereum is no stranger to significant growth. During the last bull market, it rose by nearly 2,000% when it skyrocketed from around $200 to more than $4,800 over a year and a half. Whether a similar scenario unfolds remains to be seen.

But when considering the potential that will accompany EIP-41844, as well as future upgrades, don't be surprised if Ethereum becomes one of the best performers in your portfolio for years to come.

See more here:

Forget Solana, This Cryptocurrency Is Poised for an Incredible Run in 2024 - The Motley Fool