Solana (SOL) is a fourth-generation blockchain and cryptocurrency that leverages an open infrastructure to provide greater scalability. The network introduces various new and unique technologies to provide users with unmatched transaction speeds and enterprise-level security. Consequently, the network has seen considerable growth since its introduction in 2017.
What Problems Does Solana (SOL) Attempt to Fix?
There are multiple pain points in the market that Solana attempts to rectify. The network’s architecture was structured to be expandable and resilient to censorship. This trustless and distributed blockchain tackles both transaction settlement speed concerns and bandwidth via this design.
Scalability issues continue to plague the crypto market. Early blockchain’s reliance on the Proof-of-Work consensus mechanism has led to serious congestion issues. Top coins such as Bitcoin and Ethereum were designed to increase transaction fees as the network’s congestion rose. Sadly, this has led to major issues for both of these networks. Ethereum is currently flooded with new projects, partly due to the recent rise in DeFi platforms. Sadly, this congestion equates to more fees and transaction delays for the average user.
Solana avoids these issues by introducing systems that allow the network’s transaction throughput to scale proportionally to its bandwidth. For example, Bitcoin can handle seven transactions per second (tps), Ethereum can handle around twelve. According to developers, Solana is capable of 50,000 tps.
Benefits of Solana (SOL)
It’s easy to see the benefits of a network that can scale up to meet the demands of the global economy. Additionally, this scalability makes Solana a better blockchain for Dapps such as DEXs and staking protocols. Here are some of the top benefits gained when you join the Solana network.
The trustless and distributed nature of Solana makes it ideal for day-to-day commerce. You can conduct global transactions in seconds for a fraction of the cost of the most popular cryptocurrencies. Best of all, since there is no centralized control over the network, there is no one to stop, block, or confiscate your transactions like fiat currencies.
As a delegated staking blockchain, users gain some major advantages over the competition. For one, anyone can secure a passive income staking their SOL on the network. Staking protocols continue to gain popularity in the market because they are easier for new users to learn, and they provide more stable rewards when compared to trading.
How Does Solana (SOL) Work
In order for Solana to accomplish all of its goals, the developers had to think outside of the box. As such, the network is packed with proprietary systems. These systems work in tandem to create an extremely useful and reliable blockchain network.
Solana is a Delegated-Proof-of-Stake (PoS) network. DPoS networks differ from PoS networks in a couple of ways. Both mechanisms utilize Validators to process transactions. Validators are chosen based on their overall holdings in the network. The more SOL you hold, the higher the chances you get chosen as a validator. This strategy ensures that only those vested in the network hold this position.
Validators earn rewards when they approve transactions and add them to the blockchain. Those who aren’t Validators can still secure some easy profits by delegating their holdings to one of the Validators. This system allows everyone to participate in securing the network and allows the users to decide what nodes deserve to validate transactions.
DPoS networks are multiple times faster than PoS blockchains. The average blocktime for Solana is 2.34 seconds. However, bench tests have shown the network can approve blocks in as little as 1.6 seconds. Considering Bitcoin requires 10 minutes to accomplish this task, it’s easy to see why DPoS blockchains continue to gain momentum.
Proof of History (POH)
The POH mechanism serves a vital role in the Solana ecosystem. This protocol increases the efficiency of the blockchain by integrating timestamps in every transaction approval. These timestamps enable nodes to establish the sequence of events. In this way, the system serves as a cryptographic clock for the network.
The Tower BFT system improves network responsiveness by allowing Validators to vote on the state of the ledger. This mechanism also records the previous votes and utilizes them to speed up validation by allowing Validators to simply reference their previous votes rather than running the entire transaction chain. In this way, Tower BFT can be considered an upgraded version of the Practical Byzantine Fault Toleration (PBFT) system found in other DPoS blockchains.
Gulf Stream does away with the mempool concept. A mempool is a waiting area for transactions before they are selected to go in the next block. In Bitcoin, the mempool is used to provide miners a chance to select the highest paying transactions to process first. Gulf Stream introduces a new strategy that allows the network to forward transactions to validators before the current block of transactions is finished with its approval.
Sealevel provides Solana with a major advantage over the most popular smart contract-based networks in use today. Solana uses Sealevel to execute smart contracts that can run in parallel. This system also allows similar smart contracts to leverage the same protocols. This strategy means that thousands of smart contracts can run simultaneously and in parallel without bogging down the network’s performance.
As part of its open hardware structure, Solana incorporates a transaction processing unit known as Pipelining. The protocol works by assigning a stream of input data to different hardware based on its specifications. This system helps to improve block validation times.
Turbine is another proprietary technology introduced by Solana. This blockchain broadcasting protocol takes important data and breaks it into smaller pieces. These packets can be sent to nodes faster and using less bandwidth.
Cloudbreak is the Solana network’s account database. This system improves on previous iterations by allowing the system to read and write data at the same time. Cloudbreak works in tandem with the Pipelining and Archivers protocols.
Archivers serve a crucial role in terms of data storage. They are hardware-based storage mechanisms that enable faster access to crucial network information. Specifically, Validators can pull up the transaction history of the network directly from Archivers.
SOL is the native token of the Solana network. This versatile cryptocurrency enables users to earn passive rewards through the network’s delegated staking options. Notably, SOL is hard-capped at 489 million coins.
History of Solana (SOL)
The history of Solana begins in 2017. It was at this time that Anatoly Yakovenko founded the project. He quickly partnered with Greg Fitzgerald and Eric Williams to accomplish his goal of creating an infinitely scalable blockchain. Notably, Yakovenko leveraged his past experience as a Dropbox engineer to help Solana achieve its hefty goals. Today, Solana is recognized as an advanced fourth-generation blockchain.
Shortly after its introduction, Solana partnered with another up-and-coming blockchain protocol Serum to create a DEX. Serum utilized the advanced system Solana created to develop a non-custodial spot and derivatives exchange. The DEX was met with excitement from the crypto community due to its new features. Specifically, Serum created an on-chain central limit order book (CLOB) that updates every 400 milliseconds to ensure the most accurate pricing for traders.
How to Get Solana (SOL)
It’s not difficult to find SOL. The token is popular and is found on most altcoin exchanges. In terms of trading volume, Binance is the best option. Its SOL/USDT trading pair is very popular. Of course, you can also get this coin on Serum’s DEX and other popular platforms. Unfortunately, there are no fiat trading pairs available, so you will need to first convert your fiat over to BTC, ETH, or USDT to get SOL.
How to Store Solana (SOL)
Storing your SOL is easy as well. The project’s developers specifically recommend the Trust Wallet. This mobile wallet is available as a free download on both Apple and Android. Coin98 is another recommended mobile selection that offers a bunch of cool features to simplify your storage needs. Of course, the safest option is a hardware wallet.
The Ledger Nano S and X both support the storage of SOL. They also allow you to stake your coins directly from your hardware wallet. This approach provides you the highest level of security and rewards for your participation in securing the ledger.
Solana – A Technological Leap
Solana is one of the most advanced blockchains in operation currently. The developers behind this project succeeded in creating a network that could surpass today’s payment processors in terms of tps and functionality. As such, you can expect to see more developers make the switch over to Solana as their original blockchains continue to suffer scalability concerns.