Solana

Solana

As demand for Ethereum, the most used blockchain network, has surged in 2021, other projects have emerged in an attempt to compete. Among them is Solana, a blockchain with a native cryptocurrency called SOL, used to pay transaction fees and staking. SOL also gives holders the right to vote in future upgrades.

Solana is a crypto computing platform aiming to achieve high transaction speeds without sacrificing decentralization. It employs novel approaches, including the "proof of history" mechanism.

History of Solana

Created in 2017 by Anatoly Yakovenko, a former executive at Qualcomm, Solana implements an innovative hybrid consensus model that combines a unique proof-of-history (PoH) algorithm with the lightning-fast synchronization engine, which is a version of proof-of-stake (PoS). Because of this, the Solana network can theoretically process over 65 000 transactions per second (TPS) without any scaling solutions needed.

Solana blockchain was rolled out during the 2017 initial coin offering (ICO) boom. The project's internal testing results were released in 2018, followed by multiple testing phases leading to the eventual official launch of the main network in 2020.

In 2021, SOL gained 12 000%. Now Solana is the sixth-largest cryptocurrency, with a market capitalization of over $30 billion and an all-time high of $250.

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What makes Solana unique?

When Satoshi Nakamoto invented Bitcoin more than a decade ago, it solved a tricky problem: how to make it possible for strangers anywhere in the world to make financial transactions over the internet without a payment processor like Visa or PayPal in the middle.

The technology that makes decentralized transactions possible and creates the whole universe of cryptocurrencies we now know is called blockchain. But blockchains typically have one major disadvantage compared to centralized networks like credit-card companies use: they're slow. As of May 2022, Ethereum typically processes fewer than 15 transactions per second, compared to tens of thousands for Visa's network.

Solana is one of many new crypto solutions making crypto networks faster and more scalable. It uses smart technologies, including a novel "proof of history" mechanism.

Why use proof-of history?

This system lowers latency and increases throughput because slot leaders can stream transactions to the rest of the validators in real-time rather than waiting to fill an entire block and send it at once.

As validators keep the count of time, they can stamp each incoming transaction with a proof-of-history value. The other nodes can correctly order transactions within a block even if they aren't streamed in chronological order. The other nodes can then verify these transactions as they come in rather than reviewing an entire block of transactions at once.

Ethereum vs. Solana

Like Ethereum, Solana is a cryptocurrency and a flexible platform for running crypto apps. Moreover, both of them have smart contract capabilities. Smart contracts, or collections of code that carry out instructions on the blockchain, are the key elements for running decentralized finance, or DeFi, applications, and nonfungible tokens, or NFTs.

However, Solana has several benefits over Ethereum. Its major innovation is speed via a bundle of new technologies, including a consensus mechanism called “proof of history”. Solana can process around 65 000 transactions per second — compared to 15 or fewer for Ethereum. Another advantage of Solana is significantly lower fees than Ethereum, making it more attractive for regular users.

Conclusion

Solana is a cryptocurrency with a huge potential as it fits regular users and decentralized app creators. Moreover, today it is a well-recommended project which will stay on the market for a long time so traders can be sure they will not lose their entire deposit by trading SOL.

FBS offers to trade SOLUSD with 1:2 leverage, helping our traders to manage risks and earn on the best cryptocurrencies.

Frequently asked questions

How much does SOL cost?

$62 as of May 11th

Where can you buy Solana?

Solana can be traded with almost all popular brokers, including FBS.

What consensus mechanism does Solana use?

Solana uses proof-of-stake as well as a protocol known as proof-of-history.

How many transactions can Solana do per second?

Solana has a theoretical throughput of 65 000.

How much is the average transaction fee on Solana?

The average fee on Solana is just $0.00025.

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2022-05-13 • Updated

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