What is Solana (SOL)?

Are you curious about Solana, a rising star in the blockchain universe? In this era where blockchain technology has captivated global interest, we stand at the forefront of a digital revolution. Bitcoin, the pioneering cryptocurrency, laid the foundation for this transformation, but it's just the tip of the iceberg. Following Bitcoin's breakthrough, several other blockchains like Dash, Bitcoin Cash, Ripple, Monero, and Litecoin emerged, each addressing specific challenges. Yet, in the realm of innovation and efficiency, one name stands out: Solana.

Ethereum has long been the gold standard in the smart contract landscape, offering groundbreaking technology for developers to build diverse financial applications. It paved the way for decentralised finance (DeFi) and a range of financial transactions. However, despite its advancements, Ethereum faces significant hurdles, including slow transaction speeds and high transaction fees, often referred to as 'gas fees.'

Solana is a blockchain network that not only addresses these crucial issues but also brings a fresh perspective to blockchain technology. Its immense potential and problem-solving capabilities have captured the attention of industry experts, who believe it could be a game-changer in the blockchain domain, particularly in revolutionising DeFi.

In this article, we will be having a look at the details of the Solana blockchain and what makes the Solana Blockchain network more appealing to users than its counterparts.

The Solana blockchain network is an ultra-high capacity and low-key blockchain network; its scalability enables it to handle thousands of validated transactions per second. Solana provides a solution to the problem of blockchain congestion and high fees that occur on the Ethereum blockchain, which enables a new wave of transactional applications like decentralised exchanges, gaming platforms, lending protocols, escrow mechanisms, and payment channels.

Solana has emerged as a trailblazer in the realm of blockchain technology, positioning itself as a solution to some of the most pressing challenges faced by other cryptocurrencies and blockchain platforms. At the heart of Solana's innovation is its claim of unprecedented speed, reportedly surpassing the transaction capabilities of giants like Ethereum and Bitcoin by a staggering 1,000 times. This remarkable speed is not just a theoretical advantage but a transformative feature that has the potential to redefine the scalability and usability of blockchain technology.

The principal founder of Solana is Anatoly Yakovenko, a Russian computer engineer and author of the Solana white paper. According to record data, he worked at Qualcomm before he then decided to develop Solana as its founder.

His experience as a software engineer working at Dropbox using compression algorithms gave him the much-needed experience to take on the Solana project and push it to fulfilment. In light of the Solana vision, the Project has other founding team members, including Eric Williams (Chief Scientist) and Greg Fitzgerald (Solana CTO).

Yakovenko started the blockchain project with some of his colleagues from Qualcomm to launch Solana labs in November 2017, which now birthed an idea to develop a high throughput blockchain.

The Solana blockchain network employs two different strategies to ensure the confirmation of transactions on its blockchain network.

These operations are referred to as consensus mechanisms and include "Proof Of Stake" and "Proof Of History".

These two consensus mechanisms are agreement protocols used to achieve the scalability and low transaction fees that Solana blockchain claims to offer. The proof of stake consensus mechanism is a better method of verifying transactions on a blockchain network compared to "Proof Of Work" used in Bitcoin and previously in Ethereum blockchains.

This is because while anyone who wishes to verify transactions on the Bitcoin or Ethereum blockchain must possess high computational power, the Solana blockchain proof of stake mechanism allows anyone to be able to verify/validate transactions on the blockchain network based on the amount of the blockchain native token that they have staked and how long the token has been staked.

Those who verify transactions on the proof of work consensus blockchain are called "Miners", while transaction verifiers on the Solana blockchain are called "Validators."

Read more: Proof of Work (PoW) and Proof of Stake (PoS)

There are certain attributes Solana possesses that make it stand out in the blockchain realm, including:

User Contribution

Solana also has another consensus mechanism that is similar to the proof of stake, which is "Delegated Proof Of Stake". This is a consensus validation process that enables every user of the blockchain to participate in maintaining the blockchain network by delegating the Solana blockchain native token (SOL) to a certain validator while they earn interest on the delegated token.

Proof of History

The proof of history consensus mechanism is another feature that makes the Solana blockchain more appealing and a blockchain of choice for developers. The proof of history is one of the major factors that enable fast transactions in the Solana blockchain; it's one of a kind of computational sequence that records the time of transaction as well as helps users schedule time as well as work by time registry for transactions. This technology can simply be likened to a system where tasks can be drafted in shifts that will be automatically executed. 

With this, validators are now given slots ahead of time within the cycle of the transactions. This means that each slot has its own time in which one validator can verify and then produce a block continuously. That way, the next validator, which had also been assigned a slot will start from where the previous validator has ended his transaction verification based on the timing cycle and also then produce their block of task confirmation. 

This reduces the load of work on the blockchain network by a single validator thus, the scalability in the Solana blockchain. In other blockchains like Ethereum, everyone has to stand in a queue and wait a turn for execution, which makes it slow. To make things faster and jump the virtual queue, gas fees are required, which makes it costly to operate on. 

Speed

Solana is a blockchain that can achieve the same transaction capacity as Visa. The platform currently functions at an impressive speed of 50,000 transactions per second or tps while tracking these operations using Proof-Of-History or PoH technology, as mentioned earlier. 

Low Transaction Fees

While Solana can handle over 50,000 transactions per second, its average transaction on the Solana blockchain costs around $0.00025. This is a huge relief, unlike the Ethereum blockchain, where the gas fees can go up into hundreds of dollars.

SOL token is the native token of the Solana blockchain; it is a cryptocurrency that powers the Solana blockchain.

SOL is used to make transactions in the Solana blockchain and also serves as a requirement to run operations on the blockchain. SOL tokens can be staked to earn rewards and also used to provide liquidity to a pool in the blockchain, which is a passive source of income for users.  At the time of writing, Solana has a market capitalization of $37 billion and has a circulating supply of 433M tokens out of a total supply of 567.7M tokens. At launch, Solana was worth $0.9511 and attained an ATH of $260.06 on 6 November 2021.

Trading Solana is equally simple. As one of the most promising and fastest-growing blockchains in the crypto space, Solana's SOL token can be purchased on Yellow Card at the cheapest rate with no hidden costs.

Here is a simple procedure on how to buy SOL on Yellow Card;

Due to its fast speed, the Solana blockchain currently can achieve the same transaction capacity as Visa. At an impressive speed of 50,000 transactions per second or tps, it is very commendable. Solana blockchain technology is based on the principle of sharding, where the blockchain is divided into smaller chains that move data faster, making for its speed. Due to the vast popularity of the Solana network, the popularity of its native coin, Sol, has gone up massively. This still makes it a viable investment opportunity for any crypto enthusiasts. 

Solana remains home to many blockchain innovations, including Dapps and NFTs. Within its short span of existence, Solana currently has over 469 DApps, which indicates the immense potential of the blockchain network. Solana is also mostly preferred for NFTs and DeFi applications; Jupiter, Solend, and Raydium are some of the most popular apps built on the Solana network. In order to improve the massive adoption of its ecosystem, Solana has partnered with WebAuth, a cryptography infrastructure company, to integrate easy access among all the DApps in its ecosystem without the rigorous demands for seed phrases. 

Seed phrases are 12-24 word codes a person is supposed to remember and use when connecting to their wallet for various applications. With the Solana Torus wallet, easy access to all the DApps improves more adoption of all its applications.  Solana has also been a winner in the NFT space, with many of its NFT marketplaces gaining massive use and adoption. These include Magic Eden, Solanart Solsea, etc. Solana indeed has a lot of potential and opportunities for expansion within the crypto and blockchain space.