Wednesday, October 5, 2022

What is Solana (SOL)?

Despite its unique nature, blockchain technology has a number of shortcomings, the most significant of which is its limited scalability.

When networks grow, they often struggle with the issue of limitations placed on the transaction speeds and confirmation speed at which they operate.

While this is a general reality, Solana is a blockchain-based project that places emphasis on achieving high throughput and transaction speeds. In addition to the solutions it provides, it can also assist in the development of decentralized applications and smart contracts.

It is well known that Proof-of-Work (PoW) consensus consumes a significant amount of energy, and scalability is another issue that is yet to solve, not even by well-known cryptocurrencies like Bitcoin and Ethereum. You might then wonder, is it even possible to find a quicker and more foolproof method of reaching a consensus?

Solana’s entry into the ecosystem comes off as the game-changer as it simultaneously ensures that neither security nor decentralization is jeopardized while improving scalability.

The protocol made its debut five years ago and Anatoly Yakovenko was credited with creating the Solana platform. He drew on his prior expertise as a software engineer at Dropbox and Qualcomm, where he first learned about the advancement of operating systems and compression techniques before founding Solana.

As the adage goes, two heads are better than one. He teamed up with Eric Williams and Solana’s CTO, Greg Fitzgerald, to establish a novel way of dealing with Bitcoin and Ethereum blockchain difficulties.

This came as a result of the experience gathered from top coys around the world and that includes, but is not limited to Apple, Qualcomm, and Dropbox.

Deep Dive on Solana

Solana is a fourth-generation blockchain and cryptocurrency that makes use of an open infrastructure to expand its usability.

Solana provides its users with lightning-fast transaction speed and the best level of security available. This is due to a wide range of cutting-edge technology being deployed throughout the network.

It uses a decentralized protocol that does not require trust in order to increase scalability. With this in place, Solana continues to work on some of the issues that remain unresolved.

How Does It work

Yakovenko’s interest sparked up when he found a way to improve the system. As it is well known that blocks do not carry time stamps in the traditional blockchain. This in turn leads to inefficiencies.

However, he found a way to include it in the SHA-256 (Secure Hashing Algorithm 256) hash function, with this, the proof of history (PoH) was formed.

What Yakovenko did was to create a proof of history mechanism of synchronized clocks. PoH essentially assigns a timestamp for each transaction and disables the ability for miners and bots to determine the order in which transactions are recorded in the blockchain.

According to him, this approach provides greater security and resistance to censorship.

Proof of history is derived from proof of stake, and it is one of Solana’s eight inventions. As the latter idea is to trust timestamps given on a block, proof of history’s idea is to demonstrate that a message occurs at a specific period before and after an action.

As a result of this, Solana’s proof of history enables the production of a record that confirms a given event occurred.

SOL Token

The Solana token is called SOL and it uses the SPL protocol. It is used to pay transaction fees or when interfacing with smart contracts.

The token launched on the Solana beta testing network in March 2020 and its value has increased to almost 30 times the initial value when it was introduced.

It is currently among the top 20 cryptocurrencies in the world based on market capitalization. As announced by the Solana foundation, a total of 489 million tokens will be in circulation.

When compared to Ethereum, what prospects distinguish Solana? 

Solana and Ethereum have fundamentally different technologies and consensus mechanisms. Currently, Solana uses Proof of History, whereas Ethereum uses Proof of Work.

While Ethereum has a more established and decentralized network, Solana offers transactions that are both quick and inexpensive.

The Solana network has the capability of doing over 50,000 transactions in one second. Its token value is pegged at $35.91 with a circulating supply of 342,509,641 SOL tokens.

This is a worthwhile achievement when we look at the time of its market capitalization and its comparison to other rival cryptos.

Because it employs cutting-edge technologies, Solana has a broad scope. It provides a more advantageous and affordable alternative to Ethereum, thereby drawing the attention of many developers.

It has also attracted a loyal following of users thanks to its lightning-fast transaction time.

Conclusion

Having looked at what Solana’s technology entails, and the features it has when compared with its rivals, we can say that Solana, even though is still relatively young, has solved the problem encountered by other cryptocurrencies including speed and scalability. Its token price is also very much affordable to users and prospective investors, thus making it one of the most revered altcoins after Ethereum.

Ayo Alabi
Ayo Alabi is an experienced writer and Fintech enthusiast, passionate about educating people and helping businesses that want to see their Google search rankings surge. Her articles have appeared in a number of e-zine sites, with focus on balancing informative with SEO needs–but never at the expense of providing an entertaining read.

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