Solana is a permissionless, high-performance blockchain that offers scalable, fast, and decentralized marketplaces and apps. Here you will find everything you need to know about this protocol.
The world today is replete with more than 4000 cryptocurrencies. The fascinating thing about all of them is that they bring something unique to the table. Solana (SOL) is one of these currencies. And unlike others, Solana lives up to its promises and has been doing just fine as a cryptocurrency that provides decentralized marketplaces.
An Overview of Solana
Solana is a permissionless, high-performance blockchain that offers scalable, fast, and decentralized marketplaces and apps. It creates new technology that enables users to have smart contracts, speedy transactions, and security at the enterprise level. Solana was introduced in 2017, and since then, it has experienced tremendous growth.
Solana has a native token called SOL coin that belongs to its blockchain. SOL can be transmitted to nodes in a Solana cluster to validate the output of an on-chain program. It is expected that in the future, people will use SOL to vote on changes to Solana. But in the meantime, SOL can be staked to become a blockchain node. It is also used to pay for fees on the Solana network.
Solana’s cryptocurrency industry partners include Tempest Project Serum, Stardust, FTX, Akash, Terra, Chainlink, dfuse, Formatic, civic, Kin, etc.
Background of Solana
In 2017, Anatoly Yakovenko, who used to work at Qualcomm, founded Solana. Yakovenko alongside Solana’s CTO, Greg Fitzgerald, created a new method of solving traditional throughput problems in the Bitcoin (BTC) and Ethereum (ETH) blockchains. Before founding Solana, Yakovenko spent 12 years at Qualcomm developing the technology found in smartphones.
Solana takes its name after the California beach that is located 30 minutes north of San Diego. It was this beach that Yakovenko spent most of his life working on telecommunications. Initially, he wasn’t so much interested in Bitcoin and Ethereum. But while he was working on a deep-learning computer network, he earned new units of Bitcoin. There and then, during an experience in 2017 which he described as “caffeine-induced fever dream at 4.am”, he realized that Bitcoins’s hash function, SHA-256, could create a decentralized clock on a cryptocurrency blockchain.
He concluded that if transactions are timestamped, the scalability of a cryptocurrency blockchain will increase even without the need to sacrifice decentralization. And that was how he used his experience as a Dropbox engineer to build his dream. Now Solana is one of the advanced fourth-generation blockchains.
Key Innovations of Solana
For Solana to create a reliable blockchain network, the inventors came with significant innovations to facilitate that. These proprietary systems include:
- Proof of History (POH)
This innovation integrates timestamps during the approval of transactions to make the blockchain more efficient and track transactions easily. Through the timestamps, nodes set the sequence of events, and the systems act as a cryptographic clock for the network. The PoH consensus algorithm also increases the throughput rate within the network.
- Tower BFT
Tower BFT is like an advanced version of the Practical Byzantine Fault Tolerant (PBFT) system found in other DPoS blockchains. The Tower BFT system does this by recording the previous votes and using them to accelerate validation.
This is Solana’s blockchain broadcasting technology that breaks up important data into bits. Through this, the packets can be sent to nodes faster without utilizing much bandwidth.
These are hardware storage systems that speed up access to essential network information. Archivers help to store data. They also enable validators to recover the network’s transaction history.
Pipelining is the transaction processing unit of the Solana network. The protocol better blocks validation by designating a group of input data to various hardware depending on its specifications.
This is the account base of the Solana network. It works together with the Pipelining and Archivers protocols to facilitate the simultaneous reading and writing of data.
- Gulf Stream
With Gulf Stream, Solana forwards transactions to validators before the completion of the present block of transactions. As a result, it enables validators to execute transactions faster and reduces the memory pressure from unverified transaction pools on validators.
This innovation allows Solana to execute different smart contracts simultaneously without hampering the performance of the network.
Speaking of wallets, Solana doesn’t have many cryptocurrency wallets. However, you can use Binance’s Trust Wallet for software and Ledger Nano S for hardware. This is because they are the only wallets that support SOL crypto.
A group of computers that work together yet can be viewed externally as a single system form a cluster. By that definition, a Solana cluster is a set of computers that work together or against one another to confirm the output of untrusted programs submitted by users. A user can use a Solana cluster to monitor real-world assets or track the exact computer that keeps the cluster running.
Furthermore, a Solana cluster also produces a record of events which is called the ledger. This ledger lasts for as long as the cluster lasts.
SOL is the native token of the Solana network. This token can pass to nodes within the network in exchange for running or validating the output of on-chain programs. It is also used to carry out micropayments known as imports.
If you want to make profits while holding your token, you can stake your SOL. As of June 2021, its circulating supply is 26 million while its maximum supply is 489 million.
Solana has had five funding rounds in total. The first private funding round happened in March 2018 and sold below 80 million SOL for $3.17 million, at a price $0.040 per SOL. The second private funding round occurred in June 2018 and raised $12.63 million, selling more than 63 million SOL for $0.20 per SOL.
The third private funding round happened in July 2019. More than 25 million SOL sold for $2.13 million, at $0.22 per SOL. The last private funding round occurred in February 2020. More than 9 million SOL sold for $2.29 million at $0.25 per SOL during the funding.
In March 2020, during the Solana ICO, 8 million SOL sold for $1.76 million at 0.22$ per SOL, which is only 1.6% of Solana’s total supply.
The Benefits of Solana
Solana comes with many benefits. Firstly, it is scalable. According to the developers, Solana is capable of 50,000 tps. It also has systems that scale transaction throughput proportionally to its bandwidth. Secondly, Solana allows Delegated Staking. As a user, you can create a passive income by staking your SOL on the network. This process is easy for new users to learn. Moreover, it also creates a more stable reward than trading. Finally, it has no censorship. Solana is usable for everyday commerce. For example, you can carry out your international transactions at a cheaper rate compared to other cryptocurrencies. And since the network has no centralized control, no one will obstruct your crypto transactions.
Solana is one of the most advanced blockchains in the world. It has an efficient algorithm that makes it easy to confirm transactions. As a result, it is gradually becoming a force to reckon with in the world of crypto. Soon enough, many other developers would move to Solana to experience the benefits of it.