Studying and following through with cryptocurrencies can open options for investment for you. You would be aware of Bitcoins, Ethereum, and many other decentralized finances. Similarly, you have come across Solana and wondered ‘what is Solana’ and is it good enough for investment.
Solana functions on blockchain technology to create a decentralized financial platform with multiple functions.
Solana: An Overview
If you’re aware of blockchain technology, you can identify Solana as a highly functional open-source project based on blockchain technology. It works on blockchain technology’s decentralized finance (DeFi) solutions, requiring no permissions.
Several investors perceive Solana to be an Ethereum-killer because of the excellent speed it offers. It offers 50 000 transactions per second or TPS. As compared to Ethereum, it is extremely fast, which offers 15 to 45 TPS.
The main aim of Solana is to improve scalability. It improves scalability as it has introduced proof of history consensus and underlying proof of stake consensus to the blockchain.
This innovative hybrid model benefits both small-time traders and institutional traders. Most decentralized finances face challenges in making their foundation accessible on a large scale. However, Solana focuses on breaking this barrier.
The Founders of Solana
The founders of Solana are Anatoly Yakovenko and Greg Fitzgerald. The man behind Solana is Anatoly Yakovenko. His journey started at Qualcomm. He picked up ranks rapidly to become an engineer manager in 2015.
In his professional journey, he later switched paths to become a software engineer at Dropbox.
In 2017, Yakovenko initiated a project that later became Solana. Greg Fitzgerald joined forces with Anatoly Yakovenko to develop the initial project. They founded the Solana Labs.
Soon, the two invited several other Qualcomm colleagues, and they teamed up to create the Solana protocol and SOL tokens. In 2020, the company released the SOL tokens.
What Does Solana Do?
Solana has a range of features to power multiple applications. The following are some of the functions of Solana.
- Currency: You can use Solana and send and receive coins in exchange for goods and services with a cryptocurrency wallet.
- Smart Contracts: These are apps that automatically execute the terms of the contract after the conditions get fulfilled.
- Non-Fungible Tokens: Usually, NFTs are used by artists. Thus, you can use Solana for all the transactions related to digital art.
- Digital Apps: Solana also supports developing a range of apps such as investing, social media, games, etc.
- Decentralized Finance: Decentralized finance allows transactions to take place without the intervention of the government or bank. Thus, these Solana allow permissionless payments.
- Proof of History Approach: Solana uses a proof of stake approach to validate transactions and timestamp them. In addition, Solana also used evidence of the historical approach. It removes the ability to reorder the transactions to a validator’s approach. Thus, Solana becomes a censorship-resistant network.
Solana is not just merely a currency for transferring monetary value. It is much more than that. It is a token that can power various apps.
How Does Solana Work?
Solana works on the proof-of-history protocol. It has revolutionized the functions of blockchains. The validators are in charge of their own clocks.
Nodes do not have to be in charge of process power before verifying various timestamps. Thus, the transaction verification process reduces with this, and hence Solana is known for its fast speed.
Proof of History
Proof of history is the main consensus or the concept of Solana protocol. It undertakes bulk transactions. Moreover, it holds a record of the successful operations and the period between each. Therefore, ensuring to imply the nature of blockchain.
Proof of Stake
The proof of stake is used as a monitoring tool to help proof of history function better. It validates the sequences produced by the blocks.
This perfect blend of the two consensus mechanisms makes the Solana protocol effective and unique in the Blockchain industry.
What Makes It Unique?
With Solana, the world of blockchain got introduced to the proof of history consensus. Therefore, the scalability of the protocol increases and also boosts usability.
The main element making Solana unique and popular is the short processing time. With the hybrid protocol, the validation time for transactions as well as smart contract execution is significantly reduced.
The swift processing times had gained Solana the attention of several institutional interests.
Another factor explaining Solana’s popularity and uniqueness is that they have promised there won’t be any surprise fees or taxes.
So, Solana has lived up to it and designed the protocol in such a way that the transaction costs are low. All while guaranteeing scalability and fast processing.
How to Buy Solana (Sol) Tokens
You can purchase Solana tokens on most exchanges. Some of them are listed below.
- Huobi Global
If you have chosen Binance, you get the highest SOL/USDT trade volumes.
Things You Need to Know Before Investing in Solana
Before you invest in Solana, you need to know the following key points.
- As many investors perceive Solana to be an Ethereum-killer, its value had increased significantly. Many consider Solana to be an alternative to Ethereum.
- A way in which users differentiate and choose between Ethereum and its competitors is by the number of projects running on each network. Ethereum has a first-mover advantage, but the other competitors aren’t quite far. Solana has 350 projects.
Now that you have learned everything you need to know about Solana, you can go ahead and use the decentralized finance platform. It offers a lucrative trading opportunity at the same time, faster processing speed amongst the best blockchain-based, highly functional open-source projects. Lastly, Solana is one of the fastest-growing cryptocurrencies.