What is Solana?
- What is Solana?
- Solana’s Design Creates a Unique Position for Itself
- Solana’s Stability is Paving the Way for Mass Adoption
- Solana is Prototyping New Technology
- Solana Has Upgraded Infrastructure to Support More Transactions
- Solana Continues to Form Strategic Partnerships with Other Projects in the Crypto Industry
- The SOL Project Has Some Exciting Features That Will Make It a Great Choice as an Investment
Since the advent of blockchain technology, a primary stated goal for most projects has been achieving scale. The ability to process huge amounts of transactions and data is key to driving widespread adoption.
As the statistics stand at the moment, most blockchains cannot process too many transactions at a time due to the sheer amount of time it takes for nodes to achieve consensus. Solana, however, is a new high-throughput blockchain that is designed for speed, stability, and scalability in order to enable decentralized applications at scale.
In this article, we’re going to discuss what makes Solana different from other blockchains, how it’s designed to achieve its goals, and what this all means for investors. This article won’t be going over how to buy Solana, however, that can be carried out through virtually any platform that trades in cryptocurrency. And of course, you can always mine Solana yourself by recording and validating transactions.
Solana’s Design Creates a Unique Position for Itself
To begin our discussion — Solana’s design and technology place it in a unique position throughout the cryptocurrency industry. Unlike other cryptocurrencies, Solana is primarily built for speed, which allows it to provide faster transaction times and higher capacities than Bitcoin.
Its Proof of History consensus protocol provides secure time-syncing between nodes on the network without relying on a central clock, while its proof-of-stake mechanism allows all SOL token holders to stake their tokens, earning rewards proportional to their holdings. This makes the network more secure, as well as far more energy-efficient than any other method in the game.
Solana’s Stability is Paving the Way for Mass Adoption
Part of the appeal of blockchains like Ethereum and Bitcoin is that they’re both fast enough to be useful and cheap enough to operate. However, Solana’s blockchain offers greater speed, which means that it can process more transactions per second.
That speed comes from Solana’s Proof of History (PoH), which is a clock that continuously iterates in units of time called slot cycles. This continuous cycle makes it possible for Solana’s nodes to each verify that the other nodes are on the same page, thereby creating a consensus across network participants.
Because this consensus occurs with each iteration or “tick” of PoH rather than less frequently as with traditional blockchains, the process makes achieving consensus on the Solana blockchain much faster.
Solana uses a different mechanism than its better-known predecessors to achieve consensus on which transactions are valid: Proof of Stake (PoS). The long-term goal for PoS is to eventually allow token holders to earn rewards in proportion to their stake in the network, but this feature won’t be available immediately after the main net launch.
Solana is Prototyping New Technology
One of the most interesting things about Solana is a blockchain innovation we’ve referred to before, Proof of History. We’re going to go into greater detail about it here. To understand it, you have to first understand the problem it’s trying to solve.
If you look at other blockchains with faster block times (like Ethereum) they rely on a system called “finality gadget”, which relies on some probabilistic method to achieve finality, meaning that after some point in time (roughly 3-10 minutes), there is a high probability that a block is finalized and it becomes very expensive for an adversary to fork the chain. There are two downsides to this approach:
- Finality takes too long due to relying on randomness and probabilistic methods
- Due to the time taken for the first process, many applications are forced onto Layer 2 solutions where blocks don’t really exist.
Against this, the Proof of History method utilized by Solana opts for a far more streamlined solution. By using a virtual clock that produced slot cycles continuously, while monitoring the nodes connected to it, Solana’s technology achieves consensus between nodes far quicker than most traditional blockchains.
Now since this is emerging technology, it is still in the stages where errors occur, and Solana has seen its fair share.But despite that, Solana remains dependable and once you’ve assessed the risks, you’ll still find yourself asking, how to buy SOL.
Solana Has Upgraded Infrastructure to Support More Transactions
So, you might be wondering what about all of this makes Solana special? The main reason to pay attention to this project is that it offers developers everything they need to create fully scalable dApps. But what exactly does that mean?
It means that Solana has upgraded its infrastructure to support more transactions and make them faster. At this moment, according to Solana’s own sources, it can process up to 50,000 transactions in a second while maintaining stability and security. But then again, the technology is being improved at every step and this volume may increase greatly as Solana’s protocol is improved.
The platform also manages transaction costs by allowing users to pay fees only when making a transaction. This is great news because transaction fees are one of the biggest obstacles right now for blockchain technology being used on a wide scale. In addition, there is no need for any extra software or hardware tools which makes using the platform much easier AND creates an overall better user experience from start to finish.
Solana Continues to Form Strategic Partnerships with Other Projects in the Crypto Industry
Solana has formed a partnership with Uptrennd. Having announced on December 1st, 2020 that in the upcoming weeks it will begin migrating all Uptrennd users’ accounts to Serum (a Solana-based decentralized exchange project), this partnership appears to be a long-term one.
Solana has formed also a partnership with Serum. In fact, Solana is Serum’s main blockchain partner, and the two are working together in order to allow for low latency order execution and other features which will make decentralized exchanges more functional and viable than they have ever been in the short history of blockchain.
Solana’s next partnership is with Chainlink. The goal of the partnership is to ensure that smart contracts on the Solana platform are able to fully utilize external data in their operations, meaning they can query off-chain data sources such as information from traditional financial markets and also securely interact with APIs provided by centralized services such as price updates from Binance.
Solana has partnered with Equilibrium. Equilibrium is an ecosystem of DeFi protocols built on top of Substrate, Polkadot’s blockchain framework software development kit (SDK). The purpose of the partnership is for Equilibrium’s clients to be able to mint DOTs on the Solana network for use within Substrate parachains.
This will provide those clients with access to new functionality and efficiency advantages associated with using Solana as opposed to just using Ethereum blockchains or other blockchains where DOTs are currently available.
And finally, Solana has formed a partnership with Ankr. The two projects began collaborating after Ankr was integrated into the Sollet wallet in June 2020; then, more recently, Ankr became one of seven partners announcing their support for the release of “Project Alba”.
It is an initiative intended to make validator nodes running on stable networks such as Polkadot and Cosmos available for leasing through auctions organized on the Coinlist Pro platform where users can create bids for how much they’re willing to spend per second or an hour or any other given time frame.
The SOL Project Has Some Exciting Features That Will Make It a Great Choice as an Investment
Now that we’ve taken a closer look at some of the features that will make Solana an exciting investment and tool. The project is, at the moment, touting its ability to handle 50,000 transactions every second, which would make it a truly scalable solution for a variety of applications.
It will be able to process transactions more quickly than Bitcoin does, which is about three per second. If you’re familiar with Ethereum, which processes 15 transactions per second, you’ll know what a big boost this would represent compared to those two projects.
A feature that should be appealing to potential investors is that the network has been designed with low transaction costs in mind. Imagine if gas fees for transacting Ethereum were dirt cheap and that alone gives you a good reason as to why you should buy SOL.
With revenue models built into many apps these days, high transaction costs can be prohibitively expensive for many businesses and individuals. Solana offers another benefit here: the network won’t need additional hardware or third-party infrastructure in order to perform automatic scaling of their data storage capacity needs.