Updated: May 3
Solana (SOL) is a decentralized blockchain platform that was introduced in 2017, by Solana Foundation based in Geneva. Solana was meant to rival the gold standard in open-source blockchain platforms competitor, Ethereum.
However, Solana can process far more transactions per second, around 1,949, compared with Ethereum, which currently completes around 15-45 transactions per second. Plus, Solana was created to scale up, and handle an infinite number of applications built on it like, DeFi, WEB3, and DAPPS.
Solana is a layer one application, just like Ethereum. Not to be confused with 2nd layer applications meant to enhance slower blockchains like Bitcoin.
However, the fees per transaction are significantly less on the Solana blockchain than others, making it attractive for everyone.
What is Solana (SOL) Cryptocurrency?
The cryptocurrency that powers the Solana blockchain is Solana (SOLUSD) and the market cap in late 2021 is $66 billion, making it the 5th largest and most popular crypto coin today.
Solana provides a super-fast, decentralized platform that anyone holding SOL can use. It is already home to over 400 applications that span Defi-WEB3, and NFT’s, and growing.
How Does Solana Work?
Solana works on a Proof of History process that ensures the transactions on the public ledger are correct and verified. The POH process is revolutionary because it doesn’t rely on tons of electricity and miners like Bitcoin, or even the Proof of Stake system Ethereum relies on. Solana provides a trustless environment to conduct business, send, or receive money, for fractions of a penny per transaction.
Understanding Solana & Proof of History (POH)
The Solana blockchain functions on Proof of Stake like Ethereum’s, but also utilizes a Proof of History concept as well. The POH is proof for verifying order and passage of time between events, and it is used to encode trustless passage of time into a ledger.
Confused yet? Let’s break it down…
Typical blockchain does not rely on time to verify events that occur on the blockchain and ledger. Each node on the chain would have its own internal clock to verify its own events.
However, when messages or transactions occurred between nodes, there was no proof of time, between them./ Solana gets around this issue, by networking all the node’s clocks together, and requires proof of time between transactions. If any time is not correct, it would immediately force the transaction to be rejected.
In this way, Solana provides trustless transactions verified in real-time, automatically, on the blockchain’s ledger.
Solana vs Ethereum
The two cryptocurrencies that are the most alike, and competitors within the space are, Solana and Ethereum. To be fair, Ethereum was here well before Solana and is in the middle of an upgrade to Ethereum 2, which they say will drastically increase Ethereum’s capabilities. Still, let's see how Solana vs Ethereum stacks up against each other today.
Ethereum – Layer one solution designed as open code, with a public ledger. The high gas fees currently experienced by Ethereum users is due to the massive amounts of traffic on the network. The more transactions being done, the higher the fees.
The upgrade to Ethereum 2 aims to fix these issues by boosting transaction times and lowering fees per transaction. Ethereum is where the entire DeFi network is built from, and it utilizes the proof of stake verification system. Right now, Ethereum can process around 45 transactions per second.
Solana – Layer one solution built on decentralized blockchain that uses proof of stake, where shareholders get to delegate changes and the future of the company.
The Solana blockchain utilizes a public ledger for all transactions, but also implements proof of history, a trustless transaction process. The fees per transaction are $0.00025, far less than Ethereum. Currently, Solana can process 1,949 transactions per second.
Where Can you Buy Solana (SOL)
Solana is a decentralized blockchain built to enable scalable, user-friendly apps for the world. You can buy Solana (SOL) on most decentralized exchanges, and some online exchanges.
Is Solana (SOL) a Good Investment?
Yes! Solana is a great investment because, unlike many other cryptocurrencies, Solana is based on cutting-edge technologies that are scalable and being adopted by businesses, and large institutions moving forward.
Whenever you are considering investments in crypto coins, it is imperative to research who the companies are, and what services, or products, they plan to develop. With Solana, you get the fastest blockchain, which is open-source code anyone can holding SOL can inspect.
Not to mention that anyone can build their own applications on the Solana blockchain today. In fact, formed the first lady Melania Trump has started her own blockchain-based non-fungible token (NFT), called Melania’s Vision, which are available on the Solana network, and cost 1 SOL each, through December 31st. [View Malania Trump's NFT Vision on the Solana Network]
The future of Solana could be bright! Many other blockchains are created all the time. But only a handful offer layer 1 solutions. Moreover, Solana is currently the fastest platform that can scale unbelievable fast, an attractive quality for investors.
Wrapping This Up!
There are literally thousands of crypto coins available today. But none really do what Solana can do to improve transaction speeds, lower the cost-per-transaction drastically, and be able to scale infinitely. In December 2021, Solana coins cost around $172.54.00, each.
If you are interested in Solana investments, do your own research, to ensure that the metrics add up to be a cryptocurrency you want to own. At the very least, Solana blockchain is pushing forward into 2022, with strong coin metrics, and a solid foundation to build anything from.