What is Solana?

Solana is a highly functional open source project that implements a new, permissionless and high-speed layer-ane blockchain.

Created in 2017 past Anatoly Yakovenko, a quondam executive at Qualcomm, Solana aims to scale throughput across what is typically achieved past pop blockchains while keeping costs low. Solana implements an innovative hybrid consensus model that combines a unique proof-of-history (PoH) algorithm with the lightning-fast synchronization engine, which is a version of proof-of-stake (PoS). Because of this, the Solana network can theoretically process over 710,000 transactions per second (TPS) without whatsoever scaling solutions needed.

Solana’southward 3rd-generation blockchain architecture is designed to facilitate smart contracts and decentralized application (DApp) creation. The project supports an array of decentralized finance (DeFi) platforms as well as nonfungible token (NFT) marketplaces.

Solana blockchain was rolled out during the 2017 initial coin offer (ICO) nail. The project’s internal testnet was released in 2018, followed past multiple testnet phases leading to the eventual official launch of the main network in 2020.

What makes Solana unique?

Solana’south ambitious design aims to solve the blockchain trilemma, a concept proposed by Ethereum creator Vitalik Buterin, in its unique way. This trilemma describes a set of three major challenges that developers face when building blockchains: decentralization, security and scalability.

Information technology is widely believed that blockchains are built in such a fashion that forces developers to sacrifice one of the aspects in favor of the other two, every bit they can simply provide ii of the three benefits at any given time.

The Solana blockchain platform has proposed a hybrid consensus machinery that compromises on decentralization to maximize speed. The innovative combination of PoS and PoH makes Solana a unique projection in the blockchain industry.

Generally, blockchains accept greater scalability, depending on the number of transactions per second they can back up, the more and improve they scale. In decentralized blockchains, even so, time discrepancies and higher throughput wearisome them downwardly, meaning that more nodes verifying transactions and timestamps take more time.

In a nutshell, Solana’s design solves this problem by having i leader node chosen based on the PoS mechanism that sequences messages between nodes. Thus, the Solana network benefits, reducing workload that results in increased throughput even without a centralized and exact time source.

Also, Solana creates a concatenation of transactions by hashing the output of one transaction and using it as the input of the side by side transaction. This history of transactions gives a name to Solana’s primary consensus mechanism: PoH, a concept that allows for greater scalability of the protocol which, in turn, boosts usability.

How does Solana work?

The core component of the Solana protocol is proof-of-history, a sequence of computations that provides a digital record that confirms that an event has occurred on the network at any signal in fourth dimension. It tin can be presented as a cryptographic clock that gives a timestamp to every transaction on the network, along with a data structure that can exist a simple addition of it.

PoH relies on PoS using the Belfry Byzantine fault tolerance (BFT) algorithm, an optimized version of the applied Byzantine fault tolerance (pBFT) protocol. Solana uses it to reach a consensus. The Belfry BFT keeps the network secure and running and acts as an boosted tool to validate transactions.

Moreover, PoH tin be considered as a loftier-frequency Verifiable Delay Function (VDF), a triple role (setup, evaluation, verification) to produce unique and reliable output. VDF maintains order in the network by proving that block producers have waited enough time for the network to motility frontwards.

Solana uses a 256-bit secure hash algorithm (SHA-256), a set of proprietary cryptographic functions that output a 256-bit value. The network periodically samples the number and SHA-256 hashes, providing real-time data co-ordinate to the set of hashes included on central processing units.

Solana validators tin use this sequence of hashes to record a specific slice of data that was created prior to the generation of a specific hash index. The timestamp for transactions is created later on this particular piece of data is inserted. To achieve claimed huge numbers of TPS and cake creation time, all nodes on the network must accept cryptographic clocks to keep track of events rather than waiting for other validators to verify transactions.


The Solana (SOL) token

Solana’s cryptocurrency is SOL. It is Solana’south native and utility token that provides a ways of transferring value equally well as blockchain security through staking. SOL was launched in March 2020 and has strived to become i of the top 10 cryptocurrencies entering the space past ways of total market capitalization.

SOL token functioning scheme is similar to that used in the Ethereum blockchain. Even though they function similarly, Solana token holders pale the token in order to validate transactions through the PoS consensus mechanism. Furthermore, the Solana token is used to receive rewards and pay transaction fees while likewise SOL enabling users to participate in governance.


Related: Proof-of-stake vs. proof-of-work: Differences explained

Answering the question of how many Solana coins are at that place, at that place will be more than 500 million tokens released in circulation with the electric current total supply of Solana exceeding 511 one thousand thousand tokens — Solana’s circulating supply is just over half that. Effectually threescore% of SOL tokens are controlled by Solana’s founders and the Solana Foundation, with only 38% reserved for the community.

If you would like to know where to buy Solana, SOL tokens can exist purchased on almost exchanges. The top cryptocurrency exchanges for trading in Solana are Binance, Coinbase, KuCoin, Huobi, FTX and others.

Solana vs. Ethereum

Solana has received a lot of accolades for its speed and performance and has even been cited as a legitimate competitor of crypto manufacture leaders such as Ethereum.

And then, how is Solana dissimilar from Ethereum and tin it be considered as a potential Ethereum killer?

In terms of processing speed, Solana is able to challenge the dominant smart contract platform, as it is supposedly capable of reaching a speed of over 50,000 TPS. Solana uses unlike consensus algorithms to avert boring transaction confirmation. This characteristic makes Solana one of the fastest blockchains in the industry to compete with other industries outside of the crypto space.

Compared to this enormous number, the electric current low scalable Ethereum proof-of-work model can simply handle 15 TPS. Thus, Solana is thousands of times faster than Ethereum. Another Solana advantage is the network’s extreme cost-effectiveness, as the project implements new tokenomics for lower fees.


Related: What is Spider web three.0: A beginner’s guide to the decentralized internet of the future

Also, information technology is worth noting that Solana’s blockchain, while implementing one of the variations of PoS, is more than eco-friendly and sustainable. This is in contrast with Ethereum, whose current Pw model requires the use of tremendous computational power.

Notwithstanding, everyone in the crypto community is looking forward to the Ethereum upgrade to PoS. A new kind of Ethereum, which is being diligently adult, will consist of an execution layer (previously known as Ethereum 1.0) and a consensus layer (previously Ethereum 2.0). It could greatly increment throughput, improve scalability, lower transaction fees and stop unsustainable ability consumption.

The downsides of Solana

If y’all’re nonetheless wondering if Solana is a skillful investment and whether you should buy information technology, the reply is still up to you. Despite the visible advantages, Solana has its demerits like any existing crypto project.

Starting time and foremost, although the Solana blockchain tin compete with loftier-stop blockchain projects, it is still vulnerable to centralization, as there are not many blockchain validators. Anyone on the network can get a Solana validator only doing so is still difficult considering it requires a lot of computing resources.

Along with this, the protocol yet labels itself as a beta version of the mainnet, which does not negate the possible presence of bugs and errors.

Despite these issues, Solana is still one of the biggest ecosystems in the crypto industry and seems to be on the right growth path.