Blockchain technology is one of the most exciting innovations in recent years. The potential for blockchain to disrupt many industries, including finance, supply chain management, and healthcare, has led to a surge in investment and interest from all sectors.
However, some significant challenges need to be addressed before this technology can reach its full potential. One of these challenges is scaling – which refers to the ability of a system or network to handle an increasing amount of work without becoming overloaded or slowing down.
Solana offers a solution with their unique Proof-of-History (PoH) consensus algorithm that solves both scalability and security issues faced by other blockchains today. PoH enables developers to design decentralized applications using the Solana blockchain platform.
How does Solana work?
The Solana blockchain platform is a high-performance, distributed ledger that delivers transactions at the rate of hundreds per second while using only minimal energy.
Unlike traditional blockchains where a group of nodes carries out consensus, PoH has a Proof-of-Stake consensus mechanism which allows for more scalability and stability on the network.
The PoH consensus mechanism works by ensuring that nodes on the blockchain are aware of the latest state of the network without requiring them to have a complete and comprehensive record of all transactions to date. Nodes on Solana only need to download the latest Proof-of-History root hash, which is updated regularly as new information is available.
This consensus model has a number of benefits and drawbacks compared to traditional Proof-of-Work (PoW) or other PoS models. For example, PoH uses very little energy as nodes in the network do not have to perform any resource-intensive calculations. The security of the blockchain is also significantly improved as a malicious attack from attackers would require simultaneous attacks on the majority of nodes in the network.
On the other hand, this consensus mechanism limits performance as it slows down the block generation rate. The Solana team has addressed this issue by creating a unique sharding solution that enables parallel computational tasks to be executed without limiting scalability or compromising security. The Solana network is able to process hundreds of thousands of transactions per second.
How to buy SOL tokens
SOL are the native cryptocurrency tokens of the Solana blockchain. SOL can be used to pay for transactions fees on the network or as an investment looking for long-term value appreciation.
SOL tokens can be bought and sold on exchanges such as Binance, Liquid, OKEx, and BitForex. Before trading SOL tokens for fiat or other cryptocurrencies, most exchanges require you to first acquire a base crypto asset like Bitcoin (BTC) or Ethereum (ETH).
Developers can also earn SOL tokens for their work on projects launching on top of the Solana network. In addition to being used to pay transaction fees on the network, SOL tokens can be staked by a user in order to gain access to high-priority transactions.
The price of SOL tokens is expected to increase in the future as more developers migrate their applications from Ethereum, EOS, or other networks which face scalability issues.
History of Solana (SOL)
Solana was founded in 2017 by Anatoly Yakovenko – a veteran in the blockchain space. Prior to starting Solana, he was the founder of Helio (a high-performance messaging platform), CTO at Qualcomm (a leading multinational semiconductor company), and CEO at Au10tix (a fintech startup).
In May 2018, the Solana network’s test network was launched and processed 710,000 transactions per second. In August 2018, Solana announced a new consensus algorithm that allows it to achieve high performance (hundreds of thousands of transactions per second) while using minimal amounts of energy. The Solana main net was launched in October 2018.
How does SOL compare with other cryptocurrencies?
Solana is one of the few blockchain projects that has a working product. Most other coins in this space are still only ideas or concepts at this stage. It is also one of the few projects with a working mainnet in an environment where most others are still trading as ERC20 tokens or are still pre-launch.
Solana is one of the few blockchain projects that have a working product. Most other coins in this space are still only ideas or concepts at this stage. It is also one of the few projects with a working mainnet in an environment where most others are still trading as ERC20 tokens or are still pre-launch. The price of Solana (SOL) token is expected to increase in value over time, especially if it can attract more developers and users seeking alternatives to Ethereum, EOS, etc., which currently face scalability issues.
Solana (SOL) FAQ
Where can I store SOL tokens?
SOL tokens can be stored in any wallet that supports ERC20 tokens. Hardware wallets like Ledger Nano S and Trezor are also options, but they offer limited support for coins other than Ethereum (ETH).
What Crypto assets can I trade SOL against?
SOL can be traded on most major exchanges against Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
Where can I sell/trade SOL?
At the time of writing this article, SOL is listed on Binance, BitForex, OKEx, Liquid, and around 10 to 15 other exchanges where SOL can be traded.
You can check CoinMarketCap to know more about the exchanges listing SOL.
Is there an official Solana wallet?
No, there is no official Solana (SOL) wallet at the moment. Some wallets, including ERC20 tokens like MyEtherWallet and MetaMask, can also store SOL tokens.
Is Solana a good investment?
The long-term prospects of the cryptocurrency Solana may be promising, but it’s never a good idea to invest in the hope of making a quick buck. All cryptocurrency investments are risky, so don’t invest more than you can afford to lose. There’s the potential for big rewards but also big losses. Many coins could fail completely in the long run.