What Is Solana (SOL)?
Solana (SOL) is a decentralized, public blockchain platform that applies several novel approaches to the network. It was developed to host scalable applications on its platform. And the native digital currency of the Solana network is known as the SOL token.
This crypto-computing platform was developed to achieve high transaction speeds without compromising decentralization. Solana is an open-source platform that supports smart contracts, including decentralized applications and non-fungible tokens (NFTs).
Who Created Solana (SOL)?
The Solana (SOL) platform was founded in 2017 by Anatoly Yakovenko. Previously, he held a senior position at Qualcomm before leaving to establish his own decentralized platform. The platform’s main aim was to minimize costs and maximize the throughput rate. In November 2017, he presented a white paper introducing the revolutionary concept of Proof of History.
This platform’s innovative consensus hybrid model combines two algorithms and can process thousands of transactions per second. And the platform is structured in a way that allows for scalability where required.
In 2018, the company expanded its operations and initiated its plans to run on cloud-based networks. At that point, the Solana network could verify around 250,000 transactions per second.
Over the three years that followed, Solana processed more than 40 billion transactions at an average cost of $0.00025 per transaction. Although the Initial Coin Offering began in 2017, the platform was not officially launched until 2020.
How Does Solana (SOL) Work?
The Solana blockchain network was designed with scalability in mind. And this is accomplished through a unique hybrid concept. It combines the Proof-of-Stake concept with the Proof of History algorithm to create a scalable platform and achieve high transaction speeds.
Proof of Stake is a popular concept where validators stake their own coins to the network to verify transactions. In return, they receive rewards and fees. On the other hand, Proof of History is a newer concept first introduced by Solana (SOL).
To confirm a transaction, all computers in the network must agree and add the transaction to the public ledger. With the proof of history concept, the various computers in a decentralized network keep time with each other. This is done without the computers having to communicate and collude with each other. Put simply, the PoH concept is basically a Proof of Stake, except that it incorporates the special time-variant.
PoH is not a consensus mechanism but a way to incorporate time into blockchain data. Timestamps are used to tag blocks with a specific date and time. This allows validators to follow each other very quickly. As a result, they’re aware of their orders without communicating back and forth. The network also uses cryptographic proofs, so they do not have to wait for computers to agree on a time.
The most significant disadvantage of other concepts is that the computers must constantly communicate and verify the time. This affects the speed of verification. The Solana network solves this problem with its proof of history concept, which is integrated into the PoS consensus.
Is Solana (SOL) a Good Investment?
Although Solana (SOL) offers several advantages over Bitcoin and Ethereum, it is still an underdog. The coin’s total market capitalization is just $10 billion. However, it has grown rapidly in recent months. And it’s on its way to becoming the most respected blockchain platform in the world.
Given the significant developments on the DeFi platform, Solana can be a beneficial investment for those who trust its technology. Many developers in the blockchain environment now prefer the Solana network over Ethereum to create NFTs or DApps.
The Solana network is a decentralized platform that aims to provide high-performance transactions on the blockchain at a ridiculously low cost. It is among the most advanced programmable blockchains in the industry. For these reasons, the market capitalization of SOL has increased by 300% since its launch in 2019.
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