Solana is what we would call a fourth generation blockchain, that uses open infrastructure to tackle one of the major issues in blockchain technology: scalability. Solana is fast, secure and censorship resistant and has seen significant interest from the cryptocurrency space throughout the last couple of months and built a large ecosystem.
Mass adoption is a term often used within the cryptocurrency & blockchain industry. Everyone aims for mass adoption, though, when speaking of Bitcoin, the Ethereum Network, and various other blockchain networks one term keeps coming back: scalability.
Solana was founded in 2017 by Anatoly Yakovenko from Solana Labs. Solana Labs introduced the Solana blockchain which uses delegated proof of stake together with a mechanism called ‘Proof of History – PoH’ instead of Proof of Work or Proof to increase scalability without giving in on security or decentralization.
It’s said to be one of the most promising solutions for the congested & expensive transactions the Ethereum Network & Bitcoin are facing at the moment. This makes it perfect for decentralized applications (DApps) in DeFi, such as decentralized exchanges and staking protocols.
Solana mainly offers these above mentioned benefits thanks to their Proof of History consensus mechanism. So far, Proof o Work has been the most trusted and proven mechanism to secure a blockchain network. Though, as it’s relatively slow and expensive, Proof of Stake was introduced.
Traditionally, nodes communicate with each other to indicate a block is valid or invalid. Each node timestamps transactions and messages (blocks) according to their local clock. Because of this, confirmation times may differ between nodes, requiring them to figure out whether the block is valid or not, slowing down the confirmation process.
Solana hashes all transactions, to turn input data into unique output data, which is used for the next created hash. The blocks are smaller as they have less input data and as it still takes a little while to be processed, it’s possible to create a verifiable unbreakable chain of unique hashes in which it’s easy to confirm the timestamp, while being much faster than Proof of Work.
Besides Proof of History, there’s seven other key features that makes Solana unique:
Traditional DPos Blockchains use something called the ‘Practical Byzantine Fault Toleration – PBFT’. Summarised: ‘’PBFT is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.’’ According to Blockonomi.
Tower BFT uses PoH as its cryptographic clock. The BFT enables validators to vote on the state of the ledger, while recording previous votes as well. Rather than requiring validators to later on run through the entire transaction chain, previous votes together with the new blocks are used to generate a new vote on the state of the blockchain, significantly increasing validation speed.
The turbine breaks down input data into smaller pieces, spreading them among various nodes to process them faster using less bandwidth.
Sealevel is used to execute smart contracts in parallel, this increases efficiency on the network and basically means thousands of smart contracts could run at the same time without slowing down the network.
Blocks containing output data (transactions) are quickly processed through pipelining, where the info is validated by all nodes on the network. Done by assigning input data to different hardware, each responsible based on their specifications.
Archivers play an important role in decentralized data storage. Validators can directly pull the network’s transaction history from Archivers.
Through cloudbreak the database gets read and written at the same time, while working together with pipelining and archivers protocols.
The Gulf Stream reduces waiting time for transactions by forwarding transactions to validators before the current block of transactions is finished and approved. Thanks to this, 50,000 transactions per second can be achieved.
Solana communicates to have contributors from all over the world, rather than a core team. Though, we know of a couple of core team members such as:
Anatoly Yakovenko: Co-Founder & CEO at Solana Labs.
Raj Gokal: Co-Founder & COO at Solana Labs.
Greg Fitzgerald: Co-Founder & CTO at Solana Labs.
Eric Williams: Co-Founder & Chief Scientist at Solana Labs
Other than that, there’s contributors from all over the world. You can go through all of them and their contributions on Github at: https://github.com/solana-labs/solana/graphs/contributors.
Solana does not have a roadmap available. Though, developers and continuously working on improvements and new features. And as long as the Bitcoin & Ethereum Network continue to camp with slow transactions and high fees it’s expected projects are switching over to other network, including Solana. Especially with their grants program, where projects get funding, technical support and resources to start using the blockchain.
SOL is the native token used to power the network, and is a utility token. When making transactions or interacting with smart contracts on their network, users pay a fee in SOL. The network uses a deflationary model, meaning a part of this transaction fee gets burned and a part is distributed among the active node validators.
Where the Ethereum Network uses ERC-20 tokens, Solana uses the SPL protocol, which is the token standard for the network.
SOL is used to pay for transaction fees, and for staking as part of the Proof of Stake consensus mechanism. Where staking is incentivised & stakers delegate their vote to one of the available validators.
Users can stake their SOL tokens by transferring them to a wallet that supports staking, such as the Ledger Nano S. You create a stake account, select a validator and then delegate your stake.
SOL has increased a lot in price the past couple of months as a result of strong interest from the cryptocurrency community. Similar to what we’ve seen happen to MATIC and DOT. I personally believe projects will continue to switch to other projects and find Solana one of the most promising networks around. That said, I have a long-term position in SOL.
SOL might be a good fit for your portfolio if you’re interested in alternative blockchain networks, which are promising and are already seeing traction. It’s a project worked on by contributors from all over the world, it’s seeing continuous developments and new token features.
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