What Is Solana SOL? Learn About Ethereum’s Growing Rival

Solana is a programmable smart-contract blockchain that aims to achieve high transaction throughput without sacrificing decentralization. It is a direct competitor to Ethereum, and will be even more so once Ethereum has completed its merge and switched to Proof-of-Stake. The Solana project pioneered a bundle of novel approaches, including the Proof-of-History mechanism, which differentiates it from other Layer 1 blockchains. Although it has had some issues with outages, the speed it offers and the number of projects on the horizon make it an exciting blockchain platform.

In the case of cryptocurrencies, the order of transactions would rarely coincide with the order of blocks on the blockchain. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented.

How to buy Solana

In June 2018, the project scaled up to run on cloud-based networks, and a month later, the company published a 50-node, permissioned, public test net consistently supporting bursts of 250,000 TPS. Also, due to these disruptions in the blockchain system, some of the wallets of Solana customers were hacked. This Web3 compatible wallet can be installed directly on your browser as a “Chrome Extention”, https://www.xcritical.com/ allow you to directly interact with websites in the Solana Ecosystem. Phantom wallet is non-custodial, meaning only you will have access to your cryptocurrencies. Phantom can also be used with Ledger Hardware wallets for additional security. The innovations revolve around how information is sent within a network – with the objective of making Solana as fast as how data transferred.

  • Ethereum has first mover advantage, and with its massive ecosystem, it is second only to Bitcoin in terms of market capitalization.
  • The project provides eight core innovations, chief among which is Proof of History, which keeps time on the blockchain and dramatically increases its capacity.
  • As the Solana ecosystem grows and the blockchain processes more transactions, SOL will become more valuable as there will be greater demand from stakers, developers, and users.
  • In its worldview, sharding — that means running multiple blockchains in parallel to increase transaction throughput — slows down a network because all of these chains have to communicate with each other.
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Each node can add a block without specifically agreeing to the other node. Solana has an active developer community that updates the blockchain to add new features. You can view all the market stats for Solana on its dashboard, aptly named Solana Beach. Solana is a blockchain network founded by the Swiss Solana Foundation, a non-profit that focuses on the development of the blockchain system. But as with all cryptocurrencies, investors should consider speaking with a financial advisor before investing in Solana. Solana has a total supply of 511.6 million SOL tokens, 355 million of which have already entered the market.

What is Blockchain Analytics, and How Does It Work?

The time, in this case, is based on block height, which is simply the block number where the transaction is taking place. Combined with a Verifiable Delay Function algorithm, the blockchain can efficiently timestamp events taking place. Solana is a fourth-generation blockchain, https://www.xcritical.com/blog/what-is-solana-crypto/ and it comes with all the bells and whistles of its predecessors, along with some more features. These new features allow it to perform fast transactions in a scalable way. Routledge points out that trying to process transactions quickly usually requires centralization.

What does the Solana Crypto do

Created in 2017 by Anatoly Yakovenko, a former executive at Qualcomm, Solana aims to scale throughput beyond what is typically achieved by popular 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 any scaling solutions needed. Time is something we all take for granted, but most blockchains don’t make any reference to time when they record transactions. Agreement on time is one of the most difficult problems to solve in distributed systems, especially adversarial systems like blockchain, where network nodes can’t trust an external source of time. When one project realized that no one was effectively keeping time in crypto, it decided to introduce a clock to the blockchain, which had the effect of making it much more efficient.

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If you’re looking to speculate in Solana or other cryptocurrencies, you can trade them directly or you can invest in the companies that could profit from the growing interest in the sector. Again, think of Solana as a token that can power various apps rather than merely as a currency that transfers monetary value from one person to another. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. Our editorial team does not receive direct compensation from our advertisers.

It is not possible to mine Solana as the blockchain is not based on proof of work consensus (unlike Bitcoin mining). Solana can only be purchased on exchanges or earned via staking mechanisms. Solana makes it easier for data to be transmitted to every blockchain node by dividing them into smaller packets.