Solana is an open-source cryptocurrency that implements a new, permissionless, and fast layer-1 blockchain. It was founded in 2017 by Anatoly Yakovenko, a former Qualcomm executive, who aims to scale throughput beyond what popular blockchains typically achieve while keeping costs low.
Solana’s third-generation blockchain architecture is intended to facilitate the creation of smart contracts and decentralised applications (DApps). The project is compatible with many decentralised finance (Defi) platforms and nonfungible token (NFT) marketplaces.
Solana employs a novel hybrid consensus model that combines a novel proof-of-history (PoH) algorithm with a lightning-fast synchronisation engine. It is a variant of proof-of-stake (PoS). As a result, the Solana network can theoretically process over 710,000 transactions per second (TPS) without the need for scaling solutions.
What makes Solana unique?
Solana’s bold design aims to solve the blockchain trilemma, a concept proposed by Ethereum creator Vitalik Buterin, in a novel way. This trilemma describes three main challenges that blockchain developers face when creating blockchains:
- Decentralize
- Security
- Scalability
The Solana blockchain platform has proposed a hybrid consensus mechanism that compromises decentralisation to maximize speed. Solana is a one-of-a-kind project in the blockchain industry due to its innovative combination of PoS and PoH.
In general, blockchains have greater scalability, with the number of transactions per second they can support determining how much and how well they scale. Decentralized blockchains slow down by time differences and higher throughput, which means verifications, transactions, and timestamps take longer.
In a nutshell, Solana’s design addresses this issue by selecting one leader node based on the PoS mechanism that sequences messages between nodes. As a result, the Solana network benefits by reducing workload, which leads to increased throughput even in the absence of a centralized and precise time source.
What is the Solana ecosystem?
Solana is the world’s first web-scale, open-source blockchain protocol, allowing developers worldwide to create decentralized applications (dApps) on its ecosystem. Solana is currently capable of 50,000 TPS (transactions per second), making it the fastest blockchain. Many developers and institutions are choosing to build on its ecosystem because it provides the necessary security, censorship resistance, and cost-efficiency for world-class dApps.
This Solana ecosystem is a collection of dApps built on Solana’s open infrastructure, as well as a suite of technologies that work in tandem with the protocol to improve its speed and scalability. Because of the ecosystem’s open protocol and a suite of developer resources, anyone can start building on it.
How does the Solana ecosystem work?
Solana employs a combination of Proof of History (PoH) and Proof of Stake (PoS) to expedite transaction processing. Proof of History provides an easy way to validate transactions without nodes. Proof of Stake is a method of validating transactions in which individuals stake cryptocurrencies.
PoH operates on a simple formula: it assigns a given node the “leader position,” and any given node with the “leader position” is required to generate the entire “proof of history” statement. After receiving the responsibility, the blockchain network’s leader node organizes other nodes on the blockchain network to generate a proof of history statement.
The leader node also pushes the current transaction’s execution, and it finally publishes the transactions in their final nodes with “verifiers.” Verifiers repeat the transactions to “verify” them. Verifiers also make duplicates of transactions and publish them. Each Solana network has a single leader. The verifier node performs intelligently and has the same capabilities as the leader node. However, the verifier node can also be elected as a leader via “proof of stake” elections.
Solana performs best with a combination of PoH and PoS, allowing it to process at a low cost when compared to the blockchain networks of bitcoin and Ethereum.
What does Solana’s historic and predicted price look like?
Solana investors had the best year in 2021. On January 1, 2021, the cryptocurrency was priced just below $0.5, but by the end of the year, Solana had risen above $170. Most websites voted Solana as one of the best cryptocurrency investments in 2022.
Solana’s current price is $83.01 USD, with a 24-hour trading volume of $2,286,143,970 USD. CoinMarketCap currently ranks #9, with a live market cap of $26,400,108,396 USD. The circulating supply is 318,044,177 SOL coins.
While some experts and crypto forecast platforms use a conservative approach to forecasting, others use a more realistic and optimistic trend.
Some expert views in Solana’s future predictions are:
Based on our SOL price prediction, a long-term increase is expected; the prognosis for 2027 is $1811.720. With a 5-year investment, the revenue is expected to be around +968.41% – Wallet Investor.
SOL has a promising future. It may get marginally impacted, but bulls will be back, and by the end of 2023, its price may skyrocket to $676 – Coin Price Forecast.
Solana’s advantage over top cryptocurrencies
Solana’s main advantages over its competitors are:
Industry-leading speed:
It’s the ability to process transactions quickly. This single factor has significantly contributed to Solana’s success. When compared to other cryptocurrencies, Solana is unrivaled in terms of transaction speed and transaction confirmation time.
Scalability:
Because of its protocol, Solana has arguably the most scalable blockchain ecosystem in the market. The current roadmap for the company anticipates 1 million TPS and 150ms block times in the future.
Cost-efficiency:
Solana is one of the most affordable ecosystems for developers and Defi enthusiasts, with transactions costing an average of US$0.00025, whereas Ethereum costs an average of US$6.85.
Where can you trade Solana?
Not all cryptocurrency exchanges are the same. Some websites allow you to invest in over 100 cryptocurrencies, whereas others only allow you to invest in bitcoin and a few other altcoins. It’s also essential to consider the security and reputation of the cryptocurrency exchange you choose. Carret is one of the secure and reliable cryptocurrency exchange platforms where you can trade Solana. With 24Carret’s product offering, you can earn up to 17% APY on your crypto holdings on Carret.