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What is Solana (SOL)?
Solana is one of the most popular, tamper-proof and decentralised platforms for computing that makes use of SOL for transactions. It enables the users to carry out transactions without any third party involvement.
The primary aim of Solana (SOL) is to improve the scalability of blockchain by using an amalgamation of stake consensus and proof history. The cryptocurrency also claims that it can support close to 50,000 transactions per second without sacrificing anything.
Solana (SOL) on a lot of levels rivals Ethereum which is known as the largest decentralised apps platform with the promise of a faster operation at a lower transaction fee. When it is looked at from the end user’s perspective Solana is a decentralised platform that lets you interact with several other decentralised apps using SOL. Many of those apps are bound to finance that lets the end-users lend, borrow, trade and invest in crypto as well as the assets.
Who are the founders of Solana (SOL)?
The CEO and Co-founder of Solana are A.Yakovenko who had previously worked at Qualcomm and Dropbox before founding Solana. Solana was launched in the March of 2020 on Mainnet Beta. Some of the notable investors in Solana are Andreesen Horowitz and Polychain.
What makes Solana (SOL) unique?
Solana can be best described as a competitor for Ethereum. Even though the availability of more apps on Ethereum is comparatively more, the high transaction fees that skyrocket at times plague the users a bit. On the other hand, Solana as a result of its humongous achievable throughput can effectively handle more transactions than Ethereum which makes the transactional fees stay low.
To put it simply, a Solana wallet that can hold both SOL and Solano-based tokens allow you to interact with many other apps available there. On a decentralized exchange, you can even trade one token for another and one can avail all of these features for a relatively small fee.
The price of Solana (SOL) has been pumping ever since its inception. The initial price of the coin at the Solana ICO initial coin offering was $0.22 while currently, the price of SOL is $137.39. One of the many reasons for the faster growth rate of Solana is because Solana is backed by the world’s leading cryptocurrency exchange FTX while another reason is the transaction fees being low on most of the competitors of Solana.
How many Solana coins (SOL) are there in circulation?
There are approximately 260 million SOL in circulation currently while the Solana Foundation announced a total of 489 million tokens of SOL will be released.
How does Solana (SOL) work?
Programmable blockchains like Solana are designed in a way that enables them to store small pieces of code called smart contracts. These smart contracts carry on the programmed actions when the conditions about the contract are fulfilled.
Like many other cryptocurrency networks, Solana also offers a wallet to users. As and when any user buys some SOL they have to transfer it to the Wallet. Here’s a beginner’s tip for those of you who want to start trading with Solana from scratch.
Unlike FTX not all exchanges support direct fund withdrawal to Solana. So, the easiest way would be transferring money to FTX and buying SOL there and then transferring it to the Solana wallet. The users can also buy or withdraw coins that are supported on the Solana Network.
With your funds available on other cryptocurrency networks and having to transfer them to Solana, again your best bet to transfer those funds would be exchanged like FTX or apps like Bridge that helps you transfer your coins from the current platform to the Solana side.
All that being said, if you’re thinking of investing in Solana don’t go ahead thinking that there will be a 100% jump next month. Solana can surely be a great choice, in the long run, however, trading can easily become gambling if it’s done with the hope of churning out quick bucks from it.
Fundamentals can aid greatly in evaluating what advantages Solana has over other investment opportunities. Solana is relatively new and hence makes it difficult in terms of analysing its past performance. However, it possesses strong leadership and attracted reputed investors till today.
Cryptocurrency investment involves a certain degree of risk so it’s wise not to invest more than one can afford to lose. They do offer high rewards but also big losses if your investments aren’t given enough thought.
The protocol of Solana serves small-time users and enterprise customers similarly. The transaction fees of the platform have always been maintained low such that customers don’t get overcharged while still not compromising on the scale.
Is Solana Network Secure?
Proof of History(PoH) and Proof of stake (Pos) are a unique combination of consensus mechanisms on which Solana relies upon.
Among them, PoH is a significant component in the Solana Protocol since it is concerned with transaction processing. The prime objective of a PoH is to record successful operations to ensure the blockchain’s trustless nature.
PoS on the other hand can be used to monitor the processes of PoH and to validate the sequence of blocks produced by PoH.
Challenges:
One of the biggest challenges for the long-term prospects of Solana is adoption. Ethereum may be pricey and relatively slower than Solana but developers are very used to its programming language. And often people are unlikely to give up on products to which they’ve got used to.
Conclusion
In a world of decentralised crypto exchanges, Solana is surely posing great competition with its strengths and weaknesses. With its burgeoning app ecosystem, support from FTX and venture capitalists in the field Solana shows a lot of promise. Even though it still has a long way to go to beat the existing competitors like Ethereum the way it’s being positioned currently can grab a decent share of the market of decentralised apps. To read more interesting posts about cryptocurrency, head to Postling blog.
