Crypto Global

What is Solana (SOL)?

Sep 7, 2021

Solana is a 3rd generation Proof of Stake blockchain network that focuses on fast transactions and high throughput. It uses a unique transaction mechanism that allows very high speeds. The users can pay their transaction fees and the interaction with smart contracts with the network's own cryptocurrency SOL.

One of the biggest challenges for blockchain technology is currently the issue of scalability. More and more projects are growing steadily and often reach their limits in terms of transaction speeds and confirmation times. This increases the transaction fees and the transaction duration becomes longer. Solana aims to lift these restrictions without compromising the security or decentralization of the network. Bitcoin, Ethereum, and many other projects have scalability and speed issues with their approach.

The Solana Blockchain was founded by Anatoly Yakovenko in 2017 and uses a new method for verifying transactions. Using the new method called Proof of History, the Solana blockchain can process thousands of transactions per second. The Proof of History is a method to create a trustworthy system for determining the time of a transaction. The Proof of History is seen as a small revolution in the world of blockchain, as the time of a transaction cannot serve as the basis for building consensus in other blockchains. The tracking of the transaction sequence is bundled in blocks with certain time stamps, e.g. with Bitcoin, with each node validating the blocks in consensus with other nodes. However, this process with Bitcoin ensures that there is a considerable waiting time for the nodes to confirm a block over the network.

The Proof of History is part of the Proof of Stake mechanism. It is important to understand that Proof of History is not a consensus mechanism like Proof of Work or Proof of Stake. Rather, it is a way of reducing the time it takes to confirm the order of the transactions. In short, nodes take much less time to check the order of the transaction.

Solana's technology is extraordinary. It's a cryptocurrency project that offers almost everything. A solid team, a powerful blockchain, logical economic incentives, decent tokenomics, etc. There is a lot behind Solana and that is the reason for the huge price hike.