Solana is a layer 1 blockchain designed to facilitate smart contracts and the creation of new decentralized applications (DApps). With its user-friendly interface, sleek branding, and easy-to-understand messaging, this blockchain has become famous. Solana gained popularity after entering the blockchain gaming world with a $100 million fund. It has also partnered with Faraway, one of the world’s leading game studios, to develop blockchain-based games.
Solana has become prominent in the world of non-fungible tokens (NFT) and decentralized finance (DeFI) as crypto enthusiasts seek new platforms with faster and cheaper transactions. Solana attracts talented young teams of developers and creators looking to build new blockchain projects. It operates on a hybrid proof-of-stake (PoS) and proof-of-history (PoH) protocol. By combining Solana’s unique PoH algorithm with the speed of PoS, Solana dramatically increases transaction speed. This benefit appeals to teams looking to build scalable DApps and game projects that support embedded NFTs.
The network can process an average of 65,000 transactions per day at an average cost of $0.00025 per transaction, which makes it not only efficient but also cheap compared to other blockchains.
Solana’s investors include some of the most prominent venture capital firms in the crypto space: Andreessen Horowitz (a16z), CoinShares, Alameda Research, Coinfund, and ParaFi Capital.
Major application development projects within the Solana ecosystem include:
- Serum, a noncustodial and decentralized exchange (DEX)
- Star Atlas, a multiplayer blockchain game
- Solarians, a collection of 10,000 generative NFTs
- Tulip Protocol, a crypto yield aggregator with low fees
- ORCA, an automated market maker
Why do people use Solana?
Solana’s SOL cryptocurrency has become one of the most valuable cryptos as investors and teams have quickly backed this PoS blockchain alternative. In particular, the GEN Z crowd jumped on board, buying the project’s NFT Degenerate Apes and embracing its fast, low-cost transactions.
In 2017, Solana founder Anatoly Yakovenko published a white paper detailing a new blockchain transaction time-logging technique called PoH. Until then, blockchains were limited in terms of speed and scalability because they relied on the network to confirm all transactions. After teaming up with a former colleague from QUALCOMM Inc. (NASDAQ: QCOM) appointed Greg Fitzgerald to build a new blockchain network, they released a second white paper and tapped Stephen Akridge. The founding team, which also included former Apple Inc. (NASDAQ: AAPL) engineers, would go on to create Solana Labs.
In 2018, the newly formed Solana Labs raised over $20 million in private token sales, which became its Series A funding for the Solana blockchain. After many iterations and tests, the team launched a testnet, followed closely by the mainnet.
Since its launch, the Solana ecosystem has grown exponentially. Solana’s DeFi ecosystem currently has over $8.6 billion in total value locked between its various platforms.
Where to buy SOL
Solana’s cryptocurrency is SOL. It is Solana’s native utility token that provides a means of transferring value and staking. SOL was launched in March 2020, becoming one of the top 10 cryptocurrencies entering the space.
To buy cryptocurrency, you open an account with an exchange or trading platform like eToro, verify it with personal identification, receive verification, and purchase the token.
SOL tokens can also be purchased on most exchanges. Top cryptocurrency exchanges for Solana trading include Coinbase Global Inc. (NASDAQ: COIN), eToro and Gemini.
Gemini is a cryptocurrency exchange and custodian that offers investors access to over 100 coins and tokens. Founded in the United States, Gemini is expanding globally, particularly in Europe and Asia. The offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.
Gemini is one of the only brokers that offers multiple platform options depending on skill level. New investors will love Gemini’s streamlined mobile and web app interface, while advanced investors may appreciate all the tools that ActiveTrader comes with.
In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review.
- New investors looking for a simple mobile and web app
- Day traders looking to use technical analysis tools
- Users looking for a one-stop-shop to buy, sell, and store all their cryptos
- Easy and fast registrations – can start in as little as 5 minutes
- Multitude of platforms to accommodate traders of all levels
- Hot wallets include insurance to protect against theft and hacking attempts
- Charges both commission and convenience fees for users who buy and sell through the desktop or mobile app
securely through the eToro website
Disclosure: eToro USA LLC; Investments are subject to market risk, including possible loss of principal.
eToro, headquartered in Cyprus, England and Israel, has been providing forex products and other CFD derivatives to retail clients since 2007. A major strength of eToro is its social trading operations, including OpenBook, which allows new customers to copy the best performance of the platform. Its social trading features are top-notch, but eToro loses points due to its lack of tradable currency pairs and disappointing research and customer service features.
- US-Based Cryptocurrency Traders
- Investors looking to CopyTrade with other traders
- Simplified user interface
- Several major cryptocurrencies and altcoins
- Extensive network of social trading features
- Large customer base for new traders to emulate
Blockchain Solana vs other Blockchains
The main difference between Solana and other layer 1 blockchains is its built-in PoH mechanism. Although some argue that PoH drives elements of centralization that run counter to the decentralized future of finance, many projects understand the benefits and potential of PoH to increase transaction speed. Instead of relying on block production, the Solana network can use a historical record that proves that an event happened at a specific time. By maintaining its own clock, it does not have to wait for confirmation on the network.
In most blockchains, validators are chosen via PoS. They then create the next transaction block, which is broadcast to other nodes in the network. The rest of the network audits the new block against its version of the ledger. The nodes must agree on the legitimacy of the new block. When you take intermediaries out of the equation, you can’t speed up the process, but reaching an agreement without the need for intermediaries is an essential part of decentralized technology. Solana’s blockchain is divided into time periods where a validator ingests transactions and produces a block.
This system saves time because the leaders are chosen before each slot. Solana’s PoH proves transactions are in the correct sequence and predicts the correct leader so developers can speed up the process of choosing the next block of transactions.
This procedure has led some to believe that Solana is more centralized than other blockchains. While PoH has benefits and can speed up transactions, some fear that Solana’s voting mechanism will ultimately lead to greater centralization.
How to store SOL safely
Before investing in cryptocurrency, consider where you will store your digital assets. You need a software or hardware wallet. It is not recommended to store your crypto on an exchange, which are targets for hackers.
Software wallets are free applications that allow you to securely store your crypto on a PC or mobile device. Hardware wallets like Ledger are the safest way to store cryptocurrency because they store your assets offline on a physical device.
securely through the Ledger Hardware Wallet website
Launched in 2014, Ledger has evolved into a rapidly growing company developing infrastructure and security solutions for cryptocurrencies as well as blockchain applications for businesses and individuals. Born in Paris, the company has since grown to over 130 employees in France and San Francisco.
With 1,500,000 Ledger wallets already sold in 165 countries, the company aims to secure the disruptive new class of crypto assets. Ledger has developed a distinctive operating system called BOLOS, which it integrates with a secure chip for its line of wallets. So far, Ledger is proud to be the only market player to provide this technology.
- ERC-20 Tokens
- All experience levels
- Easy to set up and use
- Supports over 1,500 different digital resources
- Long battery life
- Bluetooth Connectivity Features
Will Solana succeed?
Solana has successfully built a scalable blockchain with superior branding that has made it attractive to developers and projects that want to get involved in the world of DeFi. Although it has experienced a number of setbacks along the way, including outages that left many wondering about network security, it still has the ability to evolve its ecosystem with new projects, with Arcade Game Studio and Coachella joining as partners.
Although the crypto world is growing rapidly, blockchain ecosystems may need to balance speed and reliability as DeFi begins to become more of a part of everyday use. Solana has secured funding from some of the most reputable venture capital firms and seems to have a bright future in the blockchain world.