Solana, a blockchain network that launched in 2020, has seen a rapid increase in interest from both cryptocurrency enthusiasts and developers who are using it to build decentralized applications for industries such as finance, computer science, and even art.
Supporters describe Solana as a faster and more efficient competitor to crypto powerhouse Ethereum. The price of Solana’s native cryptocurrency, known as SOL, now ranks within the top 10 most valuable cryptocurrencies by market capitalization, according to the market research site CoinMarketCap.
But what is Solana, and how has it emerged so quickly as a major player in the crypto space? Here are some things to know about Solana and some ideas to consider before making a potentially risky cryptocurrency investment.
The story of Solana begins with a sunny California beach of the same name. Solana beach is located just 30 minutes north of San Diego, where (cryptocurrency project) Solana’s founder and CEO Anatoly Yakovenko has spent most of his life working in telecommunications. This is a bit of an understatement given that Yankovenko was instrumental in developing the technology found in all our smartphones during his 12 years at Qualcomm.
Yakovenko theorized that timestamping transactions would exponentially increase the scalability of a cryptocurrency blockchain without sacrificing its security or decentralization. He knew it was possible to build since Google and Intel had both implemented similar technologies in their own databases, albeit in a centralized manner. Solana’s revolutionary whitepaper was quietly published in November 2017.
Solana is a public base-layer blockchain protocol that optimizes for scalability. Its goal is to provide a platform that enables developers to create decentralized applications (dApps) without needing to design around performance bottlenecks. Solana features a new timestamp system called Proof-of-History (PoH) that enables automatically ordered transactions. It also uses a Proof of Stake (PoS) consensus algorithm to help secure the network. Additional design goals include sub-second settlement times, low transaction costs, and support for all LLVM compatible smart contract languages.
This allows Solana to process 50-65 000 transactions per second with a theoretical limit of over 700 00 transactions per second (compared to Bitcoin’s 7 TPS and Ethereum’s 15 TPS). In contrast to other similar projects such as Polkadot and Ethereum 2.0 (once it is released), Solana is a single blockchain (layer 1) and does not delegate operations to other attached chains (layer 2).
The team at Solana has designed their blockchain with a long-term vision in mind. This comes from founder Anatoly Yakovenko’s own experience watching telecommunications technologies almost double in capability every year during his time at Qualcomm.
Solana is developed by a company of the same name which is based in San Diego, California. The Solana team consists of former Qualcomm, Google, Apple, Microsoft, and Dropbox employees. In addition to being based on similar database technologies used by Google and Microsoft, Solana’s architecture is also inspired by Filecoin, a decentralized data storage cryptocurrency project.
To get high scalability, besides Proof of Stake, Solana had to combine the following eight functions:
Solana’s PoH consensus algorithm helps to create more efficiency and a higher throughput rate within the Solana network. So by having historical records of events or transactions, it allows the system to more easily track transactions and keep track of the ordering of the events.
Tower BFT is a PBFT-like consensus algorithm that is made to take advantage of the synchronized clock. The Tower BFT uses the PoH as its cryptographic clock which allows consensus to be reached without having to incur massive messaging overhead and transaction latency.
The Turbine protocol makes it easier to transmit data to the blockchain nodes. Turbine is able to do this by breaking the data into smaller packets. This allows Solana to address issues of bandwidth and also increase its overall capacity to settle transactions faster.
The Gulf Stream protocol plays an important role in pushing transaction caching and forwarding it to the edge of the network. This allows the validators to execute the transactions ahead of time, reducing confirmation time, faster leader switching and reducing memory pressure on validators from unconfirmed transaction pools. So this protocol is what allows Solana to support 50k TPS.
Sealevel is a hyper-parallelized transaction processing engine that is used to scale horizontally across GPUs and SSDs. With this system in place, it allows Solana to obtain a more efficient runtime and also allows transactions to run concurrently on the same state blockchains.
Pipelining is a process where a stream of input data assigns to different hardware responsible for it. So this mechanism allows transaction information to be quickly validated and replicated across all the nodes in the network.
To achieve the necessary scalability on the Solana network, it requires the use of Cloudbreak. Cloudbreak is a data structure that is optimal for concurrent reads and writes across the network.
We use Archivers for data storage. Data on Solana offloads from validators to a network of nodes known as Archivers. These nodes can be lightweight (ex: laptops) and they will be subject to a check, every so often, to ensure they are storing the right data.
As the native cryptocurrency of the Solana network, SOL is designed to be used as a form of payment either for services carried out over Solana, or as a fee for the computing power needed to run the network. Users can buy SOL on a cryptocurrency exchange and earn more by helping to verify activity on the system through a process known as staking.
Among the highest-profile Solana applications have been the sales of non-fungible tokens, or NFTs, which allow a buyer to own a one-of-a-kind digital version of a piece of art. For instance, one online collection of NFTs, known as Degenerate Ape Academy, sold a piece on the Solana network for 5,980 SOL. At the time, that amount was worth about $1.1 million.
Other uses of Solana have been in finance, where developers are seeking to shake up the traditional structure of the industry. And some projects on the network are looking to create internet technologies that are less reliant on centralized authorities than those that exist today.
If you’re investing in Solana, you’re essentially betting that some of these efforts will succeed, driving up the demand for SOL along with its value.
Solana’s total initial supply is 500 million SOL coins and is distributed in installments below:
Solana’s initial circulation of 16,350,633 SOL (3.27%) and 11,365,067 SOL (2.27%) were burned and removed from supply.
Thus, Solala will vesting 472,284,300 SOL (94.46%) in detail as follows:
Thus, on January 7, 2021, Solana’s total unlocking volume (SOL) is 91.47% excluding inflationary rewards.
Note: All figures above are based on Initial Total Supply – 500 million SOL. SOL’s Max Supply will reach 1 billion within 10 years.
SOL Coin will have the typical uses of a blockchain platform such as:
Solana is built by an all-star, experienced team from big companies like Google, Apple, Intel, Twitter, Dropbox, Microsoft…etc.
Solana development team are all individuals with skills and experience in the field of technology and security:
Along with the above prominent names are some members from other countries such as Stephen Akridge, Michael Vines, Tyera Eulberg, Carl Lin, etc.
Solana is invested by large VC funds such as Multicoin Capital, Slow Ventures, Foundation Capital…
Besides, the development in the ecosystem is getting a lot of attention, especially when it was announced that Solana Labs, Solana’s investment arms had just called for $314 million. With this money, Solana Labs can accelerate the development of projects in the ecosystem.
Solana solves the many traditional issues that earlier blockchain technology experienced. Solana displays a new structure for verifying transactions and a more efficient consensus algorithm. The platform will definitely be a strong competitor with Bitcoin and Ethereum. Solana displays the fast advancements in the crypto industry in just mere 10 years. The platform will definitely be something to look out for as it continues to develop!
Find more information about Solana:
Website: https://solana.com/
Twitter: https://twitter.com/solana
Github: https://github.com/solana-labs/
Telegram: https://t.me/solana
Discord: https://discord.com/invite/pquxPsq
Youtube: https://www.youtube.com/channel/UC9AdQPUe4BdVJ8M9X7wxHUA
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
Issac
Coincu Ventures
Wilmington, Delaware, 7th November 2024, Chainwire
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