Solana network was launched less than 2 years ago but is already one of the major competitors for the Bitcoin and Ethereum blockchains due to its speedy and cheap transaction processing. In this article, CoinCasso breaks down the Solana blockchain platform and its main characteristics.
Anatoly Yakovenko started Solana ICO in 2018 but the official launch of the blockchain wasn’t possible until 2020. Yakovenko is the founder of Solana Lab, who has a background in software design and is interested in implementing blockchain technology to enable higher processing speeds.
Solana’s blockchain aims at resolving the so-called blockchain trilemma – a concept offered by Vitalik Buterin, the creator of Ethereum. According to this trilemma, the three huge challenges when building a cryptocurrency network are security, scalability, and decentralization. Buterin claims that it’s almost impossible to overcome all of them at once – one of the components is to be compromised. Most blockchains cannot provide a perfect solution and bypass all these issues. However, Solana offers a unique solution to process transactions even faster and cheaper.
Blockchain technology is still relatively new, which means that there’s still lots of space for improvements and advancements. Technological progress is the crucial factor that allows further development and enhancement of blockchains, including Solana.
Let’s get straight to business and talk about the uniqueness of Solana’s blockchain. First, we need to understand what is a consensus mechanism. To put it simply, it’s a mechanism in a computing or blockchain system on agreeing regarding pieces of data. Blockchain platforms use such mechanisms to validate transactions through nodes. The first one and the most common consensus mechanism is called proof-of-work (PoW).
One of the reasons why Solana is different from all the other networks is that it’s using the combination of proof-of-stake (PoS) and proof-of-history (PoH) mechanisms.
As its name suggests, this consensus mechanism is based on staking. Those who want to validate transactions make stakes. The more native tokens of a particular blockchain one owns, the more chances they will be chosen by an algorithm to become a validator and receive the transaction fees (network fee).
This consensus mechanism is made to assure the correct sequence of blocks and transactions. Solana’s blockchain is divided into time slots – the validator processes a transaction and turns it into a block. A lead node for such a slot is chosen with the help of a proof of stake mechanism in advance, to save the time needed to process transactions.
The combination of proof-of-stake and proof-of-history is what makes Solana’s blockchain stand out from the crowd among such large networks like Ethereum or Blockchain. With such an approach, the Solana network preserves all three factors: security, scalability, and decentralization. Compared to the proof-of-history mechanism, Solana is also more environmentally-friendly because mining and transaction processing takes less time and electricity.
SOL is a Solana native token that is mainly used for making stakes for validating transactions. Solana (SOL) is also a governance token to offer changes and improvements both to the platform and blockchain. Just like the Solana blockchain, SOL was created in March 2020 but has already made it to the top 10 cryptocurrencies. Only during the past year, Solana’s (SOL) price increased by 63%.
At the moment, there are more than 500 million tokens in circulation but only 40% are available to the general public. The rest 60% are controlled by the Solana foundation and the network creators. The current circulating supply of coins is 345.6 million with a market capitalization of $14.7 B.
CoinCasso exchange is a revolutionary cryptocurrency exchange platform with a broad vision and great potential. Our goal is to build an all-in-one crypto solution for personal finance. With more than 75 000 active users, our startup supports two major blockchains – ERC20 and Bep20. We’re also adding both the Solana network and Solana (SOL) token to our application in the near future. Now, our users will be able to buy, sell, and trade tokens run on the Solana network. The launch date will be announced soon on our social media:
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Solana is an innovative blockchain platform that boasts high speed and low costs to process transactions in cryptocurrency. Solana blockchain is a pretty new network as it launched only in 2020. Solana also supports applications run on smart contracts, including DeFi solutions and NFTs.
Solana's famous for its low-cost and high-speed crypto transaction processing. Such excellent performance is achieved with proof-of-history and proof-of-stake consensus mechanisms. The node validator with the largest number of Solana tokens gets the right to validate the cryptocurrency transaction and save it as a new block on the blockchain. Such validators also receive a network fee for completing this task.
Despite being one of the newest networks compared to such giants like Ethereum and Bitcoin, Solana has already built a reputation of a reliable, secure, and stable platform. Proof-of-history and proof-of-stake consensus mechanisms combined allow quick and cheap transaction processing. This makes the Solana platform more attractive, functional, and usable for both users and developers.
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