As blockchain technology is being implemented in almost every industry across the world, blockchains are now required to process a large number of transactions per minute. First-generation blockchains like Bitcoin only process 4.6 transactions per second. Second-generation like Ethereum is not much better, only able to process 10-15 transactions per second. The triangle trilemma is one method that can be used to classify a blockchain network. The trilemma states that a blockchain can have any two of these features, but not all three. For example, Bitcoin chooses security and decentralization at the expense of scalability. XRP opts for security and scalability, sacrificing decentralization. Other blockchains exist somewhere on the spectrum, with each network having to make choices about which features it values most.
Many of you will know that most cryptocurrency projects have either failed to deliver on their promises or never really had anything all that special about them to begin with. Solana does not fall into this category. It is a cryptocurrency project with a radically different approach to how blockchains work. It focuses on an element that is so devilishly simple that it makes you wonder why you did not think of it: time. As it turns out, introducing a decentralized clock to a cryptocurrency blockchain makes it more efficient than anyone could have possibly imagined. The first thing to know about Solana is that it’s a technically complex blockchain. Anyone who wants to do the deep dive on the network should check out the Solana documentation, as well as this explanation of the consensus mechanism.
Solana, conceived in 2017, is a Practical Byzantine Fault Tolerance-based (PBFT) Proof of Stake (PoS) blockchain built from the ground up by Switzerland-based Solana Labs to take one of tech’s biggest challenges: scaling blockchain for global adoption. The history of Solana dates back to November of 2017 when CEO Anatoly Yakovenko published a whitepaper describing Proof of History, a technique for keeping time between computers that do not trust one another. That was meant to introduce a clock before consensus on blockchains. Solana promises a throughput of 50,000 TPS across a network of 200 nodes, and it does so without sharding and any additional pain in terms of UX, latency, or composability for developers.
Similar to Ethereum and Tezos, Solana supports smart contracts. This means that developers can build decentralized applications, like a decentralized exchange, on top of Solana. What separates Solana from other smart contract platforms is that Solana can scale to hundreds of thousands of transactions per second. The secret sauce which makes all of this possible is what Solana calls, Proof of History (PoH). Proof of history is a clock used before consensus that solves the time problem in decentralized systems. What if instead of trusting the timestamp you could prove that the message occurred sometime before and after an event? When you take a photograph with the cover of the New York Times, you are creating proof that your photograph was taken after that newspaper was published, or you have some way to influence what New York Times publishes. With Proof of History, you can create a historical record that proves that an event has occurred at a specific moment in time. On most blockchains, the transactions are grouped together in a block, and the block is written to the blockchain. With this architecture, it’s possible to tell that one group of transactions came before or after another, but it’s not possible to discern which transactions came first or last within that block.
According to Yakovenko, the main idea behind the Solana is to find a way for a “decentralized network of nodes to match the performance of a single node.” To achieve this we need to first optimize how the nodes in the network communicate. Validators are an essential part of the Solana ecosystem as provide computing resources to maintain the integrity of the ledger and earn rewards while doing so. Anyone can run a validator node on Solana’s permissionless test net and Mainnet Beta networks. The platform is also running Solana’s incentivized testnet event Tour De SOL for validators to flex their validation skills, earn tokens, and secure the Solana network. Interested validators from all around the world, except the US, can register for Tour de SOL by submitting a form and then completing a KYC/AML. Then they have to join a Discord Channel as it is their primary communication channel. Staking on Solana is just like other PoS blockchains. To stake, users can transfer their SOL holdings to a wallet that supports staking. SOL holders can choose to delegate some of their SOL to one or more validators, who process transactions and run the network on their behalf. Staking rewards are based on inflation and a portion of transaction fees. As the Solana is currently in beta mainnet, staking rewards are not enabled on the network but may be enabled in the future.
Through this combination, Solana is completely able to ensure security, decentralization, but the scalability is greatly improved. With new technologies based on the 8 main factors, Solana promises to be an optimal blockchain for decentralized financial projects, becoming a formidable opponent of the big guys like Ethereum, Algorand (ALGO), TROY, Origin,…
Proof of History (PoH) Solution:
Tower BFT consensus mechanism: a PoH version of the PBFT consensus mechanism.
Turbine blockchain transfer protocol.
Gulfstream mempool little transaction forwarding protocol.
Parallel transaction processing tool Sealevel.
Pipelining transaction processing unit.
Horizontal expandable Cloudbreak memory.
Archivers data storage.
As we already know, Solana tries to improve scalability. One of the features that help to achieve it is the so-called Gulf Stream. By easing the block confirmation, this blockchain can process over 50,000 transactions. Gulf Stream catches and forwarding the transaction even before the block confirmation. The feature called Sealevel allows users to process several smart contracts in parallel. It can be possible because Solana describes all the states during execution. The smart contracts support Solidity and JavaScript.
SOL is a native token of the Solana network. The coin is used for the work of the ecosystem so users can stake them. Validators are chosen according to the amount of SOL they have. The more SOL tokens on the account, the higher chance to get the reward for a transaction. The goal of the Solana project is very relevant. Increasing network bandwidth is a real challenge for most platforms currently on the market. The project can become a real competitor to any other means of payment if developers will reach their main goal. Remember that the project’s development depends on milestones it has reached, so always do your own research before investing in any digital project. Solana is fast because it’s set up in such a way that the network believes that all transactions are legal unless proven otherwise.
Because it’s so fast, Solana can support all sorts of projects. Decentralized exchanges work great on Solana. A DEX that’s running on Solana could clear tens of thousands of transactions per second with an average trade costing only $0.00001. That would enable a truly massive exchange, bigger than anything that has ever existed in crypto.
n today’s volatile market, deciding exactly which coin or token to invest in is very difficult. Therefore, we can only rely on a few main points for reference and then make investment decisions:
Solana development team
Partnership and development progress
