Summary:
- A look into what the Solana (SOL) platform is.
- History of Solana.
- Advantages of holding the token.
- A look into what makes Solana unique.
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The Solana coin was founded in 2017 during the initial coin offering (ICO)
The Solana coin was founded in 2017 during the initial coin offering (ICO), their aim is to keep cost low but still achieve scaling throughput beyond what is achieved by other popular blockchains. As well as trying to solve the blockchain trilemma. The SOL token was officially launched in March 2020. Since its launch Solana has become one of the Top 10 cryptocurrencies when referring to total market capitalisation.
SOL market capitalisation and Coins in Circulation.
The current number of Solana’s SOL tokens in circulation is more than 334 million and a current total market capitalisation of more than $30 billion. The supply of Solana’s SOL tokens is unlimited, it releases a number of tokens every year based on the YOY inflation rates.
The blockchain trilemma.
The blockchain trilemma refers to the three major issues in blockchain: decentralisation, scalability and security. Scalability in blockchain refers to the ability for a cryptocurrency to handle a large influx of transactions at one time.
SOL, Solana’s native token allows users to transfer value as well as blockchain security through staking.
Solana’s cryptocurrency is called SOL. It is Solana’s native token and it allows users to transfer value as well as blockchain security through staking. Solana is a highly functional open source project that implements a new high-speed permissionless 1-layer blockchain. Solana combines Proof-of-history (PoH) and the super fast synchronisation engine in one algorithm, which is a type of proof-of-stake (PoS). This algorithm can (theoretically) process over 710000 transactions per second, without scaling solutions needed.
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Proof-of-history, VDFs, proof-of-stake and synchronisation:
Proof-of-history in the context of cryptocurrencies refers to a high frequency Verifiable Delay Function (VDF). A VDF produces a unique output that is efficient and can be publicly verified. Solana uses the proof-of-history to solve the issue of the need for centralised systems to verify transactions, as the need to use centralised services defeats the object of a decentralised system.
Solana’s platform uses a proof-of-stake network, meaning the security network is not dependent on energy usage, thus the platform is environmentally friendly.
The synchronisation engine that is used by Solana is one of the main reasons they can achieve a high throughput. The reliability of Solana’s synchronisation guarantees allows them to break down the synchronisation blocks called ‘entries’ which are then validated in real time before any block consensus.
Third-generation blockchain.
Solana’s blockchain is a third-generation blockchain, and is designed to facilitate smart contracts and decentralisation applications (DApp). Solana supports nonfungible tokens (NFTs) and decentralised finance (DeFi).
What makes Solana unique?
The hybrid blockchain platform created by Solana (mixing proof-of-history and proof-of-stake concepts) is unique; they compromise on decentralisation to produce max speeds. By compromising on decentralisation the Solana platform makes it easier to scale the coins. Basically speaking, by focusing on one node chosen by the proof-of-stake mechanism which sequences messages between the nodes.
Solana also links transactions by hashing the output of one transaction and using it as the following transaction input. This is how Solana uses its proof-of-history mechanism.
Advantages of holding the SOL token.
- Solana can process up to 50000 transactions per second with extremely low fees.
- Solana has achieved a high level of scalability by leveraging the proof-of-history mechanism and several other breakthrough innovations.
- Solana has managed to achieve economies of scale and kept the transaction fees extremely low.
- Solana ensures composability between projects.
- Solana has very high network speed and high liquidity.
SOL is not difficult to buy.
How to buy SOL:
- It is necessary to obtain a crypto exchange account.
- Purchase SOL on one of the more popular exchanges such as; Coinbase, Crypto.com, Gemini, Binance, Kucoin.
The price future and history of Solana’s SOL
After its launch in March 2020, Solana’s price struggled to gain upward momentum. In the summer of 2021, hype for crypto and NFTs and growing demand in the DeFi community caused the price of SOL to triple. In 2022 the market has been extremely volatile with investor sentiment turning risk-averse, the price of SOL has struggled to show any real trend or stability. The price of Solana is expected to increase even further in the future.
Solana (SOL) Price Chart
With the current wider adverse economic conditions, the price of most cryptocurrencies are facing challenges, with changing investor sentiment, the current price is constantly changing.
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Sources: solana.com, cointelegraph.com, docs.solana.com, cryptovantage.com, statistica.com
