Even with Bitcoin (BTC) and Ethereum (ETH) already dominating the crypto market, there are still developers who aim to make better technology. Among them is Solana, one of the most promising scalable blockchain infrastructures to release in 2020. You can buy its native currency, SOL, at some of the leading exchanges and brokerages on the internet. This includes Gemini, eToro, Robinhood, and SoFi.
Solana is a high-performance blockchain designed for builders in creating crypto-related apps like decentralised applications (dApps) or marketplaces. It uses a proof-of-stake (PoS) system to benefit from validators’ investment in powering up its systems. This is the same consensus mechanism used by the Ethereum network.
Although its similarities to Ethereum caught many investors’ attention, what makes it a headline in crypto news on Bitcoin-io is how it’s different. Here are the advantages Solana has over its contemporaries:
Solana is faster and more explosive than Ethereum
The Solana blockchain was created much later than Ethereum, allowing it to benefit from the latest technology in decentralised network development. It can provide faster transactions at a reduced cost.
Ethereum, post-Merge, can only consistently issue one block every 12 seconds, allowing them to handle a minimum of 20,000 transactions per second (TPS). Meanwhile, Solana can consistently deliver 50,000 to 65,000 TPS as it issues a block every 3 seconds.
How Solana works for users and validators
Solana is a network aimed to host a wide variety of services. Therefore, it has plenty of tools all kinds of users can use to create any kind of crypto-based business or project. Here is a quick run-down of the Solana network as a platform:
Solana consensus mechanism
The PoS system is only one of the consensus mechanism systems used in Solana. It uses hybrid using that and proof-of-history (PoH) which is always used in tandem with either PoS or proof-of-work (PoW).
In Solana’s case, it used the former because it’s a more sustainable option. PoH timestamps every transaction, preventing censorship in record keeping and ensuring accuracy of events. PoS is the mechanism that tracks which validator should handle a new transaction and block creation.
Like all crypto, SOL can be minted per block issued but the annual rate decreases over time. As of 2022, Solana increases its supply by 8% annually which will be lowered by 15% every year. The lowest is a fixed ongoing issuance of 1.5% per year.
The network burns half of the fee paid per transaction as a means to combat inflation. Validators take the rest of that fee as payment on top of the block issuance reward.
Just like Ethereum, Solana allows users to create their own digital assets called an SPL Token. This is a currency that can exist within a network created on the Solana blockchain which can be transferred and exchanged with other SPL Token or SOL. It also allows for the creation of non-fungible tokens (NFTs) which blew up in 2021.
Just like Ethereum, Solana’s SOL acts as a universal resource among the network’s users. It can be traded for an SLP Token, used as payment or investment for a project on the network, or exchanged online for other currencies. The crypto has an 8.42% volatility index compared to Ethereum’s 9.41%. It’s a relatively high rate that will explode with the crypto trend.
Solana’s goals as a cryptocurrency
The developers, Solana Labs, aim to address scalability, security, and decentralisation issues that inevitably appear when one service monopolises the market. Thus, Solana serves to rival Ethereum and its other rivals like Polygon and Cardano. It has more or less succeeded in that regard as it is among the most featured platforms in recent crypto news on Bitcasino-io.