Solana is a public blockchain platform with smart contract functionality. Its native cryptocurrency is SOL, and Solana claims to offer faster transaction times and lower costs than its competitors.
The Solana testnet has recently been launched, which provides an opportunity to see how the technology stacks up against others in smart contract platforms such as Ethereum, EOS, and NEO.
In this article, we’ll look at some of the features offered by Solana, how it compares to other solutions, How to buy sol and what the future might hold for this exciting new blockchain solution.
What is blockchain?
When people talk about blockchain, they’re talking about a secure, distributed ledger that can be used to record financial transactions.
It’s like a spreadsheet that has been duplicated thousands of times across a network of computers.
The network is designed in such a way that no one in the network can alter entries without everyone else approving simultaneously.
In other words, you need consensus from all network members before you can add anything new to it. This creates an exceptionally reliable and verifiable system for recording data.
What are the benefits of using blockchain?
In short, blockchain is a way to exchange value and information over a network of independent computers (nodes) without relying on a centralized third party such as a bank or payment processor.
In addition to reducing dependency on third parties, all participants in an online blockchain are anonymous, ensuring privacy for cryptocurrency users.
There are several other benefits that could apply here, depending on your audience, like reduced cost, faster payments, higher security, etc.
Why do we need another platform for blockchains?
The problems with existing blockchain platforms are that they’re either too slow (e.g., Bitcoin) or too expensive (e.g., Ethereum).
Solana aims to solve both of these issues through its improved consensus mechanism and delegated proof-of-stake approach.
While Bitcoin transactions can take over 10 minutes, and Ethereum transactions can cost more than $1.796, Solana has achieved transaction speeds of roughly 1 second and a low per-transaction cost.
This is due to its unique Proof of History algorithm, which verifies transactions in each block by looking at previous blocks on other chains and checking for consistency.
In addition, developers can build their own side chains onto Solana’s mainchain via SputnikVM; there’s no need for separate blockchains like EOS or TRON.
How does the Solana compare against other blockchains?
Solana can process ~50,000 transactions per second on-chain and has a 400 milliseconds block time. This is much faster than Bitcoin and Ethereum.
That being said, it also uses a more expensive Proof of Stake consensus. Because of these tradeoffs, Solana aims to be a platform for high-volume applications, while Ethereum is used for smart contracts by most ICOs and other dApps today.
Check out our transaction guide to get an idea of what kind of transactions you can expect at different speeds.
To learn about Proof-of-Stake (PoS) versus Proof-of-Work (PoW), read our post on that topic.
Is it too late to invest in this project?
The blockchain ecosystem is growing at an incredible rate, and it seems like new blockchain projects are popping up every day.
Some of them will inevitably fail with so many projects out there, while others will thrive. Can you invest in every project? No way!
But as more and more people get into cryptocurrency, it’s important to know what’s worth your time and money.
Is Solana one of those projects? Yes. It is. You should invest in Solana now.