To remain competitive in any niche, speed is of the essence. That’s why humans would rather take flights between cities than drive. The fast life has become second nature. If speed is what you need on the blockchain, then Solana has you covered.
As the fastest blockchain in the world, the Solana network can process transactions at a rate of 50,000 TPS (transactions per second), making it 3,000 times faster than Ethereum. To put that in perspective, that’s like arriving at your destination in 1 minute for a journey that would normally take 50 hrs. The speed is just unmatchable.
Solana also offers new decentralized apps (dApps) and decentralized finance projects a blockchain platform they can build on, giving developers the smart contracts and tools to help their blockchain projects thrive.
As with all great inventions, there is a story to tell about Solana and its speedy processing.
The Solana network is a base-layer blockchain capable of powering decentralized applications (dApps) just like the Ethereum blockchain. Consider Solana as the foundational building block used in construction. Just as every building needs a foundation, and so does every dApp. The foundational layer requires smart contracts and a stable, fast system to allow decentralized apps to validate transactions, verify transactions, and operate in a quick manner.
Solana’s founder, Anatoly Yakovenko, named the company after Solana Beach close to San Diego, California where he worked for fourteen years as a software developer for Qualcomm, a Fortune 500 company.
Yakovenko was not originally a big proponent of cryptocurrency. His biggest criticism was their inefficiency in handling transactions. It was one particular evening, however, in 2014, when Yakovenko came up with a brilliant idea while having a “caffeine-induced fever dream at 4 am”. Once he realized it, it seemed so obvious, but it was something no one had thought of before.
Shortly after, Yakovenko wrote a paper that introduced a new protocol idea that would leverage Bitcoin’s SHA256 hash function to make cryptocurrency transaction times exponentially faster. It was here that he introduced a new method for timekeeping on the blockchain called proof-of-history (PoH), which we’ll cover shortly.
Yakovenko teamed up with an old acquaintance and colleague from Qualcomm, Greg Fitzgerald, to build a single blockchain network. The two launched a testnet for Solana in February 2018. They also worked with another colleague, Stephen Akridge. Akridge was able to improve the project’s transaction throughput. This trio stuck together and continued to develop the project until it eventually became what it is today, Solana Labs.
While the Solana mainnet (an independent blockchain running its own network with its own technology and protocol) is still in its beta phase, there have been a host of cryptocurrency apps that have built on the ecosystem, including NFTs (non fungible tokens) and NFT marketplaces, gaming platforms, DeFi products, and more. New projects continue to flock to the platform, driving the Solana ecosystem forward.
Perhaps, the most notable proponent of Solana is their transaction speed. This is because Solana’s proof-of-history can do the heavy lifting of processing transactions on the blockchain, thus allowing it to handle more at once.
Not only are transactions on the Solana blockchain much faster, but they only cost a thousandth of a cent. This means you could make one thousand transactions on Solana for only $10 US or $12.50 in CAD. One thousand transactions on Ethereum as a comparison, could cost anywhere from five to six figures in transaction (gas) fees, as verifying transactions on the Ethereum blockchain are quite expensive.
In the Solana whitepaper, Yakovenko addressed one of the key issues with blockchains at the time, their ability to keep an accurate record of time. For example, conventional blockchains like Bitcoin and Ethereum are able to verify a large number of transactions at once — these are called blocks. In doing this, Bitcoin’s proof-of-work takes time (10 minutes) in order to decrease the odds that several validators add a brand new, valid block to the blockchain at once.
How is Solana different then? At its core function, the purpose of Solana’s proof-of-history is essentially a cryptographic clock. What this means is that there is a pre-calculated time schedule that tells all validators to calculate the same way.
To be clear, PoH is not a consensus mechanism (how blockchains verify transactions by adding new blocks to the blockchain) like Bitcoin’s proof-of-work or Cardano’s proof-of-stake. In fact, Solana also uses a proof-of-stake consensus mechanism to verify transactions like Cardano. Proof-of-history is only a part of Solana’s proof-of-stake consensus — but still, an integral one.
Proof-of-history is a process of timestamping transactions when they are added to a Solana block — this is a cryptographic clock that is used for reference as timestamps. These timestamps produce a sort of clock ‘tick’ where each clock ticks as 400 milliseconds instead of a single second like a conventional clock. That’s the amount of time it takes for transactions to be verified on Solana.
On a blockchain like Ethereum, transactions cannot happen or go through without first being verified. Solana is different because Solana’s proof-of-history is essentially a clock that is running a transaction with a verifiable delay function. Said another way, this allows transactions to be verified almost instantaneously.
In September of 2021, something unexpected happened. The Solana transaction load spiked to 400,000 TPS, flooding the processing queue and resulting in a blackout that took the network offline for a few hours.
It looks like Solana still has a ways to go to update from a beta program to a fully functional blockchain like Ethereum. Nonetheless, with its fast transaction times and low costs, it is certainly setting the standard for what the future of blockchain and cryptocurrency will be.
With a strong development team, a growing community, and a number of Solana based applications, this cryptocurrency is pushing forward into the future, and encouraging other blockchains to keep up.
If you’d like, below, you can check out the price page for Solana and other tokens we offer on the Coinberry trading platform.
If you’re interested in learning more about Solana, you can visit the links below.
Decrypt.com What is Solana
Koinos Group Solana’s Proof of History: What is it?
Coinbureu.com Solana Scaling Potential
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