What is Solana
Solana is a blockchain platform designed for decentralized, scalable applications. Founded by Anatoly Yakovenko in 2020, Solana is an open source project currently managed by a Geneva-based foundation, and the blockchain itself is built by Solana Labs.
Solana is said to be one of the fastest blockchains in the world and the fastest growing cryptocurrency ecosystem, with thousands of projects spanning DeFi, NFT, Web3 and more.
The network itself is governed by a Proof-of-Stake (PoS) consensus mechanism as well as a Proof-of-History (PoH) mechanism. The Solana network focuses on high transaction throughput and short processing times – the network can supposedly process around 50,000 transactions per second.
“The Ethereum Killer”
Solana is a fast growing blockchain with striking similarities to Ethereum – often referred to as the “Ethereum killer”.
Like Ethereum, the SOL token can be purchased on most major exchanges. The true value of the token is in transacting on the Solana network, which has unique advantages.
The Solana blockchain uses a proof-of-history (PoH) consensus mechanism. This algorithm uses timestamps to determine the next block in the Solana chain.
Most early cryptocurrencies, such as Bitcoin and Litecoin, used a proof-of-work algorithm to determine the blocks in their chains. Proof of Work uses a consensus mechanism that relies on miners to determine what the next block will be.
However, this proof-of-work system is slow and resource intensive, resulting in the use of huge amounts of energy. This is one of the reasons Ethereum is migrating to PoS.
Powered by its unique combination of proof-of-history and so-called delegated proof-of-stake algorithms DPoS, the main problem Solana was trying to solve was Ethereum's scalability issues. Delegated proof of stake is a variation of the more traditional algorithm. For those who need a refresher, the proof-of-stake mechanism is a process of transactions to create new blocks on a blockchain using a system of validators.
What problems does Solana solve?
Essentially, Solana solves two of the three problems outlined by Ethereum co-founder Vitalik Buterin in his blockchain trilemma of scalability, security and decentralization.
Although Buterin originally claimed that Ethereum would address all three aspects of this trilemma, most experts believe that the network only addresses two factors: security and decentralization. However, Solana is designed to address two parts of the trilemma: security and scalability. Solana's proof-of-history algorithm provides unique security for the web. While the speed at which the Solana platform performs calculations allows for increased scalability.
Like most of the world's largest cryptocurrencies, SOL tokens can be traded on any number of platforms. This includes centralized exchanges such as Binance.US, Coinbase and Kraken to name a few. In some cities around the world, SOL tokens are even available in cryptocurrency vending machines (crypto machines).
After purchasing SOL tokens, investors will want to store the SOL tokens in a crypto wallet after purchasing them. Contrary to the name, crypto wallets are not where the cryptocurrencies themselves are stored. Rather, they are where owners store the keys to their cryptocurrencies. These wallets can be stored either online or offline. (The safest storage option is offline with a cold wallet.)
Yakovenko's previous professional experience was in the field of distributed systems design with leading technology companies such as Qualcomm Incorporated (QCOM). This experience led him to realize that a reliable clock simplifies network synchronization, and when this happens, the resulting network will be exponentially faster, with the only limitation being its bandwidth.
Yakovenko's innovative idea
Yakovenko suggested that using proof-of-history would greatly speed up blockchains compared to clockless blockchain systems such as Bitcoin and Ethereum, which struggle to exceed 15 transactions per second (TPS) globally, a fraction of the throughput handled by centralized payment systems such as Visa Inc. (V) that peak at 65,000 TPS.
Yakovenko's initial implementation began in a private database and in the C programming language. At the behest of his former colleague at Qualcomm, Greg Fitzgerald, Yakovenko subsequently ported the entire code base to the Rust programming language.
In February 2018, Fitzgerald began prototyping the first open source implementation of Yakovenko's white paper and subsequently made the first release of the project, demonstrating that 10,000 signed transactions could be verified and processed in just over half a second. Soon after, Steven Akridge—another colleague of Yakovenko's at Qualcomm—demonstrated that performance could be improved significantly by offloading signature verification to GPUs.
How do I buy Solana?
1. Choose a crypto exchange
There are numerous cryptocurrency exchanges and exchanges that range from easy-to-use systems to complex dashboards for advanced traders.
Since Solana is so popular, most cryptocurrency exchanges will be able to purchase the token, but it is advisable to stick to a few of the more popular exchanges such as Binance, Kraken, Coinbase, etc. Different platforms come with different fees, security measures, and may include other features, so it's a good idea to do your research before signing up.
2. Create an account and verify it
Get started with account registration, which is completely free on the aforementioned platforms. For additional security, 2FA - two-factor authentication - is also activated. That way, you and your device are the only ones who can give access to the account.
It then goes through a KYC process, which involves providing personal information – ID card / passport / driving license details, proof of address (eg bank statement or utility bill).
After completing these steps, you are ready to buy, sell and trade Solana (SOL) as well as take advantage of various services such as staking.
3. Fund your account
Once your account is registered and verified, you need to deposit funds into the account in order to start using the platform's buying and trading services.
The main deposit options are:
- Credit/debit card
- Bank deposit
- Peer-to-peer (P2P)
Where to buy Solana?
On Binance, the world's largest cryptocurrency exchange, deposits are absolutely free.
Withdrawal fees from the platform are as follows:
If you have opted for direct account funding, depending on which fiat currency you use, the deposit fees are:
