Solana is a cryptocurrency or a form of digital currency that exists solely online. Solana was launched in April 2019 and initially traded for less than $1 per coin. Since then, its price has risen at a breakneck pace, and as of November 2021, Solana was trading above $200. According to CoinMarketCap.com, it is one of the top ten largest cryptocurrencies in terms of total value.
In this article, we shall explore everything you need to know about Solana and how it works.
What is Solana?
Solana is one of the most widely used cryptocurrencies, as there are over 10,000 currently in existence. Solana is the Blockchain, while Solana token (sol) is its individual unit.
It is based on a decentralized computer network that utilizes a disbursed ledger known as blockchain. This blockchain database manages and tracks the currency, effectively recording every transaction that has ever taken place in it, similar to a long-running receipt. The computer network monitors currency transactions and verifies the data’s integrity.
This decentralized configuration strengthens the network’s resilience, and users can conduct transactions without the assistance of a third party. Solana bills itself as the world’s fastest blockchain, boasting of its ability to verify 65,000 transactions per second at a cost of less than a penny per transaction.
While many people think of cryptocurrency as a form of payment, it’s more useful to think of it as a token that can be used to power or enable other applications on the platform. For instance, Solana can power smart contracts, decentralized finance applications, and NFTs.
Who created Solana?
Solana was created by Anatoly Yakovenko, co-founder and CEO of Solana Labs. it was designed to facilitate the creation of smart contracts and decentralized applications (dapps).
Solana was introduced into the tech world as a solution to the shortcomings of Bitcoin and Ethereum. Anatoly Yakovenko, observed that most blockchain platforms struggled to scale beyond 15 transactions per second (tps) as payment systems demanded a speed that was hundreds or even thousands of times faster.
Yakovenko partnered with Greg Fitzgerald, a colleague from Qualcomm, and together they launched the Solana blockchain.
Proof of History
Proof of History is a concept that entails establishing that a message occurred before or after a known event, rather than relying on a timestamp. This is analogous to how a photograph of a hostage holding the most recent edition of a newspaper proposes that the hostage was still alive after that edition was published. Solana creates a blockchain-based historical record of events by utilizing Bitcoin’s SHA256 mining algorithm with the addition of a Verifiable Delay Function.
The hash function loops indefinitely, using each previous output as an input, which records the order of transactions. This means that validators on the blockchain can cram as many transactions into each block as possible, while other validators can organize them retrospectively according to the historical record. As a result, transaction throughput is extremely high.
For the majority of blockchains, throughput is measured in terms of basic token transactions. However, for Solana, the 50,000 TPS capacity applies to smart contracts as well. Ethereum and EOS virtual machines have single-threaded runtimes, which means that the blockchain state can only be modified by one contract per time. Also, Solana utilizes Sealevel, a runtime capable of processing tens of thousands of smart contracts concurrently.
Benefits of Solana
- Solana is capable of processing 50,000 transactions per second at an astounding rate of less than $.01 per transaction.
2. Solana’s scalability has been enhanced through the use of Proof of History and several other ground-breaking innovations.
3. With billions of users, Solana has achieved economies of scale while maintaining extremely low application fees.
4. Solana ensures project-to-project compatibility. The user is not required to manage multiple shards or layer-2 systems.
How To Buy Solana
- Create an online Account.
Although majority of top cryptocurrency trading platforms have not yet added support for Solana. With such a promising project, Solana is likely to be added to additional cryptocurrency exchanges in the near future. At the moment, the best way to invest in Solana is through Crypto.com or Voyager.
You’ll need to enter an email address and create a password to create an account. Almost certainly, you’ll be required to provide personal identification information to the website for tax purposes as well. After verifying your identity, you’re ready to begin investing.
2. Buy a wallet (optional).
Before investing in any cryptocurrency, it’s important to consider how your funds will be stored. It is not advised that you store your cryptocurrency on an exchange, as exchanges are popular targets for cryptocurrency hackers. Numerous exchanges have been hacked in the past, and the only reason to keep your cryptocurrency on an exchange is if you’re trading in the short term.
If not that, you should store your cryptocurrency in a crypto wallet, either hardware or software. Software wallets are open-source applications that enable you to securely store cryptocurrency on your computer or mobile device. Hardware wallets are the most secure way to store cryptocurrency, as they physically store your assets.
3. Make your purchase.
You can purchase Solana with USDT or Bitcoin. Tether (USDT) is a stablecoin that is pegged to the dollar, simulating the experience of investing in fiat currency. Certain cryptocurrency investors prefer to trade against Bitcoin, as this provides a gauge of an investment’s performance in terms of Bitcoin.
You can place a market order or a limit order for your buy. Market orders are filled instantly at the current market price, whereas limit orders are filled when the cryptocurrency reaches a specified price. However, if the crypto never falls to that price, your order will be canceled.
Top 5 Market Places To Buy Solana
Maintain – Uphold, a leading exchange in the United States, is a seasoned and extremely innovative trading platform that should be able to meet your trading needs across a variety of cryptocurrencies, including Solana (SOL). Apart from the trading platform’s ease of use and innovative features, what distinguishes the company is its industry credibility.
They provide an extremely intuitive trading experience on both desktop and mobile devices. The trading view is completely customizable with the assets you trade most frequently, and it features an intuitive interface and a modern feel on both desktop and mobile. It is a very popular and suitable choice for new traders in particular.
Apart from being visually appealing, the Uphold trading platform enables you to execute trades with ease. With just a few clicks, you can execute trades directly from your deposit method, without having to wait for funds to clear. This one-step ordering is another innovation from the company, which prides itself on its platform’s usability. Additionally, they have added the capability to execute limit orders.
Binance is one of the world’s largest and best-known cryptocurrency exchanges. The advantages of purchasing Solana (SOL) on this exchange include lower exchange fees and increased liquidity, which enables you to buy and sell quickly in response to market-moving news.
This exchange is ideal for users from Australia, Canada, Singapore, the United Kingdom, and other countries. SOL is not available to residents of the United States of America.
10% cashback on all trading fees when you use Discount Code: EE59L0QP.
FTX is a cryptocurrency derivatives exchange that currently offers trading in over 100 spot markets, including Solana (SOL). They provide intuitive desktop and mobile trading platforms that support a variety of order types, including derivatives, options, volatility products, and leveraged tokens. They offer trading tools that are suitable for both professional traders and everyday users.
Residents of the United States of America and Ontario, Canada are not permitted.
Discount Code: 46313462 entitles you to a 5% cashback on all trading fees.
While Gate.io was founded in 2013, it is not one of the most popular exchanges. Nonetheless, they provide a reputable trading platform with an easy-to-use interface for beginners while maintaining robust and advanced charts for traders of all skill levels, including technical traders. They support a large number of alternative currencies, including Solana (SOL), and are frequently the first exchange to list new tokens. Best of all, they take a strong stance against market manipulation of any kind.
This exchange is currently accepting residents of the United States of America.
KuCoin is a well-known brand in the industry and one of the most competitive fees and trading costs in the sector. From its early days of offering only crypto to crypto trading, the exchange has expanded exponentially and now offers a diverse range of services, including a P2P exchange and purchasing with credit or debit cards.
They currently support trading in Solana (SOL) as well as over 300 other popular tokens. They are frequently the first to offer opportunities to purchase new tokens.
How To Stake Solana
Participating in the Solana network and staking SOL via a supported wallet provides an excellent opportunity for experienced traders to earn interest on the token. However, the simplest way to stake SOL is directly through the exchange on which it was purchased.
Numerous cryptocurrency exchanges are now rewarding users for storing digital assets on their trading platforms. From liquidity mining to interest staking, these passive income opportunities have altered the landscape of the altcoin market.
Offering annual rewards of up to 5% for a variety of proof-of-stake tokens held on the exchange, Coinbase makes passive crypto earning as simple as clicking a few buttons. However, at the moment, the largest US exchange does not offer rewards for staking SOL.
Traders based outside the United States of America can purchase and stake SOL on FTX International. FTX is currently offering a 6% return on SOL staked on the platform. Remember that unstaking SOL via FTX takes seven days, but you can pay a fee to immediately unstake your tokens.
If you’re interested in speculating on Solana or other cryptocurrencies, you can either trade them directly or invest in companies that stand to benefit from the sector’s growing interest.
However, if you’re considering trading Solana, it’s critical to understand the risks, as you could potentially lose your entire investment. Not only is cryptocurrency volatile, but it is rarely backed by physical assets or cash flow. Therefore, if you’re trading cryptocurrency, avoid investing funds that you cannot afford to lose.
How do you invest in Solana?
You can purchase Solana with either USDT or Bitcoin. Tether (USDT) is a stablecoin that is pegged to the dollar, simulating the experience of investing in fiat currency. Certain cryptocurrency investors prefer to trade against Bitcoin, as this provides a gauge of an investment’s performance in terms of Bitcoin.
Is it safe to invest in Solana?
Cryptocurrency investments can be risky and extremely volatile, so if you’re considering buying Solana, be prepared for the price to go down as well as up. It’s advisable to ensure cryptocurrency investments only account for 5 percent to 10 percent of your overall portfolio and to only invest money you can afford to lose.
Does Solana have a max supply?
Solana does not have a cap on the amount of SOL it can produce. Solana’s total inflation rate is currently 7.07 percent, according to SolanaBeach.