Solana — An Overview of the Trending Cryptocurrency
As Ethereum completed its switch to Proof-of-Stake, Solana saw a 2% drop in value. Besides the Ethereum merge, Solana faces a threat from other layer-1 protocols and price volatility. Does the SOL token’s future look good, or is the price expected to plunge more? Below, we will dive deep into the specifics of this crypto.
As per cryptoblog, Solana was developed as a blockchain platform that could accommodate distributed, scalable software. With 3,549 transactions per second, Solana is hailed as the world’s fastest cryptocurrency. By achieving this status, it has removed a major obstacle to the mainstream acceptance of cryptocurrencies.
Solana has substantially lower transaction fees than competing blockchains like Ethereum. However, one issue with Solana is that it may be less secure than competing solutions because it prioritizes scalability. This is because, in comparison to more established networks like Ethereum, its blockchain architecture and security are astatic. This may be the main reason behind its extreme price volatility.
An Overview of Solana’s History
Anatoly Yakovenko is the creative force behind Solana. In a white paper released in November 2017, Yakovenko outlined a proof-of-history timekeeping approach for decentralized networks. When discussing the scalability of blockchains, he suggested that the time it took for nodes to achieve a consensus on the sequence of transactions was a major hindrance. To automate the overall transaction sorting process for blockchains, “proof of history” allows you to construct historical recordings that prove that an event happened at a given instant in time.
Yakovenko and Greg Fitzgerald, former Qualcomm employees, produced a prototype of the first open-source implementation of Anatoly’s white paper in February 2018.
How Does Solana Work?
Instead of relying on a timestamp, the Proof of History notion includes establishing that a message occurred before or after a known event. Solana creates its blockchain history using Bitcoin’s SHA256 mining process and a Verifiable Delay Function.
The hash function is a never-ending loop. As a result, validators on the blockchain can cram as many transactions as possible into each block, and then other validators can sort them out according to the historical record. One of the main benefits of SOL is its scalability, which allows for very high transaction throughput. Traders that make frequent trades will appreciate its high throughput.
How Many Solana (SOL) Coins Are Currently in Circulation?
A total of 354,913,290 SOLs are currently in circulation. There is no hard limit on the total number of SOL tokens that will ever be created. Solana will gradually decrease its rate of inflation by 15% annually until 2031.
Solana’s potential for speed and scalability is enormous. However, as with any investment, you should do your own due diligence before putting your money into Solana. Before performing any trade, it is a good idea to take a look at the most recent market trends, news, technical and fundamental analysis, and expert opinions. Don’t trade with money you can’t afford to lose, and remember that past results are no guarantee of future profits.