In recent times, the price of the Solana cryptocurrency has made crypto asset investors direct their focus. In fact, crypto activists who don’t really understand what Solana is are also starting to show interest.
So, what exactly is Solana, how does it work, and is it unique? Check out the description in the following article.
What is Solana
Not a few ordinary people who still don’t know Solana, especially those who are not involved in the crypto sector. However, with the progress of the times and technological developments in the business sector, it is not impossible that Solana will attract the interest of the common people to enter the digital asset trading sector such as crypto.
Solana is present as a blockchain on a web scale that functions to provide transaction services that are faster, secure, scalable, and connected. Solana uses a unique technique or method to sequence transactions. In addition, users can pay transaction fees and interact with smart contracts.
Solana uses a hybrid consensus model which it claims is so innovative that it is attracting interest from small traders and institutional alike. Solana, which focuses on making a decentralized financial platform accessible on a larger scale than before, certainly offers many advantages.
A Brief History of Solana
Solana was officially launched by the Solana Foundation, which has an office in Geneva, Switzerland, in March 2020. However, the Solana project actually started in 2017. Solana itself is an open project that can be used without having to ask permission to provide decentralized finance (DeFi) solutions.
Anatoly Yakovenko is the most important figure behind the emergence of Solana. He started his professional career at Qualcomm. Anatoly’s hard work led him to the position of Senior Staff Engineer Manager in 2015. His experience has now led to Anatoly’s new position as a Software Engineer at Dropbox.
In 2017, Anatoly worked on the project that became what Solana was all about. He was assisted by a colleague at Qualcomm, Greg Fitzgerald. At that time, Anatoly and Greg founded a project called Solana Labs to develop the project. He even attracted some of his former colleagues at Qualcomm.
Scalability is one of the biggest challenges related to blockchain technology because the times often present limitations related to transactions and confirmation times. Solana emerged as a solution to the problem of limitations without compromising on security.
The creation of Solana was accomplished by adapting a new method to support transaction verification. While Bitcoin, Ether, and other projects often suffer from stability and speed problems. The Solana blockchain is capable of handling transactions per second using a method known as Proof-of-History (PoH).
The protocol designed by Solana as a facility for building decentralized applications (DApps) has the goal of increasing scalability. They extend the PoH consensus and combine it with the Proof-of-Stake (PoS) consensus that is the basis of the blockchain that Solana uses.
How Solana Works
Solana belongs to the third generation PoS blockchain that has implemented a unique way to create a trustless system for timing transactions. PoS systems track the sequence of transactions or what is also known as ‘historical evidence’ as this is very important in the world of cryptocurrencies.
In Bitcoin, the system allows merging transactions into blocks with a single timestamp. Existing nodes must validate blocks according to other nodes. This process can significantly increase node wait times in order to ensure blocks across the network.
Meanwhile, Solana is taking a different approach. All Solana transactions are hashed using the SHA256 hash function by taking input to produce a unique, hard-to-predict output. The output is used as input for the next hash. The current transaction sequence is included in the hashed output.
Solana’s hashing process creates a long, unbroken chain of transactions, features are self-explanatory, and can be added to blocks by validators. Hashing also takes a certain amount of time for completion. As a result, the validator finds it helpful in verifying even though time has passed.
The PoH system or method is also different from the process used by Bitcoin because it is part of the Proof-of-Work (PoW) mechanism. In Bitcoin, the blocks within a large group of transactions are not sequential because miners add the time and date to incoming blocks of mining based on the local clock.
In fact, the time can be different from other nodes or wrong. As a result, nodes have to find out if the timestamp is valid. Meanwhile, transactions via the hash chain allow validators to process and send less information in each block. To reduce verification time for new blocks, you need to use the latest hash version.
In general, many still fail to understand that ‘historical proof’ is not really a convention mechanism, but a way to optimize time to confirm transaction sequences. When combined with proof of ownership, the decision to choose a validator to make blocks easier is the right choice.
Solana’s uniqueness
Solana has an interesting innovation. This innovation is based on the PoH consensus, which is a system development from the initiator, Anatoly Yakovenko. This concept allows for greater protocol scalability so that it can have an impact on increasing usability benefits.
In the crypto space, What is Solana is notorious for having short processing times. The reason is, Solana uses the Hybrid protocol. This protocol makes validation time significantly reduced in transactions and execution of Solana smart contracts. There has also been institutional interest in Solana because of its extremely fast processing times.
In February 2021, the Solana project created by Anatoly Yakovenko and Greg Fitzgerald was ranked 42 on the CoinMarketCap website. Of course, this achievement cannot be separated from Solana’s advantages in fast and sequential transaction processes and the various features in it.
When learning about What is Solana, you should also understand the main features of Solana after going through development. The main features owned by Solana include:
1. Gulf Stream
Is a transaction forwarding protocol with less pooling.
2. Sealevel
This is the time to execute smart contracts in parallel.
3. Pipelining
Transaction processing unit used to optimize validation.
4. Cloudbreak
Cloudbreak is a horizontally scalable account database.
5. Pengarsip
It is a distributed storage ledger.
With its features, Solana is able to produce a high network with a block transaction operating speed of up to 400 ms per second. Meanwhile, Bitcoin transaction time is 10 minutes and Ethereum is 15 seconds. It took Solana’s developers about eight years to develop the technical features as blockchain helpers.
SOL miners can stake their tokens as part of the blockchain PoS convention mechanism. Supported by compatible crypto wallets, miners can stake their tokens on validators who process network transactions. Successful validators will distribute rewards to users who stake tokens.
On the other hand, Solana’s reward mechanism encourages validators and delegates to act in the best interests of the network. As of May 2021, Solana has more than 900 validators. This is one of the factors that makes the Solana network so well decentralized.
When learning about Solana, you also have to understand about the SOL token. SOL is Solana’s native cryptocurrency that functions as a utility token. Solana miners require SOL as a transaction fee when transferring or interacting with smart contracts. SOL owners can also be network validators.
Solana also allows developers to create smart contracts and projects based on the blockchain, just like Ethereum. SOL uses the SPL protocol which is the Solana standard blockchain token which is considered similar to Ethereum’s ERC20.
Even though they are considered similar, the SOL token has two uses. The SOL token functions as a transaction fee and token staking part of the PoS convention.
This is the discussion about what Solana is, the uniqueness of the network, and how it works. Hopefully this information can be useful for you.
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