The world’s Fastest Blockchain
It seems that by now most people who have been exposed or are interested in cryptocurrencies have a general understanding of Bitcoins fundamentals and what it is. 21 million coins, decentralized, digital currency on the blockchain. Simple enough to understand. It also has the brand recognition going for it. Yes, even your grandma has probably at least heard of Bitcoin. Ethereum however, though getting to be more well known becomes slightly more convoluted and more research required to fully grasp the workings behind it. A simple explanation would be a general purpose blockchain based programming language that enables distributed applications and smart contracts with its token Ether (ETH). Where bitcoin uses proof of work to Proof of work for validating transactions and mining new tokens and securing the network. Ethereum uses proof of stake. Both of these are decentralized protocols that have different mechanics running them with different utility purposes. Solana which we will soon get into, incorporates an innovative Proof-of-History (PoH) timing mechanism that is implemented prior to, and facilitates, its Proof-of-Stake protocol structure.
Solana is a decentralized computing platform created in 2017 by Anatoly Yakovenko. Released whitepaper titled: “Solana: A new architecture for a high performance blockchain v0.8.13". The network uses native cryptocurrency SOL to pay for all transactions. Solana solves and improves blockchain scalability issues, by using a combination of proof of stake consensus and new proof of history. Solana is able to support 50,000 transactions per second without sacrificing decentralization. With a capped total supply of 489 million SOL tokens that will ever be released into circulation. And 300.69 million SOL tokens in current circulating supply, as of writing this.
The computers that secure the network are called validators. Participants stake their own SOL to become a validator, in exchange for a chance at earning new SOL released in circulation (distributed to new validators joining Mainnet Beta) and also a cut of transaction fees. Validators spend about 1 SOL per day in vote transaction fees, which are burnt and removed from supply. By design as a deflationary mechanism to reduce the total supply and thereby maintain a healthy SOL price. Since genesis, approximately ~40,000 SOL have been burnt and removed from circulating and total supply due to vote transaction fees. Staking is also provided on the network, where anyone who owns SOL can stake them with holding periods to help secure network and get paid interest as high as 12% in some cases. SOL also serve as a governance token, meaning that holders also are able to vote on future upgrades and governance proposals that are submitted by the Solana community. Providing the fastest transactions at lowest fees. Solana is so fast, congestion like seen with Ethereum is avoided keep fees low. This allows for developers to build and innovate faster than ever. There's already over 400 projects spanning DeFi, NFTs, Web3 and more.
Blockchains typically have one major downside compared to centralized networks: they’re slow! Without adding a layer 2, Bitcoin takes time to fully secure and process. But being decentralized is key, and Solana knows this. The network is censorship resistant. Meaning, the network will remain open for applications to run freely and transactions will never be stopped, doing so without sacrificing speed or having to use central control. This is huge!
The Solana community is a globally distributed home for developers, token holders, validators, and members supporting the protocol.
Proof of History is a sequence of computation that can provide a way to cryptographically verify passage of time between two events. A good metaphor is to think of the way that Reddit AMA participants often take a photo with today’s issue of the newspaper in effort to time stamp and verify the date it occurred. As the technology’s creator puts it, proof of history creates “a historical record that proves that an event has occurred at a specific moment in time.”
Like Ethereum, Solana network can interact with smart contracts. Smart contracts power a wide range of applications and many are starting to boom. From NFT markets, allowing for creators to onboard relatively cheaper than other patforms. DeFi, games, decentralized lotteries, and many other ideas and concepts being invented everyday. Some popular applications used today:
Phantom wallet, Radium, Ocra DEX, Sabor HQ, Maps.me, Metaplex, Audius, Mango Markets, Sunny Agrigators, Anchor, Serum DEX, FTX, Magic Eden, Star Atlas, Digitaleyes, to name a few.
Solana’s efficiency is due to the following eight core traits and protocols that help power the network. Innovating the blockchain capabilities:
Proof of History — More efficient and high transaction throughput rate. Validators process smaller amount if info this way.
Tower BFT — helps avoid massive messaging overhead and transaction latency. Taking advantage of PoH sychronized clock feature.
Turbine — Boosts bandwith usage and faster transaction settlements. Ease of use to transmit on-chain data to nodes, by breaking into smaller pieces.
Gulf Stream — Allows validators to execute transactions ahead of time, reducing confirmation times and memory requirements needed. This is what alows for the 50k/sec transactions.
Sealevel — Allows for transactions to be processed concurrently on a single blockchain. Increasing efficiency dramatically.
Pipeline — mechanism that allows information on chain to be validated and replicated across all nodes in network quickly.
Cloudbreak — Enables concurrent reading and writing of data on network.
Archivers — Enhances the data storage by offloading from validators to network. Allows for lightweight nodes to be used rather than more advance hardware.
Solana’s average transaction fee is .00025 SOL. 20 Billion+ transactions have already been processed on chain. It’s network allows for developers to code in native language Rust or many other common development languages like C and C+. Over 400+ projects live on the network. With the recent rise in NFT’s on Solana’s blockchain (first one being minted in August 2021), millions of new adopters are expected to be onboarded in the coming years. Companies like Coinbase have announced they will soon allow for NFT capabilities.
Nothing is without some risk. In order to succeed participation and staking from many users will need to happen. This will help fortify the network. What about the whale accounts (wallets hold large sums of SOL) and Solana team owning too much, is that a risk? Solana Foundation is a not for profit aimed to help build and promote the ecosystem. The following represent ALL of the unlocked tokens not in the direct control of Solana Labs or the Solana Foundation:
◎8,261,584 have been distributed through the CoinList auction and the Binance airdrops
◎11,365,067 are on loan (from the Foundation) to a market making firm for liquidity provisioning.
Besides the above, the Foundation has not released or sold any additional tokens into the market. The above tokens are NOT from the Solana team, or from Solana investors. The team’s and investors’ tokens are all 100% locked up.
As Solana gains in popularity, expect big and exciting things to come. Once you give it a try, the simple ease of use aspect will have you sold. We like things that are fun and easy. Solana has mastered this. Solana separates it’s self by being fast, secure, and censor-ship resistant. Providing the open infrastructure required for global adoption. And believe me, it’s coming. As cross-chain capabilities become commonplace (wormhole) Solana can be used as execution layer and Ethereum used as settlement layer. While Bitcoin can remain store of value.
In order to fully tilt to a decentralized world, these networks must all continue to grow the crypto ecosystem as a whole. Each with their own unique set of skills and utilities. Truly a paradigm shifting technology causing a revolution. Bringing together communities and innovation at a pace never seen before. We are building a multi-chain future indeed.
Basically, the speed of light is how fast we can make this network go.” — Anatony Yakovenko
For a deeper dive, check out the whitepaper: https://solana.com/solana-whitepaper.pdf
Monthly transparency report: https://solana.com/transparency
View the network data live: https://solanabeach.io/