Home » Altcoin » What is Solana Cryptocurrency? || DOT || How Does It Work? || 2022
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What is Solana Cryptocurrency? || DOT || How Does It Work? || 2022

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The Solana (SOL) platform was founded by Anatoly Yakovenko in 2017. Yakovenko worked at Qualcomm company before starting Solana. He has great experience in compression algorithms due to his previous experience with Dropbox as a software engineer. Together with Eric Williams and Solana. CTO Greg Fitzgerald has developed a new process to deal with the traditional performance issues that existed in the Bitcoin and Ethereum blockchains.

Overview

NameSolana
Market cap$46B (September 2021)
Release DateMarch 2020
Developer Anatoly Yakovenko
Symbol
CodeSOL
Written LanguageRust
Transaction SpeedApprox.- 50,000 transactions per second
BlockchainProof-of-History (POH)
Official WebsiteClick Here

What is Solana (SOL)?

Solana is one of the most popular cryptocurrencies among the currently more than 6,500 cryptocurrencies, the cryptocurrency platform is called Solana, while the individual unit is called SOL.

Solana was developed by Anatoly Yakovenko and works on a decentralized computer network with a ledger called a blockchain. This blockchain database manages and tracks the currency and effectively records every transaction that has taken place in it, like a long-lasting receipt. Transactions in the currency and verify the integrity of the data.

This decentralized setup makes the network more robust and allows users to conduct transactions without the need for an intermediary. Solana become the fastest blockchain in the world and with the ability to verify 65,000 transactions per second at a cost of less than a cent. each.

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While many people view cryptocurrencies as just currency, it is helpful to think of cryptocurrencies as a token that can power or activate other applications on the platform. For example, Solana can run smart contracts, decentralized financial applications, NFT, and more.

How Solana different from others?

As one of the most powerful permissionless blockchains in the world, the network has 200 physically distinct nodes that support a throughput of more than 50,000 TPS when running on GPUs. One of the biggest challenges with distributed systems is getting an agreement on time.

Unlike Bitcoin, which uses the PoW algorithm as a decentralized clock for the system, Solana uses a Proof of History method. Proof of History allows you to create historical records that prove that an event occurred at a specific point in time. The algorithm is a high-frequency verifiable delay function. This function requires a certain number of consecutive steps for evaluation.

Evaluated transactions or events receive a unique hash and count value that can be publicly and effectively verified. The count enables us to know when each transaction or event occurred and acts as a cryptographic timestamp. Inside each node, there is also a cryptographic clock that records the network time and the order of events, which enables high performance and greater efficiency within the Solana network.

How does Solana work?

Entering Transactions into the Leader. The leader rearranges the messages and efficiently orders them so that they can be processed by other nodes.
The Leader then executes the transactions in the current state stored in RAM. The leader then publishes the transactions and Signs the final state to the verifier (replication node). Verifiers perform the same transactions on their copies of the state and publish their state signatures when they receive an acknowledgment. Posted acknowledgments serve as votes for the consensus algorithm.

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What is Solana Token (SOL)?

The SOL token is the native currency in the Solana ecosystem, so the token can be passed to nodes within the Solana cluster to run programs in the chain or to validate its issuance. Another use of SOL is to make micropayments known as lamports. SOL is 26 million. The maximum supply of SOL is limited to 489 million SOL.SOL also has additional use cases, you can use the token for additional rewards. Hence, Staking is a great way for users to make a profit if they just want to keep their tokens.

Is Solana a good investment?

Solana has grown rapidly in its relatively short-term stock market trades, so even those who bought recently have likely made a significant amount of money. But instead of looking at recent wins and being afraid of missing out, it’s important to understand what. From this perspective, traders are buying something that is not covered by assets or cash flow.

This is a key difference between cryptocurrency and stocks. A stock is a fraction of the ownership of a company, and its success over time depends on the growth of the underlying company. If the income increases, the investment should develop well. Shareholders have legal rights to the company’s assets and cash flows, and the company can even pay dividends to investors.

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In contrast, like most popular cryptocurrencies, Solana is not backed by fundamental assets, what drives it is the optimism and speculation of other traders who think they can sell the cryptocurrency to other traders later at a higher price, or what is called the “dumbest investment theory”. So speculation is the driving force behind the rise in digital currency prices.

When optimistic traders fizzle out, the cryptocurrency has nothing to support it. This is an important distinction that keeps many investors, including the legendary Warren Buffett, away from cryptocurrencies.

FAQs

Is Solana a coin or token?

The SOL token is the native currency in the Solana ecosystem, so the token can be passed to nodes within the Solana cluster to run programs in the chain or to validate its issuance. Another use of SOL is to make micropayments known as lamports.

What is special about Solana?

Solana is currently one of the fastest programmable blockchains in the world. It can process more than 50,000 transactions per second (TPS). The developers of SOL say the transaction speed can reach 700,000 TPS as the network grows. This is significantly better than Ethereum, which currently processes between 15 and 45 TPS.

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