Blockchain is a method of storing data so that it becomes impossible to edit or corrupt the data. One major issue with other blockchains is that they must agree on the time. Humans consider this for granted, but computers must continually check time to proceed with their functions. On all the blockchains, the network's node, which is a technical term for computers, must communicate back and forth until they settle on a time. They must do this before submitting a block; this discussion may consume a significant amount of time. Solana solves this problem by allowing everyone to timestamp their blocks. It utilizes cryptographic verification so that users don't have to wait for others to agree on the time. Since it agrees on the structure of the facts in the blocks after the event, customers do not have to wait for other validators to approve their work.
The consensus method is a technical way of explaining how everyone accepts the design of the blockchain. It does not require proof of work or proof of stake. Anatoly Yakovenko presented a new approach called "Proof of History" in his white paper. It is similar to the proof of stake but adds the variable of time. Therefore, users must be aware that proof of history is not a consensus technique but rather a method of incorporating time into blockchain data. It employs timestamps to assign a particular date and time to the blocks. It enables highly quick validator processing to submit blocks in the correct order without wasting time.
Proof of History is a series of data points that cryptographically justify the lapse of time between two scenarios. It employs a cryptographically reliable method. This means that it is designed in such a way that the output cannot be predicted from the input. If you want to understand more about the technology underlying Solana and its potential role as a financial system in the future, then continue reading this article.
What is Solana?
Anatoly Yakovenko is an intelligent man who spent a decade working at Qualcomm. In 2017 he created a blockchain called Solana. It attempts to boost bandwidth beyond what popular blockchains generally manage while keeping costs low. This network employs a novel hybrid consensus model. It combines a new proof-of-history method with a lightning-fast connectivity engine, which is a kind of proof-of-stake. As a result, the network can feasibly perform over 710,000 transactions per second without the requirement for scaling solutions.
What is Sea-Level in Solana?
Let's imagine a human has three chores to complete: do the dishes, switch the laundry, and sweep the floor. Because there is only one human, he would have to perform each of these tasks in order. It is called a "serial task" because it must be completed one after the other. It would be wonderful if humans could duplicate themselves. In this way, they can do the dishes, swap laundry, and sweep the floor simultaneously. However, it is not technically possible. On the other hand, in the case of Solana, it performs smart contract code in parallel. It means this network can handle tens of thousands of transactions at the same time.
What makes Solana Unique?
In general, blockchains have more scalability in terms of the number of transactions per second. Time differences and increased capacity makes decentralized blockchains slow. It is because, more nodes confirming activities and timestamps take a bit longer.
The Solana network addresses this issue by selecting a single leader node. This node is based on the proof of stake mechanism that organizes node communications. The network benefits from the reduced burden. Hence, it gives faster performance even in the absence of a centralized and accurate time source. It builds a transaction chain by mining the result of one transaction and using it as the input for the next. The major consensus mechanism used by the SOL network is Proof of History. It is an idea that enables better scalability of the system and increases accessibility.
Solana vs Ethereum
Solana's smart contracts are considerably different from Ethereum's. Ethereum adopts a virtual machine-type technology to run its solidity code, while Solana uses the rust programming language. Rust is a very low-level language, which means it is far more powerful but requires more effort to develop things. One disadvantage is that developers cannot just copy and paste their programs and projects; everything must be created from the beginning. However, they will have more significant processing power than Ethereum smart contracts. Therefor, Solana is also known as Ethereum killer.
Solana NTF Marketplace
The NFT marketplace of Solana has grown over the time. Besides that, it will evolve further and become something larger than Ethereum. Solana is popular, where users can develop, trade, and acquire Solana-based NFTs. It charges a 3% transaction fee for each successful NFT sale. On the other hand, the creator gets complete control over their fee. As a result, in less than a year, NFT sales on Solana have skyrocketed. These have provided life-changing opportunities for artists ready to adopt a transformation in how art is kept and presented.
Price of Solana
The Solana network is speedy, massive, and reasonably priced. Solana has a block time of 400 milliseconds. It is super quick when compared to Ethereum's transaction duration of 10 seconds or Bitcoin's 10 minutes. Additionally, this network can process up to 710,000 transactions per second. It is around 30 times the number that Visa now performs. It is equivalent to the Matic network in terms of transaction costs, which are roughly a hundredth of a penny.
The Solana network's token is the SOL coin. It is required for transaction fees and is present across the blockchain ecosystem. It has both an inflationary and a deflationary tendency. This is deflationary because, for a long time, all transaction fees were burned. And now only about half of them are available. It's also inflationary since they recently confirmed an inflation schedule that pays out around 8% in staking rewards. However, they are reduced by a very small amount every few days. The reduction is continued until the total staking rewards reach 1.5 in 10 years. In terms of overall supply, they started with roughly 500 million tokens.
Future of Solana
In December 2020, the Solana network went offline for almost six hours. This is disturbing since a decentralized protocol should never collapse. This indicates everyone participating in the network faced the same bug. This problem did absolutely nothing to the price, and nobody panicked or sold. Ultimately, as a result of this announcement, Solana is now in the beta stage.
For now, it is gradually regaining its place following its decline in January 2022. Even if Solana's present market share remains the same, the NFT, DeFi markets and the coin's development resources will keep growing. As a result, it will create a rising demand for Solana tags. There's a possibility it may turn out to be a smart investment as long as it doesn't collapse. However, if it does fall, investors may be able to profit by short-selling the SOL currency.
If an investor is searching for a high-risk and high-reward commodity for his investment portfolio, Solana could be his cryptocurrency. The SOL tokens are acknowledged and applauded by the cryptocurrency market for their technological excellence and speed. It gives the token a strong chance of remaining upright and expanding in the long term.