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Solana (SOL) definition

NEWS ALERT December 16, 2021 at 2:41 pm EST: Former first lady Melania Trump is dipping her toes into the blockchain with her own non-fungible token (NFT) platform using the Solana blockchain protocol. Trump’s first NFT entitled “Melania’s Vision” can be purchased for an SOL between December 16 and December 31.

What is Solana?

Solana is a blockchain platform designed to host decentralized, scalable applications. Founded in 2017, Solana is an open source project currently operated by the Solana Foundation based in Geneva, while the blockchain was developed by San Francisco-based Solana Labs. Solana is much faster in terms of the number of transactions it can process and has significantly lower transaction fees compared to competing blockchains like Ethereum.

The cryptocurrency that runs on the Solana blockchain – also called Solana (SOLUSD) and with the ticker symbol SOL – has risen by almost 12,000% so far in 2021. and with a market capitalization of over $ 66 billion, it is the fifth largest cryptocurrency by that metric.

The central theses

  • Solana is a blockchain platform designed to host decentralized, scalable applications.
  • Solana can process a lot more transactions per second and has much lower transaction fees than competing blockchains like Ethereum.
  • Solana’s native cryptocurrency, ticker SOL, has a market capitalization of over $ 66 billion. This makes it the fifth largest cryptocurrency.
  • Solana is a Proof of Stake (PoS) blockchain and also uses a new technology called Proof of History (PoH).

Understand Solana

Evidence of the concept of history

Solana co-founder Anatoly Yakovenko published a white paper in November 2017 describing the concept of the Proof of History (PoH). PoH is evidence of checking the order and timing between events and is used to encode the trusted timing on a ledger.

In the whitepaper, Yakovenko notes that blockchains, which were publicly available at the time, did not depend on time, as each node in the network relied on its own local clock without knowing the clocks of other participants in the network. The lack of a trusted time source (that is, a standardized clock) meant that if a message timestamp was used to either accept or decline a message, there was no guarantee that everyone else on the network would make exactly the same choice. PoH overcomes this hurdle as every node in the network can rely on the time recorded in the ledger, on the trustworthy basis that is key to the functioning of the blockchain.

Story of Solana

Yakovenko’s previous work experience was in the field of distributed systems design at leading technology companies such as Qualcomm Incorporated (QCOM). That experience had made him realize that having a reliable clock makes network synchronization easier, and if that happened the resulting network would be exponentially faster, the only limitation being its bandwidth. Yakovenko hypothesized that using Proof of History would tremendously speed up the blockchain compared to blockchain systems without clocks like Bitcoin and Ethereum, which struggled to scale above 15 transactions per second (tps) worldwide, a fraction of the throughput that from centralized payment systems such as Visa Inc. (V), which required peaks of 65,000 tps.

Yakovenko’s initial implementation began in a private code base and was implemented in the C programming language. Yakovenko then migrated the entire code base to the Rust programming language at the behest of his former Qualcomm colleague Greg Fitzgerald. In February 2018, Fitzgerald began prototyping the first open source implementation of Yakovenko’s whitepaper, and then released the project’s first publication, which showed that 10,000 signed transactions could be verified and processed in just over half a second. Shortly thereafter, Stephen Akridge – another Qualcomm colleague of Yakovenko – demonstrated that outsourcing signature verification to graphics processors could massively improve throughput.

With these project milestones in his luggage, Yakovenko recruited Fitzgerald, Akridge, and three others to help found a company called Loom. However, due to the likelihood of confusion with an Ethereum-based project of a similar name, the company / project was renamed Solana, after the small beach town near San Diego where the co-founders lived when they worked for Qualcomm.

In June 2018, the project was scaled to run on cloud-based networks, and a month later the company released an approved public test network of 50 nodes that consistently supports bursts of 250,000 transactions per second. By December 2021, Solana had processed over 40 billion transactions at an average cost of $ 0.00025 per transaction.

Solana’s technology

The goal of Solana’s architecture is to demonstrate that there are a number of software algorithms that, when used in combination to implement a blockchain, eliminate software as a performance bottleneck and allow transaction throughput to be scaled proportionally to network bandwidth. Solana’s architecture fulfills all three desirable attributes for a blockchain: scalable, secure and decentralized. Solana’s architecture describes a theoretical upper limit of 710,000 transactions per second (tps) in a standard gigabit network and 28.4 million tps in a 40 gigabit network.

Solana’s blockchain works according to both a Proof of History (PoH) and a Proof of Stake (PoS) model. PoS allows validators (who validate transactions added to the blockchain ledger) to review transactions based on how many coins or tokens they hold; PoH enables these transactions to be timestamped and verified very quickly.

Solana versus Ethereum

Solana’s fast-growing ecosystem and its versatility have inevitably drawn comparisons to Ethereum, the leading blockchain for decentralized applications (dApps). Both Solana and Ethereum have smart contract features that are critical to running cutting edge applications like decentralized finance (DeFi) and non-fungible tokens (NFTs). But there are some fundamental differences between the two.

In contrast to Solana, Ethereum is a Proof of Work (PoW) blockchain in which miners have to compete to solve complex puzzles in order to validate transactions, which makes this technology more energy-intensive and therefore more environmentally harmful.

Much of the excitement surrounding Solana in 2021 was due to its distinct advantage over Ethereum in terms of transaction processing speed and transaction costs. Solana can process up to 50,000 transactions per second (tps) and the average cost per transaction is $ 0.00025. In contrast, Ethereum can only process less than 15 transactions per second, while transaction fees hit a record $ 70 in 2021.

However, Ethereum has a first mover advantage, and with its massive ecosystem, it ranks second after Bitcoin in terms of market capitalization. Ethereum’s Eth2 upgrade and move to a PoS model are both planned for 2022; The upgrade is intended to make the blockchain more scalable, more secure and more sustainable, while at the same time drastically increasing the speed of transaction processing.

Solana’s status as a newer blockchain company was also scrutinized when it suffered a network outage for more than 17 hours on September 17, 2021 after the transaction volume increased – which peaked at 400,000 transactions per second – and the Bot activity caused excessive memory consumption. While his Sol token initially crashed into the news, Since then, it has made up for those losses, hitting a record price of over $ 250 in November 2021.

Is Solana’s SOL token available in fractions?

Yes, SOLs are available in fractions called lamport; a Lamport has a value of 0.000000001 SOL. Lamports are named after Solana’s greatest technical influence, Leslie Lamport, a computer scientist best known for his work in distributed systems.

How many SOL-Coins are currently in circulation?

The Solana Foundation has announced that it will put a total of 489 million SOL tokens into circulation, of which 260 million have already been launched.

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