WHAT IS SOLANA?
Can This Be The Blockchain For Mass Adoption?
So, what is Solana?
Solana is a layer-1 open source blockchain project which relies on having a high-speed transaction output and being permissionless. The project is currently run by the Solana Foundation based in Geneva, although the blockchain itself was built by Solana Labs which is based in San Francisco. One of the most attractive things about Solana is that it is a lot quicker in terms of the number of transactions it can process and has minimal fee prices in comparison to other blockchains like Ethereum, as of today, the average cost per transaction is $0.00025.
Solana has gained enormous attention from the public in the last couple of years thanks to its ever growing DeFi space and most notoriously, its NFT marketplace. Solana Pay, a free-to-use payments protocol is also trying to innovate and bridge the gap between traditional and crypto payments by allowing merchants to accept payments directly from customers through the Solana network, such payments are made in stablecoins such as USDC.
Solana’s market capitalization at the time of writing is at 12.9 billion USD and it’s ranked on the 9th place according to Coin Market Cap, its current price is $37.3 USD with a 24H volume of 1.3 billion USD. The native token of Solana is SOL, the current circulating supply of SOL is 343.8 million which is 65.6% of its max supply of 524.5M according to Solanabeach.io. More than 83 billion transactions have been executed as of today on its network only after 2 years since the first Solana block was created on March 16, 2020.
History of Solana
“In November of 2017, Anatoly Yakovenko published a whitepaper describing Proof of History, a technique for keeping time between computers that do not trust one another. From Anatoly’s previous experience designing distributed systems at Qualcomm, Mesosphere and Dropbox, he knew that a reliable clock makes network synchronization very simple. When synchronization is simple the resulting network can be blazing fast, bound only by network bandwidth.
Anatoly watched as blockchain systems without clocks, such as Bitcoin and Ethereum, struggled to scale beyond 15 transactions per second worldwide when centralized payment systems such as Visa required peaks of 65,000 tps. Without a clock, it was clear they’d never graduate to being the global payment system or global supercomputer most had dreamed them to be. When Anatoly solved the problem of getting computers that don’t trust each other to agree on time, he knew he had the key to bring 40 years of distributed systems research to the world of blockchain. The resulting cluster wouldn’t be just 10 times faster, or a 100 times, or a 1,000 times, but 10,000 times faster, right out of the gate!
Anatoly originally called the project Loom, around the same time, Ethereum-based project Loom Network sprung up and many people were confused about whether they were the same project. The Loom team decided it would rebrand. They chose the name Solana, a nod to a small beach town North of San Diego called Solana Beach, where Anatoly, Greg and Stephen lived and surfed for three years when they worked for Qualcomm.
In June of 2018, the team scaled up the technology to run on cloud-based networks and on July 19th, published a 50-node, permissioned, public testnet consistently supporting bursts of 250,000 transactions per second.”
- Quoted from: https://docs.solana.com/history
How does it work and will it exist in the next 10 years?
The fundamental component of the Solana protocol is Proof-of-History, a sequence of computations that offers a digital record which confirms that an event has took place on the network at any point in time. It can be presented as a cryptographic clock that sets a timestamp to each transaction on the blockchain, in conjunction with a statistics shape that may be a easy addition of it. PoH is based on PoS using the Tower Byzantine fault tolerance (BFT) algorithm, Solana makes use of it to reach consensus. The Tower BFT maintains the network secure and running and acts as an additional tool to validate transactions. Solana’s built-in mechanism for synchronizing time throughout all of its nodes enables the network to reach a theoretical peak capacity of 65,000 transactions per second and it uses a 256-bit secure hash algorithm (SHA-256).
Solana is getting more decentralized by the day, currently the number of validators on its mainnet beta is of 1821, yes you read that right Solana is still officially in its “beta” version. Although there are 1821 different validators on its network, Solana has now a “superminority” of 27 nodes, the superminority is the number of validators that control 33% or more of the total active SOL staked, meaning that you would only need to control these 27 validators in order to take over the network or If they all shut down simultaneously the chain would fully stop, but the chances for it to happen are very unlikely given the fact that these validators are independent and there is no monetary incentive for them to do so. And here is where you can help Solana get more decentralized, you should always try to avoid staking your SOL on any of those 27 validators and search for nodes with low SOL concentration. You can find which validators are the ones with superminority and also the ones with low levels of staked SOL on Solanabeach.io. Currently there is around 394 million SOL staked, it is important to mention that locked tokens can be staked, too. Hence the amount of active stake exceeds the circulating supply.
I certainly don’t know if Solana is here to stay, but its future sure looks quite promising if the team is able to deliver on their promises. And to be honest, they have come very far in only two years since the blockchain went live, NFA!
