Solana Explained it’s a blockchain that is open source and it can execute as many as 500 to 710,000 transactions per second. Solana is able to achieve this speed by implementing what is known as proof of history. We will briefly explain Solana and why this is different from other networks out there.
At the time of writing, Solana is sitting at ninth position on the coin market cap with a market capitalization of 15 billion dollars. This goes to tell you that lots of people are buying into Solana. There are over 20,000 different cryptocurrencies currently in the world today and more and more are being created. Some of these coins die just a few hours after their launch and some longer.
One thing is clear in the crypto space if there’s no real use case of the project or improvement that tends to solve a problem for the masses then the coin won’t last.
What is Solana? Solana Explained
Solana explained, that Solana is a blockchain that is open source with the primary aim of resolving the issue of scalability and it does this through speed, scalability in crypto just simply means the ability of a network to grow in size by being able to execute more transactions at any second without actually putting any of its other features at risk. So Solana has been able to achieve this speed it can execute as many as 500 to 710,000 transactions per second. This is very massive to give you a comparison so you get the picture I’m going to use bitcoin and Ethereum.
Ethereum can run about 20 transactions in a second while bitcoin does above 4 transactions per second. Now you see the massive difference between Solana and Ethereum. This is why the price of gas fees is by far smaller than with bitcoin in Ethereum. Solana is able to achieve this speed by implementing what is known as proof of history.
Proof Of History
Solana explained, that Solana was founded by Anatoly Yakovenko around mid-2017. After publishing the white paper describing a new way he found himself with transaction speed using proof of history. He stated that from his own findings the biggest problems bitcoin and Ethereum faced in scaling their network was that the number of transactions done per second was very low, and they needed to fix that first. With the concept of proof of history, each transaction is stamped with a specific time of transaction.
What that means is that every transaction holds a time stamp. This timestamp helps to know which transaction came first. This is an area bitcoin and Ethereum found it difficult to get around. The disagreement in the order of transactions is the problem of what came first. Now, this is how proof of history works. With proof of history, every block on the Solana network carries a timestamp it does this time stamping by making use of what is known as the “verifiable delay function”.
For every transaction done on a blockchain, there is an extra security measure implemented. Each of them is hashed using a secure hashing algorithm 256 AKA “SHA-256”.
Verifiable Delay Function
So what this verifiable delay function does is add a timestamp on each block. So that when it’s to be processed the timestamp will easily tell which transaction came first. So proof of history basically just adds a little signature to these transactions.
This is the bottom line of the concept this works because every person on this Solana network trusts the accuracy of Solana’s time stamping. It’s like asking google what the time is in jamaica right now, you trust google to give you the correct answer you don’t doubt google’s time because of its reputation. The single unitary trust that the Solana community has for the accuracy of these timestamps is one major contrast between Solana and all other networks. With networks like bitcoin nodes have to verify the time from other nodes back and forth back. They have to confirm the time properly for each block and this process of confirmation actually slows down things. This is why they can only process so little per second. I’m going to give you a very easy-to-understand example to just move things up with proof of history.
Example of proof of history
So there are two companies A and B doing auditions for a job position. Carrying out these additions in these different companies are three judges a1 a2 a3 for company a and three judges b1 b2 b3 for company b. Now it’s time for the audition and the applicants are to stay in a line according to when they registered for it. Company echoes for the first person to come in and he comes in with a paper that says number one with a stamp on it and tells them that the security guard at the gate gave it to him. The judges see that right away and are instantly convinced that he’s number one because they trust the stamp on it to have only come from one credible source the security guard at the gate.
In company b the judges call for the first person to come in but this time no card with any stamp he just thinks he’s number one because he stood first in the line. Sir what’s your name please judge b1 asks alright b2 please can you check your list for me if you’re supposed to be number one, and b3 check yours too while you check mine. After much-checking judges b finds out is actually telling the truth.
Now the difference between these two companies is that judges a belief in just the security guard at the gate to always be right. Well, judge b has to first check with all judges to come to an agreement company a is Solana company b is Ethereum and the judges are the nodes all the applicants are blocks of transactions. This idea of always checking to confirm with each other results in inefficiencies and it’s why Ethereum and bitcoin can only process a few transactions per second.
Likewise, this also affects the price of the transaction phase how much you pay is dependent on how many transactions can occur in a second. If there are lots of blocks coming in frequently and these blocks can hold a huge number of transactions the price you pay to get your transactions processed will be low, because what’s the point in rushing to be in front when in no time it will be returned? This is why Ethereum and bitcoin fees will always be high.
How Solana is different from others? Solana explained
Another major difference between Solana and other networks is the criteria for being a validator. A validator simply put is someone who verifies transactions on the chain for a reward obviously. On other chains like Ethereum to be a validator you need to have a stake of 32 ether which at the point of this recording is roughly about 60 thousand dollars, with Solana it’s not like that there’s basically no required minimum amount of Solana to have before you can be a validator. The only thing that is naturally required is that you have a very high-end pc to be able to run these transactions. You can find the specifications of the kind of computers to use on the website. They need to have a very high ram CPU and the rest, while Ethereum has a large number of validators so Solana just has about a thousand validators.
Another difference about Solana is the programming language Solana uses a low-level language called rust which is more powerful, and on the other hand, Ethereum uses a virtual machine type system to run its codes written in solidity. The difference is that Solana requires the developers to do more work. You have to code from scratch up as you cannot just copy-paste your Dapps into the networks like you can with Ethereum, but on the upside, these smart contracts are more powerful than that of Ethereum.
Tokenomics of Solana Explained
Moving into the Tokenomics of Solana, it has a circulating supply of over 290 million solve with a maximum supply of 500 million. We see the price of soul heading up simply because of its use case. Like Ethereum so Solana allows developers to build tabs on the network using Sol a gas fee. This is one reason why the price keeps going up and also because people believe in the project.
Consider these things before Investing in Solana
If you want to invest in Solana these are some things you might consider taking note of. Solana explained, Number one there is a max supply this is something Ethereum doesn’t have. If there is a max supply it then means the total number of cells is capped at the max supply number and won’t ever exceed it. This gives you some peace of mind as you are sure that you are going to sleep tonight you won’t wake up seeing 1 billion new Solana coins in the market tomorrow.
Number two it has a use case as smart contracts that can be built on their network. This means people will most likely have a need for the platform since it’s super fast and you can deploy dabs on there. All of this helps to guide you in deciding what kind of projects to invest in, remember this is not financial advice so please do your own research these are just our thoughts.