What is Solana? Features and Working System
The world has been concerned about the effects of “crypto mining” since cryptocurrencies first gained attention. Cryptocurrencies like bitcoin and Ethereum require 91 terawatts of electricity to mine, which is significantly more than the energy consumption of 5.5 million individuals. Not alarming at all!
From there, the idea of Solana gained popularity. Building DeFi applications and SOL currencies is possible using the blockchain network Solana. Although Solana is still in beta, many people are interested in its brand-new, energy-efficient ecology.
Let’s gradually comprehend the fundamental terms related to Solana. To begin with, what is Solana?
What is Solana?
Solana is a blockchain platform for creating currency similar to bitcoin and Ethereum. The fast transaction speeds of Solana are the sole thing that set it apart from Ethereum. This recently popular blockchain network is special since it can process 50,000 transactions per second.
Whether creating applications or mining SOL tokens, Solana can add a variety of attributes to its current network in a matter of microseconds. This coin is frequently referred to as “Ethereum’s rival.” The Solana protocol is quick, safe, and censorship-proof. Solana’s “decentralised” blockchain network combines proof-of-stake and proof-of-history techniques. It has a solid foundation for protecting transactions because it is built on the RUST programming language.
Let’s examine the “distinctive traits” of Solana in more detail.
Features of Solana
1. Proof of History
The blockchain network of bitcoin and Ethereum uses a “proof of work” methodology to enable and restrict entries on its database. Proof of work states that every node must reach consensus before each new entry.
PoW is highly complicated and slows down transaction speed; PoH (Proof of History) was invented to address these drawbacks. Proof of history simply means that a new block can be added to the blockchain network without consent from other users.
Every node in Solana has its own clock, and they all make choices independently. Proof of History speeds up transactions, creates a reliable blockchain network, and maintains a record of all transactions.
2. Tower Byzantine Fault Tolerance (BFT) Algorithm
The BFT system acts as a safety net for the Solana ecosystem, ensuring that a single node failure won’t affect how the system functions. Thanks to this method, the nodes can operate even after several failures.
The Gulfstream system eliminates “meme pool needs.” The unprocessed transactions can be seen as waiting in Memepool, which functions as a waiting room. Solana’s network can handle one million transactions using its memory pool size. There are validators in every blockchain ecosystem (validators select transactions and add them to the blockchain network). Even before a new transaction is created, Solana’s network forwards the existing transactions to its validators. There are no “unconfirmed transactions” left in the Solana ecosystem due to the simultaneous clearing of the meme pool area by validators.
Multiple smart contracts can operate simultaneously, thanks to Solana. As a result, Solana is a time- and money-saving blockchain network. Sealevel is the name of the technology that allows Solana to run many smart contracts simultaneously.
How does Solana work?
Solana uses a combination of Proof of History (PoH) and Proof of Stake (PoS) to process transactions quickly. Proof of History is a simple method to validate transactions without interacting with nodes. People stake their cryptocurrency in the Proof of Stake mechanism, which verifies transactions.
A given node is granted the “leader position,” and every given node with the leadership position must produce the whole “proof of history” statement. This is how PoH works. The blockchain network’s leader node, after accepting responsibility, coordinates with other nodes to produce a proof of history declaration.
Additionally, the leader node pushes the execution of the ongoing transactions, publishing them in their final nodes with “verifiers” afterwards. The same transactions are carried out once more by verifiers to “verify” them. Additionally, the verifying parties make copies of the transactions and disseminate them.
There is one leader for each Solana network. The verifier node performs intelligently and has similar characteristics to a leader node; however, through “proof of stake” elections, the verifier node can also become the leader.
For Solana to operate most efficiently compared to the blockchain networks of bitcoin and Ethereum, a hybrid of PoH and PoS is required.
What is the Solana token?
The Solana SOL token, based on the Solana blockchain network, has a current circulating quantity of “26 million.” Since the launch of the Solana blockchain network, the value of the SOL token has surged. The Solana SOL token is a cryptocurrency like bitcoin, Ethereum, and Dogecoin.
Through “proof of stake,” Solana (SOL) tokens can also be utilised to generate additional revenue (the process of validating transactions on the block is known as proof of stake).
Rise of Solana
In August 2021, Solana, a relatively unknown blockchain network, ruled the cryptocurrency charts. Each person hurried to get a piece of it for investment. The price of Solana tripled in August, and this alternative coin gave individuals a secure method to invest in “cryptocurrencies.”
Solana’s journey began with a basic price of $36 and ended with a price of $100 in just one month. Within a few months of its launch, it became the seventh-largest cryptocurrency. Increasing investor and individual interest in Solana’s blockchain network is the primary driver of the cryptocurrency’s skyrocketing prices.
Solana’s blockchain network is used by most businesses creating DeFi applications. The value of Solana’s DeFi projects has surpassed $3 billion, and businesses are eager to invest in Solana for NFT initiatives. Solana has ended Ethereum’s monopoly. Certain businesses created on Solana’s blockchain network this quarter experienced treble growth.
A blockchain network called Solana has the potential to revolutionise finance. This energy-efficient device can process multiple transactions fast, and that too all at once. Solana’s future appears promising, particularly in the age of DeFi applications and NFTs.