Solana: what is it, how does it work and what is the price of SOL

What is Solana (SOL)?

Solana (SOL) is one of the sizable top 10 cryptocurrencies with the largest market capitalization. Solana emerged as a blockchain designed solely and exclusively for DApps (decentralized applications) that aim to be an alternative to Ethereum.

This new generation blockchain project seeks to offer a highly secure, reliable and scalable platform. It also wants to potentially involve thousands of nodes without the need for hardware to reduce power.

Solana has a native cryptocurrency named SOL that works as a utility token. With said token, the costs of the transaction commissions are paid and they also interact with the smart contracts. Another important aspect is that SOL tokens are burned in an integrated deflationary process.

History of the Solana cryptocurrency

Tmain person responsible for the existence of Solana is Anatoly Yakovenko, creator of the network. For the funding process, an ICO was launched in 2017 that managed to raise more than 25 million dollars and, in consideration of the Solana mainnet, the same was launched in March 2020.

The project was initially known as Loom, but shortly after it changed its name to Solana, a name that would later be used for the registration of the company Solana Labs, in March 2018.

Characteristics of this altcoin

Solana is a cryptocurrency that has multiple characteristics that make it unique and differentiate it from the others. It is a digital asset that generated a lot of impact and revolutionized the crypto ecosystem.

Proof of History (PoH)

Any operation on the Solana blockchain generates a hash based on the SHA256 encryption algorithm. This algorithm takes an input and generates a unique output that is very difficult to predict. What Solana does is take the output hash of a transaction and use it as input for the next hash. What this does is introduce the order of transactions in the following output.

This hashing mechanism generates a long, seamless chain of transactions. This allows generating a clear and verifiable order of the transactions that a validator then adds to a block.

Proof-of-History (PoH) therefore differs greatly from the Proof-of-Work (PoW) consensus of Bitcoin or Ethereum. These two cryptocurrencies aggregate the transactions in blocks without the slightest order. What PoW miners do is add a timestamp, which is the time and date when the block was generated, according to the clock of each blockchain. The timestamp can vary by node and can even be false, forcing nodes to verify that the timestamp is valid.

By ordering transactions into hashes, validators have less information to process in each block. Using a hashed version of the last state of a transaction reduces confirmation times for new blocks.

Turbine

Turbine is theblock propagation protocol that facilitates the distribution of information to nodes, helping to maintain consensus. This should be a quick process, as blocks in Solana spawn every half second or so. The block propagation process is required to be faster than the block generation.

Gulfstream

Gulfstream is a storage protocol for network transactions. It is in charge of receiving the transaction and sending it to all the nodes, prioritizing the generating nodes. It allows all the nodes of the network to access the information necessary for the recreation of the blocks. Solana creates the blocks through a quorum-based election that has the power to generate a block and broadcast it to the network.

Sealevel

Solana offers the ability to parallelize transaction validation and the ability to run smart contracts. This feature enables the ability to read, execute, and write instructions in parallel within the Solana smart contract execution layer.

Tower BFT

Tower BFT acts as a 'judge' within the timestamp system running on the Solana network. A synchronized clock is used between all the nodes that serves as a point of control, verification and acceptance of the work done by the nodes. Thus, it makes it possible to create a decentralized consensus on the work and its acceptance by the network.

How does Solana crypto work?

As we mentioned earlier, the centerpiece of Solana is the Proof-of-history protocol.sequenceof calculations that provides a digital record confirming that an event has occurred on the network at any time.

It is used by Solana to reach consensus, keeps the network safe and running, and acts as an additional tool to validate transactions.

Solana Cryptocurrency Future

It is difficult to determine the future price of Solana and to establish a forecast or prediction of Solana for the coming months. It can be identified thatthe price of SOL is falling since it reached an all-time high of $259 on November 6, 2021.

Solana Argentina - Frequently Asked Questions

What function does Solana have?

Solana is known for short processing times that the blockchain offers. Solana's hybrid protocol enables significantly reduced validation times for both transaction and smart contract execution

How many transactions can be done on Solana?

Thanks to its fast protocol, network Solana theoretically process more than 710,000 transactions per second (TPS). Its blockchain is designed to streamline smart contracts and the creation of decentralized applications (DApps).

How many tokens does Solana have?

Solana announced that a total of 489 million tokens SOLFor now, some 260 million of these have already entered the market.

Who is behind Solana?

The person most responsible for the existence of Solana is Anatoly Yakovenko, creator of the network known as one of the fastest in the world in the cryptoactive ecosystem.

How much did Solana cost when it came out?

The first round of private financing took place in March 2018 and less than 80 million SOLs were sold for USD $3.17 million, or USD $0.040 per SOL.