Time is something we all take for granted, but most blockchains don’t refer to time when recording transactions. Time agreement is one of the most difficult problems to solve in distributed systems, especially in opposing systems such as blockchain, where network nodes cannot trust an external time source. When one of the projects realized that no one was effectively keeping time in cryptocurrency, they decided to introduce a clock to the blockchain, which in effect made it much more efficient. That project was Solana.
What is Solana (SOL)?
Solana is an open infrastructure for building scalable cryptocurrency applications. The architecture is censorship-resistant, fast, and secure, and designed to facilitate global adoption. To keep time on the blockchain, Solana uses an innovative process known as Proof of History. PoH is not a consensus mechanism, but it plays an important role in Solana’s Proof of Stake consensus mechanism.
The result of PoH and other key Solana innovations is a network that is highly scalable – in fact, Solana boasts a maximum throughput of 50,000 transactions per second. The blockchain remains cheap and fast as it scales, with an average transaction fee of $0.00025, a block time that is usually under one second, and a sub-second finality.
Solana also maintains compatibility between ecosystem projects through its single global state, meaning no integration with multiple Shards (SHARDs) or Layer-2 solutions is necessary. Other benefits of building on Solana include audited, enterprise-grade security and the flexibility to code in popular languages like C, C++, and Rust.
How does Solana work?
The concept of Proof of History is to prove that a message occurred before or after a known event, rather than relying on a timestamp. This is similar to how a photo of a hostage holding the latest issue of a newspaper proves that the hostage was alive after that particular newspaper was published. Solana uses the Bitcoin SHA256 mining algorithm with the addition of the Verifiable Delay Function to create a historical record of events on the blockchain.
The hash function loops continuously, using each previous output as the next input, which means that the order of transactions is saved. This means that validators on the blockchain can pack as many transactions as possible into each block, and other validators can order them according to the historical record after the fact. The result is a very high transaction throughput.
For most blockchains, their throughput only applies to basic token transactions. However, in the case of Solana, the throughput of 50,000 TPS also applies to smart contracts. Ethereum and EOS virtual machines have “runtimes” that are single-threaded, meaning that the state of the blockchain is only modified by one contract at a time. Solana, on the other hand, implements Sealevel, a runtime that can process tens of thousands of smart contracts in parallel.
Who Are the Founders of Solana? (Solana History)
Solana was built by Solana Labs, which was founded in San Francisco in 2017 by a team of software engineers led by Anatoly Yakovenko. Yakovenko, along with several other members of the Solana team, spent many years working at Qualcomm, a Fortune 500 company that provides semiconductors, software and wireless technology services for mobile phones. Qualcomm is headquartered in San Diego, just south of California’s Solana Beach, which was the inspiration for the crypto project’s name.
While Yakovenko was initially not interested in cryptocurrencies, he came up with the idea to improve the blockchain’s performance with Proof of History during a feverish sleep induced by caffeine. He joined Qualcomm colleague Greg Fitzgerald, who is currently Solana’s chief engineer, to work on the project. Solana released its white paper and internal testnet in February 2018, while the Solana mainnet and SOL token launched in 2020.
What Makes Solana Unique?
The main concept that sets Solana apart from every other blockchain that came before is dProof of History, which provides it with the highest throughput of any Tier-1 (Layer-1) blockchain at the time of writing. This also applies to smart contracts, thanks to Sealevel, which is the world’s first parallel runtime for smart contracts.
These are just two of the eight major innovations that give Solana unique selling points to attract global companies. The others are Tower BFT, which is Solana’s custom implementation of Practical Byzantine Fault Tolerance; Pipeline, a network-scale transaction processing unit; Turbine, Solana’s block propagation protocol that solves the blockchain scalability dilemma; Cloudbreak, a horizontally scaled database of project accounts; Gulf Stream, a mempool-free transaction relay protocol; and Archivers, Solana’s blockchain data storage solution.
What gives Solana the cryptocurrency?
The value of the Solana network comes from the eight core innovations listed above, which allow the network to outperform most other blockchains and provide a scalable environment for global companies to deploy cryptocurrency applications.
Solana’s native cryptocurrency SOL is worth due to its utility. SOL can be used to secure networks through staking, as a validator or delegator node. It is a cost-effective choice for SOL holders, as stakers receive half of the transaction fees and most of the issuance of new tokens. SOL is also useful for developers and users of cryptocurrency applications within the Solana ecosystem, as it is required to pay transaction fees. As the Solana ecosystem grows and more transactions are processed by the blockchain, SOL will become more valuable as there will be more demand from stakers, developers, and users.
How Many Solana (SOL) Coins Are There in Circulation?
There is currently 470,265,158 SOL in circulation out of a total circulation value of No data SOL. When SOL was launched, its initial total supply was 500 million tokens, but there is no capped maximum supply. The initial inflation rate for Solana was 8%. This value decreased by 15% each year until 2031, when it reached a stable long-term inflation rate of 1.5%. Currently, half of each transaction fee is burned, meaning that more transaction volume would slow down the growth of the circulating supply.
Of the initial supply of SOL, the team kept 12.79%, 10.46% went to the Solana Foundation, 12.92% went to the founder’s sale, 16.23% went to the initial seed sale, and the rest went to the public and private sale. Solana Labs raised $25.66 million in an initial SOL coin offering and received another $314 million from a private token sale that involved Andreessen Horowitz, Alameda Research, and ParaFi Capital.