The transformative capabilities of open source #blockchain platforms are impressive.
Solana intends to bring this utility to the entire world.
Admittedly, this is an ambitious target. Regardless, it is tenable—explaining why SOL—the native currency of the Solana blockchain—was one of the top-performing coins in #crypto.
In view of what Solana developers are building, many investors, developers, and inevitably an army of traders have come onboard. As of late August 2021, Solana had a market capitalization of $20.5 billion.
So, to answer the longevity question: Solana is here to stay.
It has the financial muscle, a global community, and high-profile investors to take it to the next level.
If this is the case, what is the project all about?
Cycling back to the Basics: Introducing Solana
Solana is an open-source blockchain project that adds value to #DeFi and other critical sectors.
One would contend that there are hundreds of similar public ledgers aiming to carve out a market share from the same client base.
How is Solana differentiated? Or, better still, what is its value proposition?
Solana improves on what predecessors like the Ethereum blockchain achieved.
The objective of Solana is to bring dApps to the world. That demands speed, low fees, and scalability—features sorely missed before this next-gen blockchain founded by Anatoly Yakovenko in 2017, raising $25 million in an ICO, launched. Before delving into #crypto, Anatoly was an executive at Qualcomm and DropBox. He is well versed with distributed systems and how to improve them using the blockchain.
As Solana operates, it remains decentralized using 200 distinct nodes distributed worldwide making the network highly performant. Solana has a throughput of 50k TPS when using GPUs.
What Are Distinguishing Features of The Solana Blockchain?
Solana developers are building solutions. The biggest, during launch and subsequently when it received an extra $20 million capital injection from Multicoin Capital in 2019, was scalability.
A high throughput network translates to lower transaction fees without necessarily incorporating layer-2 solutions—as is the case in #Ethereum. By default, Solana can process over 50k TPS—several orders of magnitude above Ethereum’s measly 15 TPS at peak.
Proof-of-History, Tower BFT, and Proof-of-Stake: Hybrid Consensus Algorithm
Making this possible is Solana’s solid foundation.
Architecturally, the platform’s core is designed for efficiency. In this case, they deploy a hybrid consensus algorithm for speed and energy efficiency.
Not to be confused, Solana uses a Proof-of-stake system with notable reinforcement from Tower BFT integration with additions from Proof-of-History.
Solana has implemented a tweaked version of #Bitcoin’s SHA-256 through the Proof of History (PoH), ingeniously merging it with Tower BFT—the core for the platform’s slashing rule– and a Proof-of-Stake consensus algorithm.
There is an understandable confusion by some that PoH is the network’s main consensus. But, in reality, it is just a decentralized clock—not a consensus protocol or an anti-Sybil protection mechanism. It eliminates the need for Sharding as a means of scaling the platform while also concurrently protecting the system against brute force attacks. Additionally, since it is a type of verifiable Delay Function (VDF) it inherently requires more computational time to evaluate than verify.
On the other hand, TowerBFT leverages PoH’s permissionless clock for the smooth encoding of vote lockouts. This way, the system is protected against malicious validators who may want to confirm two different blocks of Solana’s hard fork simultaneously.
Beyond tweaks in consensus and their inclination towards efficiency, Solana also has Archievers which split up and distribute the storage requirements of the public ledger.
This is a necessity because at full capacity, Solana developers project the chain to grow at a rate of 4 Petabytes a year.
The humongous storage requirements will put off a lot of people.
By distributing storage via light clients across the world, this problem is bypassed, and the network is made even more robust. Light clients forming the global web of Archievers are to be incentivized with three percent of SOL annual inflation.
Meanwhile, Solana Turbines aid in breaking down data into packets as a means of maintaining high scalability during data dissemination to all its nodes.
It is the same idea in use by Tron’s BitTorrent.
This way, data distribution to nodes will be faster even with lower bandwidth, helping in scaling.
On the other hand, SeaLevel is Solana’s parallel smart contract runtime. It is a new innovation through which the network can scale horizontally using a series of cheap and readily available GPUs and SSDs. Through this parallelism, it is possible for the network to concurrently transact, resulting in better runtime.
SOL—Solana’s Native Currency
Like in #Ethereum, SOL is native to the platform and is a utility token. Solana being a smart contracting platform, would need an enabler facilitating settlement and payment of Gas. SOL comes in handy.
Besides payment of Gas, it can be used for micro-payments (lamports) within the Solana ecosystem and for staking. To become a validator, one needs to stake a minimum of 0.01 SOL.
As of late August 2021, there were 502,241,946 SOL as total supply. Out of this, 286,583,547.40 SOL were in circulation each trading at $71 according to coin trackers for a market capitalization of $20.7 billion.
With this valuation, Solana earned a place in the top-10 of the #crypto leaderboard.
Blockchain continues to gain more prominence finding adoption from individuals, companies, parastatals, and governments.
Following this demand, a modern, high performant blockchain is needed to overcome inherent challenges faced by legacy ledgers like Ethereum.
Solana is one of the few truly decentralized blockchains which can process over 1k TPS.
With a market cap of over $20.5 billion and growing, Solana’s value proposition will extend its longevity, making it one of the most adopted ledgers around.