What is Solana (SOL)

what is a solana

Solana Crypto

Solana (SOL) – Definition

One of the essential innovations that Solana brings to the world of cryptocurrencies is the Proof of History (PoH) consensus developed by Anatoly Yakovenko. This concept allows greater protocol scalability, which in turn increases the ease of use. Solana is recognized in the world of cryptocurrencies due to the impressively short time that its blockchain offers. Solana’s hybrid protocol allows very short validation times, both for the transaction and for the execution of smart contracts. With incredibly fast processing times, Solana has also managed to attract a lot of institutional interest.

Solana’s (SOL) History

Created by Anatoly Yakovenko in 2019, SOL is the native cryptocurrency of the decentralized and open-source blockchain, Solana. Although the idea and the initial work of the project began in 2017, Solana was officially launched in the month of March 2020 by the Solana Foundation based in Geneva, Switzerland. With characteristics similar to Bitcoin and Ethereum, it also has some peculiarities that differentiate it from its older sisters. This cryptocurrency, Solana, is a new generation altcoin that offers many features that Bitcoin does not have, such as allowing Decentralized Applications (DApps), NFTs, and more. Although in Ethereum we can do the same, Solana can affirm (all thanks to the blockchain that it uses) that its software is easier both to produce and to use, in addition to that everything is very scalable and faster compared to Ether.

Solana’s Economy

The Solana protocol is designed to serve both small users and business customers. And thanks to its ultra-fast processing times, the Solana Cryptocurrency wowed institutional investors. With the promise that those who use it will not be surprised by the increase in fees, this protocol is designed in such a way that transaction costs will be low while ensuring scalability and fast processing.

Solana How does it Work?

SOL tokens are being burned in an integrated deflationary process. In addition, SOL holders can become validators of the network if they wish. At the same time, SOL makes use of the protocol called SPL, a token standard of the Solana blockchain which is similar to Ethereum’s ERC-20. There are two types of use for the SOL Cryptocurrency:
  1. Allow paying the commissions of the transactions or smart contracts that are carried out within this network.
  2. Allows staking of these tokens thanks to the Proof of Staking (PoS) consensus mechanism.

Within the Solana network, different types of DApps are developed which allows new types of uses for the SOL token. Chainvote is developing a Defi voting mechanism that enables corporate governance using SOL tokens to vote.

Solana Addresses

A Solana address is a form of unique identification for each of the network users, which fulfills the objective that we can make transactions (either send or receive) cryptocurrencies quickly and easily. In the world of cryptocurrencies, addresses fulfill the same objective as in the traditional fiduciary system, both to send and receive money. This means that it works as a kind of bank account.

Solana Transactions

A transaction carried out with Solana is nothing more and nothing less than a transfer of values ​​between two portfolios which is registered in the blockchain. In order for the money to be sent from a wallet, the emissary will first have to sign the transaction with his unique private key in order to prove that he is the owner of said funds.

Solana Mining

Proof of History is a new way in which computers can create blocks that form a chain of blocks. But first, we are going to review the differences between the different methods. In Bitcoin there is a system called Proof of Work (PoW), in which nodes (computers or mining equipment) compete to solve the crypto puzzle, or mathematical problem, thus demonstrating that they have managed to do a certain amount of work before being able to add a block to the chain. Proof of Stake (PoS) chooses a node at random, but with an orientation towards who has the largest participation, which means that not everyone is spending energy trying to win the race (this saves a lot of energy). Although both require a lot of communication between nodes (computers), which is time-consuming. The Proof of History (PoH) does not. It just uses a series of timestamps so everyone knows what’s going on. This lack of time between computers translates to more speed. SOL Cryptocurrency is based on a unique combination of Proof of History and Proof of Stake consensus mechanisms.

Solana Privacidad

Each of the transactions is registered in a public book which is called blockchain, this book allows us to investigate the history of a cryptocurrency in order to avoid theft, copies, or someone undoing the transactions.

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