Solana current price is $242.89.

Solana is a unique blockchain created mainly to host decentralized applications (dApps). It was founded in 2017 as an open-source project, meaning developers from anywhere can contribute to improve its ecosystem.

Currently, Solana is operated by the Solana Foundation, which is headquartered in Geneva, Switzerland.

Built by the San Francisco-based Solana Labs, Solana is fast in processing transactions with lower transaction fees compared to top blockchains such as Ethereum. SOL, the native token of the Solana Blockchain, is now the fifth cryptocurrency by market cap.

The token recorded massive gains of up to 12,000% in 2021 and attained a market cap of $75 billion at one point, becoming one of the largest cryptocurrencies.

Nevertheless, Solana was also a victim of the 2022 bear market, with a massive decline recorded.

Its market capitalization dropped to $3.63 billion by December 29, 2022. Solana has risen consistently since its launch and currently has a market cap above $37.8 billion after a remarkable rally between late December 2023 and early 2024.

However, Solana managed to rebound within just 6 months, with its price soaring from $20 to $200 and its market capitalization returning to $80 billion.

Key Points to Note

1. Solana is a modern blockchain platform designed to host decentralized applications.
2. Also, Solana can process several transactions per second with lower transaction fees compared to its rivals, such as Ethereum.
3. Solana relies on the Proof-of-Stake (PoS) mechanism but upgrades it with its Proof-of-History (PoH) mechanism. The PoH uses timestamps to confirm and verify the exact time a transaction occurs.

History of Solana

Solana was founded by Anatoly Yakovenko, who started his professional career at Qualcomm. His previous work experience was in the field of distributed systems design.

Yakovenko understood that a reliable clock would make it easy to synchronize a network and make it faster, but bandwidth would be the only restriction.

Therefore, he concluded that using the Proof-of-History model will improve the speed of a blockchain compared to models such as Bitcoin. Bitcoin and Ethereum will struggle to scale more than 15 transactions per second (TPS).

On the other hand, centralized payment systems such as Visa can handle up to 65,000 transactions per second at peak periods. So, to make Solana different, the Proof-of-History model uses nodes to time transactions. The nodes keep records of the time for each transaction.

What is the Proof-of-History Model?

The Proof-of-History concept was well detailed in Solana’s whitepaper published by Yakovenko. Simply, the PoH enables the blockchain to reach a consensus by confirming the duration between events.

So, it is used to encode time stamps in a ledger. Also, Yakovenko states that most public blockchains did not rely on time for confirmation.

So, each node in the network used its local clock hidden from other participants in the network. Therefore, the lack of a trusted and common time source created a problem.

If a message timestamp was used to accept or reject a message, there was no guarantee that other participants would make a similar choice.

Solana Ecosystem Growth

So, in 2018, Yakovenko formed a team with five other individuals to co-found a project called Loom. However, Loom, an Ethereum-based project, has a similar name, so the project was renamed Solana to avoid confusion.

The name Solana was coined from the name of a small beach town close to San Diego, where Yakovenko previously resided.

Also, in June 2018, Sol scaled up to operate on cloud-based networks. One month later, the founders and developers published the public test net that supported a high volume of transactions, up to 250,000 TPS.

By December 12, 2023, Solana had processed more than 253 billion transactions at an average cost of $0.00025 for each transaction.

This created a buzz in the crypto community for the Solana token. Remarkably, Solana, just like Ethereum, has its own standard of tokenization, the SPL token.

Solana’s Technology

Sol design enables algorithms to eliminate performance glitches caused by blockchain software. This design makes it secure, decentralized, and scalable. Also, its framework, in theory, can accommodate a transaction rate of up to 710,000 TPS on a standard gigabit network.

It can theoretically achieve 28,4 million TPS on a 40-gigabit network. Interestingly, Solana’s blockchain combines the Proof-of-History (PoH) and the Proof-of-Stake (PoS) models.

The PoS gives validators access to verify transactions before they are added to the blockchain ledger.

The validator qualifies to verify these transactions based on the number of coins or tokens they hold. Also, the Proof-of-History enables these transactions to be timestamped and verified swiftly.

So, Solana uses validator clusters instead of using validator nodes. In these clusters, the validators combine effort and work together to confirm transactions.

Solana Vs. Ethereum

Solana’s ecosystem has evolved and is rapidly expanding with the introduction of meme coins such as $BONK. This expansion has made it become a direct rival to Ethereum, the leading blockchain for dApps. Here’s how the two networks look side-by-side.

The advantageous transaction fees are a big reason why many new crypto presales launch on Solana

Solana Upgrades

While Solana has put in a decent effort, Ethereum, as the first altcoin, has developed a vast ecosystem. Also, it is behind only Bitcoin in terms of market capitalization.

After its 2022 upgrade, tagged the Ethereum merge, it fused its Beacon Chain and Mainnet Chain, creating the framework for a more scalable blockchain.

On the other hand, Solana has put in effort to advance and strengthen its network as more and more users adopt the platform. Tons of engineers are working on several upgrades for the network.

There’s the QUIC upgrade, made to support fast asynchronous communications, and the Stake-weighted QoS designed to stop indiscriminate acceptance of transactions on a first-come-first-served basis.

Solana’s last upgrade was the 1.16 upgrade, which was successfully implemented in October 2023 to usher in a new era of private transactions. Some of the new features introduced were zero-knowledge proofs and other enhancements for validators.

As the developers continue their hands-on activities on the network, more improvements will likely come to Solana in the coming years.

Final Thoughts

Solana is a user-friendly blockchain with practical applications and innovative features. It also controls a sizable share of the crypto market. Also, its fast transaction rate and low fees make it one of the strongest Ethereum rivals with massive prospects.

Solana has a supportive community and has become a hub of development, with many activities recorded in 2023.

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