Solana (SOL) Guide: All you need to know about Ethereum’s rival


Solana has grown to be one of the bigger cryptocurrencies; this is one of those that can exclusively be found online and according to the latest studies, and is among the top 10 largest cryptocurrencies by total value.


With Solano, crypto users are free to make transactions without the need for a middleman or intermediary. And with the boom in NFTs and the increased fees in Ethereum, many crypto marketers and users have turned to Solana (SOL). Solana holds a record of 65,000 transactions per second and that's one of the top reasons crypto users are running toward this blockchain.


WHAT IS SOLANA?


Solana (SOL) is a fourth-generation open-source blockchain and cryptocurrency which supports smart contracts, including NFTs and decentralized applications (dApps), that balances an open infrastructure to give greater scalability. Its blockchain network works at faster processing speeds and unparalleled enterprise-level security through the birth of new and different technologies provided to the users. Since its introduction in 2017, it has experienced considerable growth which is of no surprise.


Solana runs on a hybrid protocol system called Proof-of-Stake (PoS) and Proof-of History (PoH) which lets the blockchain maintain an accurate record of every user’s information and integrate timestamps into each approved transaction. With this, cryptocurrency owners and marketers can “stake” their crypto coins to a validator. A validator does the work of adding the next block of transactions based on a few criteria like how large their stake is, or the time taken for staking, among others. This method not only removes them from the competitive market of Proof-of-Work but also measures the commitment of each participant and gives them rewards on the merit of their dedication. The larger the stake for transactions, the more secure and decentralized the blockchain network gets.



HISTORY OF SOLANA


In 2017, Anatoly Yakovenko created Solana with the aid of fellow board member and Chief Operating Officer, Raj Gokal. Solana is what the cryptocurrency platform is called while each unit or coin is called SOL.


Coming from a background in system design, what Yakovenko had in mind when creating Solana was to build a blockchain with faster processing speeds to enable transactions to keep up with global demand. He looked at the likes of MasterCard and VISA and sought to make a blockchain that would be of the same high standards of transaction speed; a theoretical peak of 65,000 per second. The new CEO of Solana Labs has certainly achieved that over the years and at cheaper costs than other cryptocurrencies.


Solana operates on a decentralized computer network using a ledger called a blockchain. This blockchain database manages and tracks the currency, and effectively records every transaction that has ever occurred in it. The computer network records the transactions in the currency and verifies the data’s integrity.


INVESTING IN SOLANA - GOOD CHOICE OR NOT?


Solana has risen so quickly in its relatively short time in the crypto market that even those who have purchased recently are likely to have made a substantial percentage of money. But instead of being attracted by good numbers and profit gains, it is vital to understand what you are buying. From this standpoint, you can rest assured that traders are buying something that is not backed by assets or cash flow.


This is a key difference between cryptocurrency and stocks. A stock is a fractional holding of interest in a business, and its success over time depends on the growth of the underlying company. If there is notable gain, the investment is inclined to work out well. Stockholders have a legal claim on the assets and cash flow of the business, and the business may even pay earnings to investors.


In distinction, Solana – like most popular cryptocurrencies – is not supported by any important assets. What stimulates them is the positiveness and assumption of other crypto traders. Traders believe they can sell the crypto coin to other traders later for a higher price, so it is said that assumption is the propelling force behind the price rise in digital currencies.

ALL YOU NEED TO KNOW BEFORE INVESTING IN SOLANA

  1. Several people recognize it as the “Ethereum (ETH) Killer” and one of the biggest factors that pushed Solana's value is that people want alternatives to Ethereum, the second-largest cryptocurrency in the world. Like Ethereum, Solana also offers smart contracts and Non-Fungible Tokens (NFTs).

  2. Solana's speed is greatly unmatched among other cryptocurrencies. It is one of the fastest-growing cryptocurrencies on the block, processing around 65,000 transactions per second (TPS), far greater than Ethereum which does between 15 and 45 TPS currently.

  3. Most cryptocurrencies utilize a proof-of-work validation model and some others use proof-of-stake. But Solana uses a hybrid of the proof-of-history and proof-of-stake model. Solana integrates timestamps into its proof-of-history validation model, which is how it can process transactions so quickly.

  4. A crucial measure of the debate between Ethereum and its competitors is the number of projects running on each network. While Ethereum has the first-mover advantage, its competitors, including Solana, are fast catching up. Solana reportedly has over 350 projects in its ecosystem.

WHERE TO BUY SOLANA


For centralized exchanges you can buy Solana from the following:

  • Coinbase

  • Kraken

  • FTX

  • Binance

  • Crypto.com

  • BitMEX

For decentralized exchanges, Solana can be purchased from the following:

  • Raydium

  • Orca

  • Serum

CONCLUSION


If you are looking to capitalize on Solana or other cryptocurrencies, you can trade them directly or invest in the companies that could profit from the growing interest in the sector.

If you are looking to trade Solana, however, it is important to comprehend the risks, and the fact that you could potentially lose your entire investment. Not only is crypto unstable, but it’s rarely backed by any assets or cash flow. So if you’re trading crypto, don’t put in money that you can’t afford to lose.


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