After dominating headlines recently following an impressive bull run, many traders are looking to get in on the action. As we explore what Solana (SOL) is, we take a look at the project's intentions, successes and of course why it is often referred to as the leading "Ethereum killer".
Since Bitcoin was created in 2009 an entire crypto ecosystem has been created, valued at almost $3 trillion to date. While Bitcoin was designed to provide a global payment system to address problems in the traditional financial sector, other platforms like Ethereum and now Solana have been created to facilitate the development of the blockchain industry as a whole through programmable functionalities.
What is Solana (SOL)?
Recognised as being one of the fastest-growing protocols in the DeFi space in 2021, the blockchain network provides a platform on which developers can create decentralized applications (dapps) and smart contracts. While this may sound like something you've heard before in the crypto industry (like Ethereum for instance), the Solana network sets itself apart from the crowd by offering faster operations and lower transaction fees.
The project has two main heads, the Switzerland-based non-profit organisation Solana Foundation which is responsible for promoting the platform and working with international partners, and the San Francisco based Solana Labs, responsible for spearheading the project's development.
Contributing to a more eco-friendly world, Solana uses a Proof-of-Stake consensus to maintain operations on the platform, alongside a unique Proof-of-History (PoH) consensus that one of the founders created. Revolutionary to the blockchain space, PoH enables the network to process 50,000 transactions per second and is described as a "timekeeping technique to encode the passage of time within the data structure."
As one of the fastest programmable blockchains in the cryptocurrency space, Solana has created a well-deserved following, as indicated by the SOL demand and subsequent price increase. It has also become home to a wide range of cryptocurrencies, including the likes of Chainlink, The Graph, Waves, REN among many others.
Who Created Solana?
Software engineer, Anatoly Yakovenko, is responsible for creating the Solana platform. He started working on the blockchain project in 2017, three years prior to its launch, alongside his former colleagues Greg Fitzgerald and Eric Williams. They teamed up with several other former colleagues and together built the programmable network we know today.
Anatoly Yakovenko also developed the PoH protocol, an innovative contribution to the blockchain space that allows for greater scalability, thereby boosting usability. A key factor in impressing investors that have tired from traditional coins like Bitcoin and are looking for more innovative platforms.
How Does Solana Differ From Ethereum?
One of the platform's main aims is to improve on several of the Ethereum platform's computing functionalities. While ticking the "faster" box when it comes to transactions, Solana has also managed to improve its scalability and cost structure.
While the project's leads say that Solana will process up to 700,000 transactions per second (TPS) as the network grows, it can currently handle around 50,000 TPS, still a far cry from Ethereum's 15 to 45 TPS.
Solana is one of the few layer-one solutions from a computing platform that is able to support thousands of transactions per second without the use of off-chains or second layers.
Due to the nature of the Solana network, it is able to provide much more cost-effective transactions, generally costing around $0.00025 per transaction. A sizable decrease from Ethereum transactions can cost in the realm of $50.
What Is SOL?
SOL is the native cryptocurrency to the Solana platform powering its scalability and reduced cost structure. The cryptocurrency acts as a utility token, used for staking and paying transaction fees.
Following the token's success, it has increased by a whopping 88,900% (at the time of writing) from its initial ICO price of $0.22. The proof is in the pudding here.
Solana Performance In 2021
Since launching in 2020, Solana has seen impressive growth and increased industry interest. It has also become known for increasing in value while most of the other crypto markets were on the decline.
Over August and September, the cryptocurrency increased over 200%, before rallying to its all-time high of $218.73 on 25 October.
A key contributor to Solana's success is its backings from various companies and individuals, including Alameda Research, FTX, Andreessen Horowitz and Polychain.
Able to support a multitude of sectors, the Solana ecosystem currently incorporates over 230 companies spanning from oracles to automated market makers (AMM) to wallets, exchanges and stablecoins. Solana has also been popularized by the NFT boom, with the first major NFT project (Degenerate Ape Academy) launching on the blockchain collecting a large amount of attention.
How Can I Buy SOL?
If you're looking to diversify your crypto portfolio with the likes of Solana, we've got news for you. Tap Global has recently added this to their portfolio, allowing users to seamlessly buy, sell, trade and store SOL through the convenience of the Tap app. Using crypto or fiat money, users can tap into this growing market and become part of the Solana-driven blockchain revolution.