Know Your Crypto: Solana

• Solana is a high-performance blockchain supporting builders around the world creating decentralized apps (dApps) that scale.
• It’s a fast-growing blockchain with similarities to Ethereum.

Solana is a blockchain platform designed to host decentralized scalable applications in the blockchain world and aims to improve scalability. It uses proof-of-history based on proof of stake, but with a different method of calculating time. Events are transformed into a hash that can only be generated by previous events. However, this method is slow and energy-consuming. This is one of the reasons for Ethereum’s merge, where the network converted to a proof-of-stake system. POS uses staking to define the next block.

In the crypto market, Solana (SOL) is viewed as Ethereum’s (ETH) competitor and referred to as the “Ethereum killer”. Solana is best known for its decentralized blockchain platform which is less secure but more efficient leading to high-speed and low-cost transactions.

Solana was Founded in 2017 by crypto skeptic Anatoly Yakovenko.

In an interview with Blockworks, Yakovenko mentioned that;

…with all this success, I’m a skeptic, I’m probably the biggest skeptic of crypto. With all these big ideas and growth entering the Crypto space, the skepticism is what makes it possible.

How it works

Solana blockchain uses proof of history consensus mechanism, this is based on Proof of Stake but with a different method of calculating time. This algorithm uses timestamps to define the next block in Solana’s chain. This consensus requires miners to make out what the next block will be. Solana is the only major blockchain that uses this algorithm.

Other networks like Bitcoin and Litecoin use a Proof-of-work algorithm to define blocks in their chains. PoW uses a consensus mechanism where miners have to mine for the next block.

Solana mining

Make sure to do your research before mining Solana. Prices can fluctuate and the amount of miners also determines how much profit you can make. The perfect and most powerful hardware for mining Solana is ASIC-based, and it’s rather expensive.

Alternatively, you can use a normal computer, but this has proven to be more challenging. Mining difficulty increases with the number of miners and every time the demand for a larger hash rate increases.

[Hash rate; how much computing power you are using to mine new blocks.]

Market Value

Currently, with a market cap of $11 billion, Solana is ranked at number 9 with Bitcoin (BTC), Ethereum (ETH) and Tether (USDT) taking the top three positions. The current price of one SOL is  $33.365, marking a more than 80% drop from its all-time high of $260.06. There is a total of 489 Million SOL tokens in circulation – about 260 million of these have already entered the market.