Solana is a public decentralized blockchain platform that is based on proof of stake and proof history. The internal currency of Solana is SOL. What problem is Solana trying to solve, and how does it offer any benefits to you? Will Solana ever become so useful or so popular to make the price of SOL rise?
In this Solana review, we would take a look at the problems Solana is trying to solve, the solutions Solana professes, and the tokenomics of SOL to determine if SOL could moon for you to get that Lamborghini you want.
Let’s dive deeper!
What Problem is Solana Trying to Solve
Bitcoin created the first decentralized currency or store of value as it is now known, Solana is creating a decentralized computer network, that provides developers to create applications that are decentralized in nature and thus unstoppable.
Solana is similar to Ethereum in many ways because they solve the same problems.
However, Solana is faster and cheaper than Ethereum in its current state, and it is fast catching up.
The challenge about running decentralized applications has to do with the cost of transactions, with decentralized applications, every activity you perform on the D’app comes at a cost, however, ethereum gas prices are sometimes so astronomical making it unfeasible for daily usage for decentralized applications.
Ethereum is the first blockchain platform that made the idea of a decentralized platform for smart contracts and decentralized applications feasible, however, Solana is faster and cheaper, causing many developers to chose Solana over ethereum.
When was Solana Started
Solana was started in 2017 by Anatoly Yakovenko.
Where can I buy Solana (SOL)
You can buy Solana (SOL) from any of the following exchanges, you can buy SOL with your credit card, you can also exchange other coins for SOL in any of these exchanges.
Which Solana Wallet is Best
After you have purchased your Solana (SOL), it is important to keep it off exchanges. Remember, not your keys, not your coins. The only way to secure your valuable SOL is to keep them in one of the best wallets for Solana below.
- Ledger NanoX
- Math Wallet (iOS and Android and Browser Extensions)
- Exodus (Desktop and Mobile)
- Atomic Wallet (Desktop and Mobile)
- Sollet Wallet (Web Wallet)
- Coin98 Wallet (iOS and Android)
- Solong Wallet (Browser Extension)
Why is Solana Going Up
Sometimes cryptocurrencies’ soar higher based on pure hype and marketing, however, Solana is providing real solutions to real-world problems. This drives the demand for Solana, and as more and more people get used to the efficiency and efficacy of Solana, the price is bound to move upwards.
Can Solana Reach $1000
There is no doubt that Solana would soar higher, Solana can reach $1000 and even surpass it if its usage continues. Solana out of the box comes with clever design, cheaper fees, and faster transactions that would make it a go-to place for the development of decentralized applications.
Increase demand would cause Solana to soar even higher, but there is also the chance that other competitors like Ethereum and Cardano would fix the issues associated with them, done within enough time frame, it would be extremely difficult to convince developers on ethereum to move to Solana when indeed Ethereum has fixed it’s slow transaction speeds and higher fees.
Regardless of the above, there is enough room for many players in the decentralized world. Competition is good and healthy for users, we believe Solana has a good head start to become the best-decentralized platform in the world.
Why Solana Would Fail
The Solana blockchain was shut down temporarily in September 2021.
1/ Solana Mainnet Beta encountered a large increase in transaction load which peaked at 400,000 TPS. These transactions flooded the transaction processing queue, and lack of prioritization of network-critical messaging caused the network to start forking.— Solana Status (@SolanaStatus) September 14, 2021
For a blockchain that claims to be; secure and censorship-resistant, it is terrifying to know that it can be shut down.
For this instance, Solana was restored, but what if in the future, the core developers could not or refused to restart the blockchain.
To be fair, the whole idea of decentralization is to take such power off the hands of a centralized entity, even if that such centralized entity is the developers themselves.
Solana being shut down and restarted is a huge worry for the majority of people in the cryptocurrency ecosystem.
Can Solana Over take Ethereum
Ethereum was the first public blockchain to allow smart contracts, and the development of decentralized applications, its downsize has to do with speed and cost.
Solana is solving these problems that Ethereum has, by being fast, and cheaper. At the moment Solana is increasing in price and many developers are getting on board.
However, Ethereum is solving its challenges, and moving to a faster proof of stake system to help increase the speed of the ethereum blockchain.
The solution is also targeting the gas fees, which are often higher than its competitors. Should Ethereum succeed in achieving both increased speeds and less transaction cost, it would have had the unique ability to succeed on all fronts.
Ethereum has also proven over time to be truly decentralized, where Solana’s shutdown discussed above, puts its truly decentralized nature into question.
Solana would obviously attract more and more developers with time, and the price would continue to increase with increased adoption, however, we do not believe that Solana, would overtake Ethereum.
Tokenomics of Solana (SOL)
A total of 506,144,073 SOLS would be in circulation, the current statistics are as follows;
At its inception, 500,000,000 SOLs were created at the genesis block, Solana has an inflation model which produces new coins into circulation, in contrast, Solana also has a deflationary model which burns transaction fees. The rate of inflation (introducing new coins) and deflation (burning coins) are not constant.
Indeed, according to coin market cap, the total number of SOLs available at the moment is 506,144,073 SOLs which is higher than the initial.
The annual rate of inflation for Solana is around 8% but reduces 15% year after year to reach a final inflation rate of 1.5%.
However, the deflation rate for Solana (the rate at which coins are burnt) remains constant at 50% of transaction fees.
This means that it is possible for the total number of SOL’s to decrease with increased transaction numbers if 50<5 of the transaction fees exceed the rate of inflation.
At the moment, the rate of inflation is higher than the rate of deflation, that has added about 6 million more SOLs into circulation, however, the price of SOL has continued to rise despite this inflation rate primarily due to lack of demand for Solana and it’s visible presence on the internet.
If the price of SOL has risen to $148 at the time of press, with all this inflation, we believe that as the rate of inflation decreases, and adoption increases, SOL could easily rise above $2000
Why Does Solana Have Both an Inflation and a Deflation Model
Solana was designed for everyday use, the inflation model is introduced to ensure that users don’t confuse SOL as a store of value and thus hoarding it instead of using SOL as in the case with Bitcoin.
Some level of inflation is good, if you want to have a currency for everyday use, thus this model implementation is actually awesome. The challenge, however, has to do with the rate of inflation, and deflation.
We do not know why the figures were chosen, but it is obvious that with increased demand increasing the transaction fees available to be burnt, and with increasing years reducing the percentage of inflation, SOL would eventually become a deflationary coin.
Which by the way is great for early investors.
Solana is a cryptocurrency with great potentials and if it would solve the debate around its decentralized nature once and for all. In terms of price, we do believe that Solana has huge upsides.
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