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!
Table of Contents
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.
Yakovenko worked at Qualcomm before founding Solana. He has a wide range of experience with compression algorithms after his previous experience at Dropbox as a software engineer. Along with Eric Williams and Solana’s CTO, Greg Fitzgerald, they created a new process of dealing with traditional throughput problems that existed in the Bitcoin and Ethereum blockchains.
They hoped to create a trustless and distributed protocol that would allow for more scalability. The team currently is backed by experiences from top organizations in the world including: Apple, Qualcomm, Intel, Google, Microsoft, Twitter, Dropbox, and more. The impact that Solana has created also brought the attention of many investors that include: Multicoin Capital, Foundation Capital, SLOW Capital, CMCC Global, Abstract Ventures, and more.
https://genesisblockhk.com/what-is-solana/
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, which 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 a 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.
How Solana Works
Solana, through its proof-of-history (PoH) protocol, is revolutionizing how blockchains work. By allowing validators to be in charge of their own clock, there is a reduction in the transaction verification process, since the nodes don’t have to put in processing power before they can verify various timestamps.
In addition to the proof of stake approach, Solana timestamps every transaction done by users thus eliminating the ability to re-order transactions to a customer’s advantage. This helps make Solana a more convenient network.
Also with a cryptocurrency wallet, you can use Solana to send or receive the coin or transfer it in exchange for goods and services. You can as well create and use permission-less payments, to avoid centralized or government control.
Apart from its other functions, Solana supports the development of a range of other apps, including games, investing, social media and more.
In addition to a proof of stake approach to validate transactions, Solana timestamps them, eliminating the ability to re-order transactions to a validator’s advantage.
This helps make Solana a “censorship-resistant” network. A lot of cypto users will like to think of Solana as a token that can power various apps rather than merely as a currency that transfers monetary value from one person to another.
Who Owns Solana
Anatoly Yakovenko is the creator and Co-founder of Solana. He designed Solana to support smart contracts and the creation of decentralized applications, or dapps. Before the creation of Solana, Anatoly Yakovenko has an illustrious career in technology.
He was the Senior Staff Engineer Manager of Qualcomm, a position he held for almost 3 years which ended in July 2016. From July 2016 to April 2017, he was also a Software engineer at Mesosphere, now known as D2iQ.
He essentially built a distributed operating system for the firm. He also worked as a software engineer at Dropbox (service) from May 2017 to October 2017.
Anatoly has a degree in Computer science from the University of Illinois at Urbana-Champaign, he graduated in 2003.
History of Solana
In November of 2017, Anatoly Yakovenko published a whitepaper describing Proof of History, a technique for keeping time between computers that do not trust one another.
From Anatoly’s previous experience designing distributed systems at Qualcomm, Mesosphere and Dropbox, he knew that a reliable clock makes network synchronization very simple.
When synchronization is simple the resulting network can be blazing fast, bound only by network bandwidth.
Anatoly watched as blockchain systems without clocks, such as Bitcoin and Ethereum, struggled to scale beyond 15 transactions per second worldwide when centralized payment systems such as Visa required peaks of 65,000 tps.
Without a clock, it was clear they’d never graduate to being the global payment system or global supercomputer most had dreamed them to be.
When Anatoly solved the problem of getting computers that don’t trust each other to agree on a time, he knew he had the key to bring 40 years of distributed systems research to the world of blockchain.
The resulting cluster wouldn’t be just 10 times faster, or 100 times, or 1,000 times, but 10,000 times faster, right out of the gate!
Anatoly’s implementation began in a private codebase and was implemented in the C programming language. Greg Fitzgerald, who had previously worked with Anatoly at semiconductor giant Qualcomm Incorporated, encouraged him to re-implement the project in the Rust programming language.
Greg had worked on the LLVM compiler infrastructure, which underlies both the Clang C/C++ compiler as well as the Rust compiler. Greg claimed that the language’s safety guarantees would improve software productivity and that its lack of a garbage collector would allow programs to perform as well as those written in C.
Anatoly gave it a shot and just two weeks later, had migrated his entire codebase to Rust. With plans to weave all the world’s transactions together on a single, scalable blockchain, Anatoly called the project Loom.
On February 13th of 2018, Greg began prototyping the first open-source implementation of Anatoly’s whitepaper. The project was published to GitHub under the name Silk in the Loom protocol organization. On February 28th, Greg made his first release, demonstrating 10 thousand signed transactions could be verified and processed in just over half a second.
Shortly after, another former Qualcomm cohort, Stephen Akridge, demonstrated throughput could be massively improved by offloading signature verification to graphics processors. Anatoly recruited Greg, Stephen and three others to co-found a company, then called Loom.
Around the same time, the Ethereum-based project Loom Network sprung up and many people were confused about whether they were the same project. The Loom team decided it would rebrand. They chose the name Solana, a nod to a small beach town north of San Diego called Solana Beach, where Anatoly, Greg and Stephen lived and surfed for three years when they worked for Qualcomm. On March 28th, the team created the Solana GitHub organization and renamed Greg’s prototype Silk to Solana.
In June of 2018, the team scaled up the technology to run on cloud-based networks and on July 19th, published a 50-node, permissioned, public test net consistently supporting bursts of 250,000 transactions per second.
In a later release in December, called v0.10 Pillbox, the team published a permissioned test net running 150 nodes on a gigabit network and demonstrated soak tests processing an average of 200 thousand transactions per second with bursts over 500 thousand.
The project was also extended to support on-chain programs written in the C programming language and run concurrently in a safe execution environment called BPF.
Conclusion
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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