What Is Solana (SOL) and How Does SOL Crypto Work?
What Is Solana (SOL)?
Solana is a blockchain with striking similarities to Ethereum—in fact, it’s often referred to as an 'Ethereum killer.' Like Ethereum, the SOL token can be purchased on most major exchanges. The token’s real value is in conducting transactions on the Solana network, which has unique advantages.
The cryptocurrency that runs on the Solana blockchain—also named Solana (SOLUSD) and using the ticker symbol SOL—soared almost 12,000% in 2021 and at one point had a market capitalization of over $66 billion, making it the fifth-largest cryptocurrency by this measure at the time.
How does Solana work?
The core component of the Solana protocol is proof-of-history, a sequence of computations that provides a digital record that confirms that an event has occurred on the network at any point in time. It can be presented as a cryptographic clock that gives a timestamp to every transaction on the network, along with a data structure that can be a simple addition of it.
PoH relies on PoS using the Tower Byzantine fault tolerance (BFT) algorithm, an optimized version of the practical Byzantine fault tolerance (pBFT) protocol. Solana uses it to reach a consensus. The Tower BFT keeps the network secure and running and acts as an additional tool to validate transactions.
What Makes Solana Unique?
By using a unique blend of proof of history and delegated proof of stake, Solana offers exponentially faster transaction speeds than its closest competitors, Ethereum and Cardano (ADA), at a fraction of the cost, Anissimov says by using a unique blend of proof of history and delegated proof of stake.
Unlike proof of work, which uses the miners themselves to define the next block in a chain, or proof of stake, which uses staked tokens to define the next block, proof of history uses timestamps in its definition of blocks for the Solana chain.
Solana vs. Ethereum
Solana and Ethereum hold some things in common, but they also have stark differences. Here is a short breakdown of where the two platforms overlap and where they diverge:
In addition, Hazim mentions it’s important to note that Solana Labs, Solana’s technology company, is working on several interesting products. These include Solana Pay, allowing cheaper, safer and faster transactions.
Solana Labs has also launched the Solana Mobile Stack. This Android toolkit opens up the possibility for mobile expansion. Solana expects to launch its mobile phone, the Solana Saga, in early 2023.