Today, the crypto market is a fast-growing business with a huge number of crypto projects. Each of these projects wants to be better than the others and be among the top ones in terms of market capitalization. One of these projects is Solana, an ambitious crypto platform whose token is considered to be the main competitor of Visa and has consistently held a leading position in the crypto market for a long time.
This article will shed some light on what the Solana project is, what its history is, and what role it plays today in the crypto market.
Key Takeaways
- Solana has been in the top 10 most expensive cryptocurrencies in the market for several years due to the stable development of the network.
- Solana is the first crypto project powered by the Proof-of-History (PoH) algorithm that can eliminate the traditional limitations of low transaction speeds, high fees and excessive energy consumption.
What is Solana?
Solana is an open-source crypto platform based on blockchain technology and designed by Solana Labs company to support scalable decentralized applications (DApps). This platform has its own, very popular digital currency at the moment, which, despite everything, steadily holds itself in the top 10 cryptocurrencies by capitalization and is considered one of the most successful crypto start-ups in the industry, developing a blockchain system with an incredibly high chance of becoming one of the most advanced payment systems ahead of Visa by the number of transactions processed per unit time.
Solana is a first-level blockchain with no side chains or parachains that uses a unique consensus mechanism called Proof of History (PoH), allowing the project to support many transactions with faster processing. Solana’s consensus mechanism also helps alleviate one of the biggest problems other competing blockchains face – transaction front running. The importance of this technology is that most networks spend time and resources synchronizing transaction times between network nodes. The creators of SOL have implemented a centralized clock, by which all nodes can synchronize without wasting resources.
Also, the high throughput of the Solana ecosystem is provided by the Turbine protocol. Its essence is that each node does not send information to the whole network but only shares data with its neighbors, and they, in turn, share data with their neighbors. Smart contracts run in parallel using the Sealevel protocol, ensuring high-speed operations. Such characteristics give Solana blockchain an undeniable advantage over many crypto market competitors.
Solana is one of the few crypto projects whose token since the launch of the network has been distributed in a larger volume among the members of the Solana community.
The Solana Project Creation History
The Solana project was born in 2017, when Anatoly Yakovenko, a former engineer at US fintech giant Qualcomm, published the technical documentation for the basic Solana Coin algorithm. In the process, Anatoly Yakovenko discovered that thanks to the Bitcoin hash function SHA-256, it is possible to make a decentralized clock that will attach a timestamp to the blocks of the chain. That is, it is possible to track the sequence of attaching elements and the timing of the operation. This approach makes it possible to maintain a high speed of operations while scaling the system without sacrificing decentralization.
Together with his colleagues Greg Fitzgerald and Stephen Akridge, in 2018, Anatoly Yakovenko created a prototype of the Solana test network, thus laying the foundation of Solana Labs. Raj Gokal later joined the team and now has the role of executive director. Solana Labs is based in San Francisco, California. The cryptocurrency was named after an ocean beach in California that is near San Diego, where Anatoly Yakovenko lives.
In June 2020, the Solana Foundation, a nonprofit organization based in Switzerland, was created to facilitate the development of the Solana network, working on comprehensive technical and economic support for the project. Among other things, the organization’s tasks include research, including outsourced research, outreach, and education. The Solana Foundation received 167 million SOL coins from Solana Labs for this purpose.
Features of Solana’s Project and Its Role in the Crypto Market
Today, Solana’s ecosystem has a stable blockchain platform and holds great promise for the entire crypto market by offering a versatile and innovative transaction processing solution that will be many times faster than traditional payment systems such as Visa at lower transaction fees. Among other things, the acceleration of synchronization between nodes in Solana’s blockchain makes it fast enough to compete with complex centralized systems. These and many other advantages make Solana blockchain a valuable tool for creating scalable decentralized applications and payment protocols today.
The Solana ecosystem has evolved so thoroughly that it has become the epicenter of the concentration of an incredibly long list of crypto projects of various orientations and practical applications. The Solana community is comprised of tens of thousands of investors and developers, who collectively form a platform that is among the most promising and enables it to solve the trilemma problem by combining decentralization, scalability, and network security.
1. Proof of History (PoH)
A Proof of History (PoH) is a sequence of computations that can cryptographically prove that some amount of time has elapsed between two events. To do this, a cryptographically protected function is used (Verified Delay Function, CFF).
2. Turbine
Turbine is a protocol for streaming blocks between validators that divides data into smaller pieces, making it easier to transmit between nodes, regardless of Solana consensus. Turbine helps the Solana distribution registry address bandwidth issues and improve the overall transaction processing speed of the network.
3. Tower BFT
Tower BFT is Solana’s implementation of pBFT (Practical Byzantine Fault Tolerance), optimized for PoH. It is a consensus algorithm that takes advantage of the cryptographic clock, achieving consensus without going through many messages between nodes – hence improving transaction speed.
4. Gulf Stream
Gulf Stream is the protocol responsible for caching and sending transactions to the network. This protocol allows the Solana network to process transactions at 50,000 TPS. This, in turn, enables network validators to execute transactions faster, dramatically reducing validation time and memory requirements for validators from unvalidated transaction pools.
5. Sealevel
A transaction processing engine designed to scale between GPUs and SSDs. Unlike other blockchains running in single threads, Solana supports the parallel execution of transactions in a single segment.
6. Pipelining
Pipeline processing is a common procedure used when designing CPUs (central processing units). It is applied to the process of assigning a stream of input data to other hardware for processing. It allows fast replication and verification of transaction information in network nodes.
7. Archivers
A network of nodes that store data instead of validators. Archivists do not participate in the consensus and may sometimes be required to prove that the data is stored correctly. This system, called replication proof, is primarily based on Filecoin (FIL).
8. Cloudbreak
This component is a kind of data structure necessary for scalability and network throughput. It organizes a database of accounts, allowing simultaneous reading and writing between 32 network threads.
Conclusion
Solana network, being one of the most ambitious crypto projects, has managed to gain massive popularity due to innovative developments in blockchain and has become a popular object for investment, but also has become a powerful tool that offers a wide range of opportunities for creating and developing scalable decentralized applications that will help solve all kinds of problems of the crypto industry, which are stumbling blocks to the full integration of crypto technologies into the economic system.
