Altcoins

From Proof-of-History to groundbreaking NFT sales, Solana coin has made waves for good reason. Find out why it's termed the Ethereum killer!

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There’s a tendency for each cryptocurrency to be unique in a rather crowded market. The likes of Bitcoin can remain in the spotlight for a long time simply because they’re the “icebreakers,” but it doesn’t mean there can’t be any breakthroughs.

That is precisely how Solana becomes an instant pick for investors due to its project potential, as well as its incredible price momentum. If you’ve stumbled on the Solana coin and are wondering if it’s a good digital asset to invest in, we’re going to dive deeper into how Solana works and what it promises.

Solana is a highly functional open-source web-scale blockchain with a permissionless nature to provide

) solutions. Solana is the first blockchain to develop a decentralized clock by adding time stamps to the verification process of transactions. By doing so, Solana solves scalability issues and provides one of the most efficient blockchains in the cryptocurrency market. Its native cryptocurrency is the Solana coin (SOL), which can be used to interact with 

. Coming from an extensive tech background, Yakovenko originated this project with a core team including Greg Fitzgerald, Stephen Akridge and three others, leading to Solana Labs’ birth.

 was released to the public in 2017. There were five rounds of initial coin offerings (ICO) held, helping Solana accumulate over $25 million to launch and release the

 across the major cryptocurrency exchanges.

One way the Solana Foundation focuses on making DeFi accessible on a larger scale is by using the

 (PoS) consensus mechanism. This means that the mining rate depends on the number of staked coins  a node holds. The staking process requires that some of your coins be locked for a certain period of time. The network uses these locked coins to improve itself. After the staking period is over, you receive additional coins as interest, depending on the original number of coins you staked.

, users can launch their own projects with Solana. These projects can be

 (DApps) or DeFi platforms. Such projects need to be created in the programming language called 

The PoH computational sequence creates a historical record proving that an event has occurred at a specific moment in time. It requires a set of sequential steps to evaluate and eventually produce a unique output that can be verified publicly.

 (PoW) or PoS consensus, PoH is not a consensus mechanism but rather a system that enables the verification of transactions through time stamps. Each block of transactions is verified every 400 milliseconds, which is a tick of the decentralized clock of Solana. The time stamps in Solana are possible because of the

, in which the output of a transaction is reused as an input for the next hash.

On the Bitcoin network, BTC miners with different local times have to constantly look for a valid time stamp for mining a block, hence resulting in errors and false time stamps. The PoH system creates a vastly expanded capacity for validating transactions.

PoH introduces a chain of organized hashes for validators to process. Using the latest hashed state of a transaction can significantly reduce the time to validate a block. Hence, a node can verify as many transactions as possible in 1.6 seconds (a total of 4 blocks). Then, the node responsible for mining switches roles with another node. During the verification process, the node responsible for mining is considered the leader node.

Solana distinguishes itself through a series of eight technical innovations. While proof of history stands out, these seven other innovations (below) make the Solana network possible.

Tower BFT is basically a slightly updated version of practical 

 (pBFT). While pBFT allows nodes in the network to vote on major decisions, Tower BFT obviates the need for nodes to cast their votes for every single transaction. However, they can automatically leave a previous vote to serve for every subsequent transaction and proposal. This helps the network save time.

 are where all transactions are added until they’re verified by nodes. Solana uses a slightly different approach to mempools. Using a system known as Gulf Stream, the nodes that aren’t leaders can start verifying some of the transactions in the mempool so that it doesn’t become overcrowded. As a result, a lot of time is saved in the network here as well.

The functionality of smart contracts in the Solana network is slightly different from that of other rising cryptocurrencies, in which smart contracts may interfere with one another since they can’t operate in parallel.

Solana uses Sealevel, a system that allows smart contracts to run side by side without causing any disruptions. This gives Solana the upper hand in terms of performance levels in the network. Having Sealevel is like being able to create numerous extra lanes on a superhighway.

Yet another feature introduced by Solana, Turbine is responsible for breaking down transactions into smaller parts. This helps nodes to receive information more quickly while at the same time using less bandwidth. This is yet another reason why Solana is one of the best rising cryptocurrencies in terms of time efficiency.

Using its Cloudbreak feature, the Solana system can access and interpret data simultaneously, using older versions as a backup.

Pipelining is a hardware structure in Solana that’s responsible for directing transaction information toward designated hardware. This streamlines the block validation process.

Also a hardware structure, Archivers works with Pipelining, helping leader nodes access network-based information at quicker rates.

As the native token of the Solana network, SOL uses the 

 and is used as a utility token. For example, SOL can be used to make transfers and interact with smart contracts.

It isn’t certain whether or not there will be any maximum supply of SOL coins. SOL networks use burning of tokens as a deflationary policy. By holding SOL tokens, a user can be a part of the network validator. While SOL may be experiencing a slow burn at its initial stage, it has become one of the top cryptocurrencies in terms of 

After Solana’s public ICO in March of 2020, SOL was released to the public the next month. Its starting price was trading at around $0.70 on April 11, 2020. The value of SOL dropped to around $0.50 by May, and then by the end of August rose as high as $4.70, which marked Solana’s first bullish run. By December, the price had dropped again to around $1.50. 

At the start of 2021, the price of SOL was around $1.80. Then, following the bullish trend in the cryptocurrency market, the price of SOL rose at faster rates, reaching around $17 by February 2021. The price kept increasing, recently reaching its all-time high at $214.96. As of now (the publishing date), the price of SOL coin has retraced and is currently trading at around $147.

 of around 296 million out of a hard cap of 500 million, and SOL trading over $147 as of September 17, 2021, the market cap of Solana stands at almost $43 billion, making it number 7 in the cryptocurrency market.

Currently, Solana is involved in numerous projects, three of the biggest built on its blockchain being Serum, Raydium and Solanart. 

 is a DeFi project that has been constantly growing and aims to correct many of the flaws in decentralized exchanges (DEXs). From offering full ETH and SOL integration for lightning-fast transactions to featuring a decentralized, automated full limit order book that grants traders full control, it’s safe to say Serum has plenty of potential to become the best 

 yet. Currently, the Serum utility token (SRM) is ranked as the 132nd-largest cryptocurrency, based on its $500 million market cap. While it’s still a small-cap cryptocurrency, this is one DeFi project you’ll want to keep an eye on.

Worried about problems like scalability and transaction speeds? That’s where 

 comes in. As an automated market maker built on the Solana blockchain, Raydium guarantees efficient transactions with its cheaper gas fees and quicker speeds. Additionally, Raydium offers liquidity across its entire ecosystem through a central order book, letting traders gain access to the order flow of the Solana ecosystem. The RAY token is the 107th-largest cryptocurrency, and sits at a market cap shy of $1 billion.

As one of the biggest reasons for the recent surge in SOL’s price, 

 has understandably caused plenty of buzz. The first non-fungible token (NFT) marketplace on Solana, it provides an alternative for artists and traders who’ve decided to ditch the costly and congested Ethereum NFT marketplace in favor of Solanart’s affordable gas fees and smooth transactions. In August, the 

 NFT collection was launched — and sold out within eight minutes. This showcases the Solana network’s reliability, as there were zero congestion issues during the NFT auction.

Solana is also involved with the German company 

. This is important to know because some of the staked SOL in the network are used to develop this data center.

Also, Solana is expanding even more in the DeFi field. It has started to interoperate with Ethereum through projects such as 

. This can only have positive implications for Solana’s future.

In terms of the SOL token and its price, most predictions forecast a long-term increase, suggesting that this investment might be profitable.

According to CoinDesk, Solana may receive five additional fundings worth around

. Since Solana’s successful ICOs were able to compile around $25 million, an additional $100 million could ostensibly improve Solana even more. These funds are planned to be allocated in the development of Solana in the Asia-Pacific region, as well as helping the growth of projects within the Solana network. If all goes well, Solana’s prosperity may be inevitable. 

, challenging Ethereum’s to be the next “to go for decentralized applications, DApps. [

: In June 2021, Solana Labs raised over $300 million in a 

Solana could potentially become the best network in the rising cryptocurrency market in terms of scalability and time efficiency. Only time will tell if other cryptocurrencies may apply features such as PoH similarly to Solana. 

The projects already involved with Solana are also predicted to become larger, increasing the scalability of the Solana ecosystem. As more projects are added to the Solana network, more SOL tokens are needed for transactions within the network. The demand for more SOL tokens could lead to a surge in SOL prices in the near future. [

Solana coin (SOL) has become a must-have investment for most cryptocurrency traders and investors. Moreover, people who want to mine coins find Solana lucrative due to its speedy verification systems. Solana has distinguished itself from most of the other top rising cryptocurrencies by providing better, faster and simpler service.

The nature of cryptocurrencies is still uncertain, and no one can precisely predict the future of this emerging technology. It’s best to seek financial investment advice before diving in. However, SOL, is one of those cryptocurrencies whose future looks quite promising in a congested market.

Solana Coin (SOL) and the Battle for Layer 1 Supremacy

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