What is Solana, crypto’s skyrocketing altcoin?

It’s dubbed the Netflix of crypto and is poised to steal Ethereum’s limelight. Here’s everything you need to know about this rapidly rising coin.

What is Solana?

Founded by Anatoly Yakovenko in 2019, Solana is a blockchain that’s open-source and decentralised. The native currency is Solana’s cryptocoin, SOL.

Is it like Bitcoin and Ethereum?

Sort of. It is an open-source and decentralised blockchain, like Bitcoin and Ethereum, but Solana is a new-generation alt-coin and offers a lot of features that Bitcoin doesn’t, such as allowing people to make Decentralised Applications (DApps), NFTs and more.

Ether (as in Ethereum’s blockchain) does the same, which is why it has been predicted to potentially overtake Bitcoin. But Solana can claim (thanks to the blockchain it has set up) that their software is more user-friendly to produce and use, plus everything is very scalable and quicker compared to Ether.

These functions are why it’s being compared to Netflix”. Also, it works using something called Proof of History (PoH), as opposed to Proof of Stake (PoS) like Ether 2.0, or Proof of Work (PoW) like Bitcoin uses and Ether used to use.

Proof of History? What’s that? And why does it matter?

I’m glad you asked. Proof of History is the latest way for computers to create blocks that form a blockchain. With Bitcoin, there’s a Proof of Work system in place, where nodes (computers, basically) compete to solve the crypto puzzle first, therefore proving they’ve done X amount of work before they can add a block to the chain.

Proof of Stake chooses the node randomly, but with a bias to whoever has the biggest stake, meaning not everyone is expending energy to try and win the race (this saves loads of energy). Both of these rely on a lot of communication between computers, which is time consuming. Proof of History (PoH) doesn’t. It just uses a series of timestamps so that everyone knows what’s happening.

That lack of time between computers means improved speed. Solana can create a block in around 400 milliseconds. Ethereum takes around 10 seconds and Bitcoin around 10 minutes.

Solana once hit 400,000 transactions per second before it started having issues and the network has since improved. Before Ethereum 2.0, Ethereum was on 30 transactions per second, but it now has the potential to do 100,000, while Bitcoin does around seven. Solana now is even quicker than Visa where transactions per second are concerned. Visa can complete around 24,000 transactions per second. In conclusion, Solana has legs, it’s very fast and can handle a lot of volume.

Right. And the speed is important because?

Scalability, baby. If a coin is going to be mainstream and worldwide, it needs to be accessible, quick and robust. Solana seems to tick all of the boxes, especially in relation to current big players like Bitcoin and Etherum. This is a big part of why the value has rocketed recently.

How much has it gone up?

A year ago, one Solana (SOL) was £1.70. At the time of writing it’s worth £104. So had you bought 10 coins back then, you’d have spent £17 but would currently have £1,040. Quite the increase, don’t you think? It’s also the fifth most valuable cryptocoin out there at the time of writing.

Woah. Does this mean it’ll stop going up?

Absolutely not. If you compare the current value to Bitcoin (£42,001) or even Ethereum (£2,531), it’s still considerably less. Plus, less people know about it, so there’s plenty of room for it to increase. This doesn’t mean it will increase, of course. In just 24 hours between 11th October and 12th October, it went down six per cent, for instance. There’s never a guarantee.

Also, while it’s pretty inexpensive, you can’t guarantee profit.

OK, where can I buy it?

After you make sure you can afford to and are certain you want to buy Solana, it’s pretty widely available. You’ll find it across Coinbase, Binance and many other places.

This article contains reportage, not financial advice. Always do your own research before investing. Cryptocurrencies are a volatile and high-risk asset. As with all investments, you should never invest money that you can’t afford to potentially lose.

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