Solana is a high-performance layer one proof-of-stake blockchain. In order to manage high volume of transactions, it does not require the usage of extra ‘layer 2’ chains or solutions. Anatoly Yakovenko, who has worked at firms such as Qualcomm for many years, founded Solana. He has extensive knowledge with compression algorithms as a result of his former work as a software engineer at Dropbox.
Fastest Layer One Blockchain in the World
Source: coin98.net
To begin with, Solana is fast, really fast. It can process 50 to 65 thousand transactions per second (tps), which is comparable to the speed of Visa. Solana claims they could handle up to 710,000 tps, although they have only reached a peak of 400,000 tps once, in September 2021, when the network briefly crashed. However, Solana’s tps is likewise constrained by existing hardware technologies. Solana’s network is incredibly inexpensive, one hundredth of a cent, which means it will only cost you $1 to send 100,000 transactions on Solana’s blockchain. Furthermore, Solana has a block time of 400 milliseconds, which is considerably faster than Ethereum’s current block time of 10 seconds or Bitcoin’s current block time of 10 minutes. Solana is the fastest layer one blockchain in operation today.
What makes Solana so Fast and Cheap?
Solana’s consensus mechanism. Simply defined, this is a method through which everyone in the network agrees on the transactions within the blockchain. A consensus mechanism is required for every blockchain. Proof-of-work is used by Bitcoin, proof-of-stake is used by Cardano, and Solana has introduced a vital component to its proof-of-stake consensus mechanism known as Proof-of-History. Solana’s consensus mechanism is proof-of-stake with the added variable of time. It adds time to blockchain data and timestamps transactions, thus acting as a decentralized clock.
Solana’s Decentralized Clock
Source: Solana Youtube
One major issue that other blockchains face is that they must agree on a time. In essence, computers must continuously ask themselves “what time is it?” and communicate back and forth until they agree on a time, which must be done before creating a block. This conversation can consume a significant amount of time. Solana solves this problem by having computers timestamp their blocks and utilize cryptographic verification so they don’t have to ‘wait’ for everyone to agree on time. On this decentralized clock, each block is viewed as a ‘tick’ — one every 400 milliseconds.
The same SHA256 hash function used by Bitcoin (hashing is the process of scrambling raw information to the point that it cannot be reproduced back to its original form) was modified to operate as a decentralized clock while maintaining network security and decentralization.
Why is This Important?
Source: Solana Youtube
Although corporations like Google and Intel have been time-stamping data for years using a standard clock in their centralized servers, it’s a completely different ballgame when you wish to do the same on a decentralized network. Solana has constructed a decentralized clock, which has never been done before.
Solana — No Requirements for Being a ‘Validator’
What is the significance of this? Because the barrier to entry for validator nodes (computers) is low, there will be more validators, resulting in a higher number of transactions per second.
To become a validator on Ethereum 2.0, for example, you must deposit at least 32 Ethereum (about $140,000), but there is no obligatory minimum stake in Solana. Furthermore, each validator produces blocks in turn, with each cycle lasting four blocks. The probability of being chosen is proportional to the number of Sol tokens staked. It’s also difficult for a gang of validators to attack or corrupt the network since validators are replaced every 1.6 seconds (four blocks). Furthermore, any attempt to misbehave will result in a decrease in the stake.
Solana Clusters & Efficiency of Transactions
Clusters are a set of validators that specialize in validating specific sorts of transactions; for example, one cluster is responsible for hosting decentralized exchange operations, while others focus on NFTs, games, and so on.
Solana Smart Contracts
Source: solana.com
Solana, like Ethereum, supports smart contracts, which means that developers may utilize it to create new decentralized applications (Dapps). Solana makes use of the Rust programming language. With Solana’s smart contract breakthrough called as ‘Sea Level,’ validators may run smart contracts code in parallel — all at the same time.
Solana’s Future Potential
With over 500 Dapps running on it, Solana’s ecosystem is large and expanding by the minute.
Solana’s DeFi space has over $12 billion in total value locked, while it was just $512 million in June 2021. In addition, some of the notable developments are as follows:
USDC and Tether, the two largest stablecoins by market size, have selected Solana for fast global settlement, with USDC worth $2.1 billion already issued.
Audius, blockchain’s answer to Spotify, with 5 million active users and rapidly increasing, has transitioned to Solana due to its scalability,
Serum, a full, non-custodial spot and derivatives exchange built on an on-chain central limit order book (CLOB) on Solana’s mainnet, has over $80 million in daily turnover and is rapidly increasing.
Because of its scalability, security, and speed, we believe Solana will have a significant market share of the future global blockchain industry.
DISCLAIMER: The information contained in this article is for educational purposes only and does not constitute any form of advice or recommendation by Wheatstones, and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.