Solana is a blockchain considered to be the main rival of Ethereum. It is the first blockchain to adopt the “proof-of-history” (PoH) validation system, which allows for faster transaction processing and lower fees. Find out everything you need to know about this Google Cloud-backed blockchain and its cryptocurrency token SOL.
In Southern California, in San Diego County, it is the small coastal town of Solana Beach. Inspired by this slice of heaven, developer Anatoly Yakovenko started building his Solana blockchain in 2017 and launched it in March 2020.
The previous Qualcomm framework designed this blockchain to work similar to Ethereum, but with improvements. This innovative blockchain quickly became popular and grew top 10 cryptocurrencies.
What is Solana?
Solana is an open source project highly functional by implementing a new high-speed, permissionless layer 1 blockchain. Its goal is to offer higher throughput than other popular blockchains while keeping costs as low as possible.
Its innovative hybrid consensus model combines a PoH (proof-of-history) algorithm. unique and extremely fast sync engine based on proof-of-stake (PoS). This is what enables the Solana network to process more than 710,000 transactions per second without the need for a scaling solution.
Solana’s third generation blockchain architecture is designed for facilitate the creation of “smart contracts” and decentralized application (DApp). This project supports a wide range of decentralized finance (DeFi) platforms and NFT markets.
Funded for the “boom” of ICOs (Initial Coin Offerings) since 2017, the blockchain has then been tested through multiple phases before the official launch of the mainnet in 2020.
What makes Solana unique?
According to Vitalik Buterin, the creator of Ethereum, one of the main problems with blockchains is the “trilemma”. This is a set of three hurdles developers face when building blockchains: decentralization, security, and scalability.
In general, blockchains are designed in a way that forces developers to do this sacrifice one of these aspects in favor of the other two. They can only provide two of these three benefits.
Scalability increases with the number of transactions per second that can be supported, but decentralization slows down blockchains due to the number of nodes required to verify transactions.
For its part, the Solana blockchain delivers a hybrid consensus mechanism. The trade-off is made on decentralization, to maximize speed. This innovative combination of PoS and PoH makes the Solana project unique in the blockchain industry.
The drawing of Solana solves the trilemma problem choosing a leader node based on the PoS mechanism, in order to sequence messages. The network reduces the workload and thus allows for an increase in throughput without a centralized source.
Also, a transaction chain is created by hashing the result of one transaction and using it as input for the next transaction. This Transaction history is what gives Solana’s main consensus mechanism its name: PoH. This concept allows for better protocol extensibility.
How does Solana work?
The main component of the Solana protocol is proof of history : A sequence of calculations that provides a digital record to confirm that an event has occurred on the network.
It can be represented as a cryptographic watch, providing a timestamp for every transaction on the network. This timestamp is accompanied by a data structure.
PoH is based on the use of PoS the BFT Tower algorithm : An optimized version of the practical Byzantine fault-tolerance protocol. Solana uses this algorithm to reach consensus. The BFT Tower maintains the security and operation of the network and serves as an additional tool to validate transactions.
PoH can also be considered as uVerifiable Delay Function (VDF) high frequency to produce reliable and unique results. This feature maintains order on the network by demonstrating that the block producers have waited long enough for the network to continue the process.
L’256-bit SHA-256 hash algorithm is used by Solana and includes a number of proprietary cryptographic functions. The network then provides real-time data according to the set of hashes included in the central processing units.
The Solana Validators use this hash sequence to save a specific piece of data, created before the specific hash index was generated. The timestamp for transactions is created after inserting this data snippet.
In order to minimize block creation time and to achieve a high number of transactions per second, all network nodes must have cryptographic clocks to track events rather than waiting for other validators to verify the transactions.
Before Solana, Yakovenko worked the design of distributed systems, within large companies such as Qualcomm. This experience allowed him to understand the importance of a reliable timestamp to simplify network synchronization.
The expert understood this right away the use of Proof-of-History (PoH) it would speed up the blockchain relative to clockless ones like Bitcoin and Ethereum. These systems cannot scale beyond 15 transactions per second globally, although a centralized system like Visa can reach 65,000 TPS.
After starting with a private implementation of the C code base, Yakovenko followed the advice of his former Qualcomm colleague Greg Fitzgerald and migrated the code base to the Rust language.
In February 2018, Fitzgerald began prototyping of the first open source implementation of Yakovenko’s white paper and was responsible for the first release of the project. You demonstrated that 10,000 signed transactions could be verified and processed in half a second.
Soon after, Stephen Akridge, another Qualcomm colleaguedemonstrated that this throughput could be significantly improved by delegating signature verification to graphics cards.
Yakovenko recruited Fitzgerald and Akridge and three others for co-founder of the Loom company. To avoid confusion with an Ethereum-based project of the same name, the project was later renamed Solana in reference to their hometown when they worked at Qualcomm.
In June 2018, the project expanded to run on cloud-based networks. A month later, the company released a 50-node public testnet capable of supporting 250,000 transactions per second. Four years later, in late 2022, Solana stood trial more than 100 billion transactions at an average cost of $0.00025 per transaction.
The Solana Token (SOL).
the total number of Solana tokens they can reach 511 million, but today about half of them are in circulation. Almost 60% of SOL tokens are controlled by the Solana founders and the Solana Foundation and only 38% are reserved for the community.
SOL tokens are available for purchase on most exchanges. The main platforms used for trading this cryptocurrency are Binance, Coinbase, KuCoin and Huobi.
Solana versus Ethereum
Solana often receives praise for her speed and performance. He is also regarded as a legitimate rival for leaders industry like Ethereum.
In terms of processing speed, Solana can challenge Ethereum with an estimated maximum speed of over 50,000 transactions per second. The different consensus algorithms used allow for faster confirmation of transactions and this feature makes Solana one of the fastest blockchains.
Compared, The older Ethereum proof-of-work model it could only support 15 transactions per second. Solana is therefore several thousand times faster, and also has the advantage of a reduced cost due to the implementation of new “tokenomics” at a lower cost.
Also note that the Solana blockchain is fine more ecological and sustainable compared to other PoS blockchains. This is a strong point against Ethereum whose PoW model required phenomenal computing power.
However, after The Merge, Ethereum now uses PoS. L’Ethereum 2.0 can therefore compete with Solana in terms of productivity, scalability, energy consumption and transaction costs.
Google Cloud partner of Solana
In November 2022, Google Cloud announced it was working on several projects related to the Solana ecosystem. The public cloud provider is now solana blockchain validatorin order to support this network.
Additionally, Solana will now be powered by Google Cloud’s new Blockchain Node Engine service – a fully managed node hosting service designed for Web3 business.
The DevOps teams need not worry anymore the availability of the blockchain infrastructure and it will no longer be necessary to monitor the system and troubleshoot in case of an outage. Google Cloud takes care of monitoring the nodes and restarting them if necessary in the event of an outage. Solana’s rival, Ethereum, will instead be the first blockchain supported by this service.
Additionally, Google Cloud announces that its big data analytics service, BigQuery, will be compatible with Solana from 2023. Historical data will be indexed, to allow developers of the Solana ecosystem to access it.
Like all other blockchains and cryptocurrencies, Solana also has disadvantages. While this blockchain can compete with more famous projects, it is vulnerable to centralization since there are not many block validators.
Anyone on the net can become a Solana validator, but this one requires significant resources computer. Furthermore, the protocol is still presented as a beta version of the mainnet. So there may be bugs and errors.
Despite these shortcomings, Solana remains a major ecosystem of the cryptocurrency world and appears to have a bright future. Its token launched in March 2020 quickly became one of the top 10 cryptocurrencies by capitalization.
On August 2, 2022, the Solana ecosystem has been violated. Experts suspect that a private key has been compromised, allowing hackers to steal Solana (SOL) tokens from Slope, Phantom and TrustWallet. Victims reported that their funds were directly drained from their crypto wallets.
The Solana Foundation’s official Solana Status Twitter account commented on the incident, stating that ” the affected addresses were created, imported or used on Slope mobile wallet applications. This exploit was isolated in a portfolio on Solana e the hardware wallets used by Slope stay safe “.
On the contrary, the details of how this incident occurred remain shrouded in mystery. The foundation specifies that the information was inadvertently transmitted to an application monitoring service. Estimates vary, but it is believed that nearly $6 million in assets have been stolen.