Solana has been gaining popularity since its launch back in 2019, outpacing the Bitcoin, Ethereum, Libra and other blockchain networks. It’s token is steadily among the top 10 largest cryptocurrencies. Let’s dive into the origin story of Solana to see how it became so big.
What is Solana?
Solana is a public, open-source blockchain that supports smart contracts, NFTs and a variety of decentralized applications. Solana is often called the world’s first web-scale blockchain, as it was designed for scalability.
The native token of Solana’s blockchain is SOL — it provides network security through staking, and it’s also a means of transferring value. Among other popular Solana-based tokens are Tether, Chainlink and Terra Classic.
Why was it created?
Solana was created in 2017 by Anatoly Yakovenko (Solana Lab’s CEO) and Raj Gokal (Chief Operations Officer). As Yakovenko had a background in system design, he wanted to apply his knowledge toward a brand new blockchain that enabled faster processing speeds for lower costs. So appeared Solana.
- Solana’s theoretical throughput is 65,000 transactions a second with near zero fees.
- Its core innovation — Proof of History, a cryptographic proof of the relative order and time in the historical record.
- The recent boom in the DeFi and NFT has pushed fees on Ethereum, so more and more crypto users are turning to Solana.
- Most of the Solana-based coins are related to dApps, such as Audius, MAPS and a popular NFT game STEPN.
- Solana is better for the environment, as it requires less computing power and electricity for minting than Ethereum.
Growing in popularity
Both Solana blockchain and token are becoming increasingly popular, especially now, when developers and investors are looking for more cost-effective possibilities.
As of today, there are over 350 decentralized projects on the Solana blockchain. Ethereum is far more widespread with its 2,700 dApps, but Solana has faster speeds and lower transaction costs.
Yes, Solana can theoretically process as many as 65,000 TPS, and its average cost per transaction is $0.00025. In contrast, Ethereum can only handle less than 15 TPS, while average transaction fees are around $1.68.
What’s about the token? SOL started trading at less than $1 per coin in 2019. Since then, its price has risen remarkably fast — to above $250 before the 2022 cryptocrash. Now it’s traded at nearly $30, and successfully passing its second terrific bear market. It’s ranked #9 by market capitalization according to Coinmarketcap, showing investors’ trust and good changes to surge again.
What are the flaws?
The main dispute over Solana is the question of its decentralization. Some opponents of the blockchain argue that a number of its aspects result in a centralized system. Roughly half of the token supply is owned by venture capitalist firms and other insiders, but this allows faster transactions and scalability.
While some see this as counter to the philosophy of a decentralized network, others view the third-parties involvement as a necessary evil to fund blockchain adoption.
Is Solana a good investment?
That’s a standard question only you can answer, but Solana is a totally great network that surpasses many of its rivals. The Solana blockchain is highly efficient and very stable, and it offers low transaction fees for users.
If talking about SOL, the coin has the potential of a good long-term investment. SOL is currently trading closer to its lows, potentially making it a good deal.