What Is SOL (Solana)?

Solana (SOL), established in 2017, is a blockchain platform created for decentralized and scalable applications. It is managed by the Solana Foundation in Geneva and developed by Solana Labs in San Francisco.

Solana processes transactions quicker and with lower fees compared to other blockchains such as Ethereum. The cryptocurrency on the Solana network, also called Solana (SOL), surged by nearly 12,000% in 2021 and reached a market cap exceeding $75 billion, positioning it as one of the top cryptocurrencies during that period.

Even though it was widely used, SOL was affected by the cryptocurrency crash in 2022. By December 29, 2022, SOL’s market capitalization had fallen to around $3.63 billion. A year later, it had regained almost half of its lost market value.

Technology

Solana’s architecture utilizes algorithms to eliminate performance issues from blockchain software, resulting in scalability, security, and decentralization. It can handle up to 710,000 transactions per second on a standard gigabit network and up to 28.4 million transactions per second on a 40 gigabit network.

Solana’s blockchain uses proof-of-history (PoH) and proof-of-stake (PoS) to validate transactions. Validators in PoS verify transactions based on their coin or token holdings, while PoH timestamps and verifies transactions rapidly.

Why Solana Might Be Better Than Ethereum?

  • Performance: Solana’s ability to handle a high number of transactions per second with low fees makes it more suitable for high-frequency and large-scale applications.
  • Cost-Effectiveness: For developers and users looking for affordable transaction costs, Solana provides a more cost-effective solution.
  • Innovative Consensus: Solana‚Äôs Proof of History combined with Proof of Stake is an innovative approach that enhances speed without sacrificing security.

Conclusion

Solana is a blockchain that competes with Ethereum in terms of purpose, use cases, and capabilities. It is widely used and its token, SOL, holds a significant portion of the cryptocurrency market.