Solana is a blockchain network with a focus on high performance and rapid transactions. To boost speed, it employs a one-of-a-kind approach to transaction sequencing. Users can use SOL, the network’s native cryptocurrency, to cover transaction costs and engage with smart contracts.
What is Solana?
Scalability is one of the most difficult aspects of blockchain technology to overcome. As these networks expand, they frequently encounter transaction speed and confirmation time constraints. Solana attempts to address these issues while maintaining security and decentralization.
The Solana blockchain, founded in 2017 by Anatoly Yakovenko of Solana Labs, uses a novel verification method. Scalability and speed difficulties plague Bitcoin, Ethereum, and a slew of other projects. However, the Solana blockchain can overcome this and handle thousands of transactions per second thanks to Proof-of-History (PoH) technology.
Value Model of Solana
Solana is a third-generation, Proof-of-Stake blockchain. It has developed Proof-of-History, a novel method of establishing a trustless system for identifying the timing of a transaction.
For cryptocurrencies, keeping track of transaction sequence is critical. Solana’s Proof-of-History strategy understands this and employs a unique technique to overcome the scalability and speed challenges that hamper its competitors.
Proof of History
The SHA256 hash algorithm hashes all Solana events and transactions. This function takes an input and generates a one-of-a-kind output that is nearly impossible to predict. Solana takes a transaction’s output and feeds it into the next hash. The hashed output now includes the sequence of the transactions.
This hashing technique results in a long, uninterrupted chain of hashed transactions. This feature creates a clear, verifiable order of transactions that a validator adds to a block without using a traditional timestamp. Validators can simply verify how much time has elapsed because hashing takes a given amount of time to finish.
Validators process and send less information in each block by arranging transactions in a chain of hashes. Moreover, the time it takes to confirm a new block gets considerably reduced when a hashed representation of the most recent state of transactions gets used.
The Solana team has developed eight fundamental technical elements to assist the blockchain in matching a centralized system’s capabilities. The most famous is perhaps Proof-of-History, but there are others as well:
- Archivers: Distributed ledger storage
- Cloudbreak: Horizontally-Scaled Accounts Database
- Gulf Stream: Mempool-less transaction forwarding protocol
- Pipelining: a Transaction Processing Unit for validation optimization
- Sealevel: Parallel smart contracts run-time
- Tower BFT: a PoH-optimized version of Practical Byzantine Fault Tolerance
- Turbine: a block propagation protocol
These elements combine to provide a high-performance network with block speeds of 400 milliseconds and thousands of transactions per second. For the sake of reference, Bitcoin’s block time is about 10 minutes, and Ethereum’s is about 15 seconds.
SOL token holders can participate in the blockchain’s PoS consensus method by staking their tokens. Users can stake their tokens with validators who perform and execute network transactions if they have a suitable crypto wallet.
Those who have staked savings into Solana share some of the rewards with a successful validator. This incentive system encourages validators and delegators to act in the best interests of the network.
Notably, Solana has roughly 900 validators as of May 2021, making it a relatively decentralized network.
The Solana blockchain project was very successful in drawing interests from prominent venture capital firms, which will play a key role in enabling its distribution network. In addition, partnerships, and integrations will help to consolidate its distribution. While the expansion of its commercial use cases will help it scale it further.
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