In practice, once you have a wallet that can hold SOL and Solana-based tokens, such as Phantom or Sollet, you can interact with the numerous apps there. Solana has a larger theoretical throughput - meaning it can handle more transactions per second than Ethereum - so the fees are currently extremely low, typically costing 0.000005 SOL, or about $0.001. There are a lot more apps on Ethereum, so why switch?Įthereum has long been plagued by high fees for transactions, which sometimes skyrocket into hundreds or even thousands of dollars, especially at times of high network congestion. Why is it better than other cryptocurrencies and blockchains?Īll of the above sounds a lot like Ethereum, and indeed, Solana is most easily described as an advanced Ethereum competitor. Check out some of the apps that are available on Solana here. But there are also apps that let you buy and sell NFTs or even find a dating partner. Most of those are tied to finance, such as platforms that let you lend or borrow money, trade crypto, or invest in various assets. But Solana's biggest competitor is Ethereum, which still relies on PoW – though it's in the process of switching to PoS.įor a technical overview of how Solana works, check out the video above or the documents on Solana's website.įrom the end user's perspective, Solana is a place where you can use SOL to interact with various decentralized apps. Most modern blockchains use some form of PoS. This and other innovations, Solana claims, make it more secure and perform better than other blockchains. In PoS systems, this isn't as easy to achieve, so Solana also uses a technology called Proof of History, which it claims helps the network more efficiently determine the time of transactions. It's worth noting that on Solana, end users don't have to run a validator node to earn rewards they can delegate their stake to a validator who will pass the rewards on to them for a fee.īitcoin's PoW mechanism also functions as a sort of clock for the network, making sure all nodes on the network can agree on the correct order of transactions. And while validators on the Solana network also consume power to operate, their power usage is far lower than that of, say, Bitcoin miners.īoth PoW and PoS mechanisms reward validators or miners for their efforts Bitcoin miners get BTC, and on Solana, validators are rewarded in SOL. That's proof of work it's effective but the network can end up consuming a lot of electricity.Īnother way to do this is to make the validator nodes on the network have something at stake in Solana's case, they need to stake SOL tokens. You can thwart that by making computers running the network work hard by solving a math puzzle, which in turns makes it costly to attack the network. A bad actor might want to add a bunch of nodes in order to take control of the network. What's so great about PoS? In a decentralized blockchain system, a lot of computers (nodes) validate transactions. Its native cryptocurrency is also called Solana and has the ticker SOL. It is a PoS (proof of stake) blockchain, which makes it more environmentally friendly than PoW (proof of work) blockchains such as Bitcoin. Solana rivals Ethereum, which is currently the largest decentralized apps platform, by promising faster operation and lower transaction fees. It's an open-source project maintained by the Geneva-based Solana Foundation, and built by developers at San Francisco-based Solana Labs. Solana is a blockchain platform for decentralized apps. So what is Solana? And is its outstanding rise in price warranted? Read on. Its price rose from roughly $1.50 in January 2021 to more than $208 at writing time, making it the sixth largest cryptocurrency in the world with a market cap of $61 billion. Solana, a cryptocurrency that launched to relatively little fanfare in April 2020, has recently been on a tear.
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