Solana is a high-performance Cryptocurrency blockchain that supports smart contracts and decentralized applications. It uses a special PoS consensus mechanism, called Proof-of-History, with time-stamped transactions to maximize efficiency.
This allows Solana to process close to 50,000 transactions per second (compared to 7 TPS for Bitcoin and 16 TPS for Ethereum). Unlike other similar projects such as Polkadot and Ethereum 2.0, Solana is a single blockchain (layer 1) and does not delegate operations to other attached chains (layer 2).
How does Solana work?
Solana is the highest-performing blockchain in the world. Achieving this requires the implementation of several optimizations and new technologies:
Proof-of-History (PoH): a mechanism that improves the speed of consensus
Tower BFT: an optimized version of PBFT’s PoH
Turbine — a block propagation protocol based on BitTorrent technology (albeit with many technical differences)
Gulf Stream: transaction forwarding protocol without Mempool
Sealevel — Parallel Smart Contract Runtime
Pipelining: a transaction processing unit for validation optimization
Cloudbreak: horizontally scaled account database
Replicators — Distributed Ledger Warehouse
Proof-of-History (PoH)
The Proof-of-History (PoH) mechanism improves the efficiency of the PoS consensus mechanism.
A new block in Solana is generated every 400 ms (compared to about 15 seconds for Ethereum and 10 minutes for Bitcoin) and, as you can guess, it is very important to establish the chronological order of each block. This produces a kind of “clock tick” in which each clock tick is 400 ms (instead of one second like a normal clock).
Solana uses a PoS not a DPoS consensus mechanism, as discussed many times. It’s an easy mistake to make because there are multiple roles on the Solana blockchain (leaders, validators, archivers, etc.). While DPoS cryptocurrencies essentially delegate these roles among network participants, Solana does not. Simply, all the nodes in Solana play a role in fulfilling all the roles of the network.
For example, Solana’s leaders are tasked with producing new blocks. The leaders rotate every four blocks (1.6 seconds). As long as a node occupies the Leader position, it basically puts all the transactions it can into the four blocks it is producing and shows these blocks containing the transactions to the relevant node groups, called Solana Clusters. These nodes validate transactions using digital timestamps as a reference and then quickly pass the records to other relevant nodes on the network.
SOL Token
SOL is a cryptocurrency native to the Solana blockchain. It is used to pay the tariffs in the Solana network. SOL can also be staked to become a blockchain node. In the future, SOL will be used to vote on changes to Solana.
Solana Token ICO
Solana has had 5 rounds of funding in total, raising over $ 25 million in funding in these five rounds. Additionally, it provided a price buyback guarantee of just under 20 cents to those who signed up and staked their tokens for the first 3 months after the March ICO.
The first round of private financing took place in March 2018 and it sold just under 80 million SOLs for $ 3.17 million ($ 0.040 per SOL)
The second round of private financing took place in June 2018 and in it, just over 63 million SOL were sold for 12.63 million USD (0.20 $ USD per SOL)
The third round of private financing took place in July 2019 and in it, just over 25 million SOLs were sold for 2.13 million USD (0.22 USD per SOL)
The latest round of private financing took place in February this year and saw just over 9 million SOLs sold for $ 2.29 million ($ 0.25 per SOL).
Solana’s ICO took place in March 2020 via CoinList. It sold 8 million SOLs for $ 1.76 million ($ 0.22 per SOL). This is only 1.6% of Solana’s total supply.
The SOL cryptocurrency has a total supply of 500 million. Of this total supply, 36.2% (approximately 160 million SOL) was sold to private investors in the four mentioned sales. 12.8 percent (approximately 65 million SOL) has been allocated to the Solana team.
10.4% (approximately 52 million SOL) has been allocated to the Solana Foundation, a non-profit institution that focuses on blockchain education and adoption. The remaining 39% (approximately 195 million SOLs) has been allocated to the Solana community (validator node rewards).
In the realm of cryptocurrency, your wallet address is akin to your public facing username. Information from https://www.cryptotimes.io/2024/03/22/crypto-wallet-address/ says that it acts as your unique identifier on the blockchain network, allowing others to send you crypto funds. Just like a username for an online account, your wallet address is public information. Anyone can see it and use it to send you cryptocurrency.
However, that address alone isn't enough to pilfer your hard-earned crypto. The real safeguard lies in your private keys, which are like the super secure password to your crypto holdings. These private keys are typically generated by your crypto wallet and should be kept confidential at all costs. They act as the authorization key, allowing you to spend or transfer the crypto associated with your wallet address.