Solana has become enormously popular and risen to great heights in a short period of time. We will investigate the fundamental aspects of Solana to find out why that might be.
Solana is a decentralized network that is very fast and scalable. It works with Web 3.0 technology, making it very functional. Further details will follow later. It can also interoperate with the Internet of Things (IoT). Solana uses Proof of History, a concept they invented themselves, which means the transaction speed at the time of writing is around 3,500 per second! That's relatively very fast and it can be even faster. In theory, they can reach around 700,000 transactions per second according to themselves, but yes, in theory we can reach 7 billion unique visitors per day. Talk is cheap, huh? We can say that Solana is a very well thought out concept, so we can only touch on things in this introduction. The Swiss Solana Foundation takes care of protecting the community and technology and making sure that everything goes according to plan.
SOL is Solana's ticker symbol and the network's coin. It has all kinds of features on their blockchain:
Transaction costs. If you perform actions on their network, you will have to pay a small fee to do so. These are about $10 per million transactions, so that can be taken off. By an operation, you should think of sending coins on the Solana network, executing smart contracts or tokenising new NFTs.
Staking. By staking the coin, you can get rewards in the form of interest. You stake these coins at an exchange, for example, with the exchange being the validator you delegate.
Governance. If the Solana network wants to make changes, they will ask coin holders to vote on the future of the network.
Solana has a network layer built for speed, which makes them the top cryptocurrencies. They also have an application layer, with which they mainly compete with Ethereum and Cardano in terms of smart contracts. In doing so, they work with the Low Level Virtual Machine (LLVM). This LLVM allows you to work with Solana if you program in Rust or C/C++. Solana is capable of working with Web 3.0, the decentralized Internet, and with the Internet of Things (IoT).
By using Optimistic Concurrency Control, they simplify network synchronization by writing a preliminary database, checking to make sure everything is correct, and then running the whole thing at once. The age-old blockchain trilemma is excellently addressed by Solana: it involves scalability, decentralization and security. In terms of scalability, you won't easily find a better one than Solana. With so many transactions per second and transaction fees of $10 per million transactions, it's no wonder they are popular with all kinds of people.
Anyone can stake SOL and get rewards, although you will need to have a special wallet. You should think of a hardware wallet or SolFlare, a wallet made to stake SOL. You can also stake SOL through an intermediary, a delegate. These are usually exchanges. Anyone can also vote on the future of Solana through governance, but you will have to be a delegated validator, which requires special hardware and some SOL. In terms of security, they are similar to other blockchains. Blockchains are generally very secure, because of the mutual control in creating new blocks. With Solana, it is not much different. The best block is chosen and they do this by counting votes. The block with the most votes will be considered the final block and will be entered into the public ledger.
Special aspects of Solana:
Tower BFT: This is an advanced version of the Practical Byzantine Fault Tolerance consensus protocol.
Turbine: Because information is split into bits and only then sent through the nodes, this is very fast, saving bandwidth.
Sealevel: With this technique, multiple smart contracts are executed in parallel without slowing down the network.
Archivers: This is a storage system using a Bittorrent-like system. Each archiver gets only a small piece of the whole, because otherwise hard disks would be needed with huge amounts of storage capacity, which would cause centralisation.
Gulf Stream: Transactions are sent to validators even before the current block is complete. This is possible because the leaders of upcoming blocks (the validators who will create the block) are known to Solana.
Pipelining: This is a process where all hardware is constantly put to work, so there is no idle time. For example, when the CPU and GPU have completed their task, they immediately take on a new one, so they are constantly at work.
Cloudbreak: This technique allows archivers and pipeliners to work together and read and write data simultaneously.
There is still a lot to tell about Solana, if you want to delve even deeper you can get a wealth of information on their wonderful website a wealth of information. For now, I assume you have a pretty good idea how this very well thought out and developed coin works.
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Work on this illustrious project began in 2017. Anatoly Yakovenko often sat on Solana Beach in California while working. In addition to working, he also engaged in pondering and musing. Beaches do that to you. He had already worked at Dropbox and Mesosphere and was currently working at Qualcomm. One day at about 4 a.m., after consuming a few pots of coffee, he was back on this beach contemplating Bitcoin and its hash function. And he actually had a very clever idea: Bitcoin's hash function, SHA-256, could create a decentralized clock on a blockchain. Everyone is different, shall we say, Anatoly himself called this a "caffeine-induced fever dream at 4 AM." Apparently, he had been brooding on this for quite some time.
Now, of course, this needs some explanation, for those of you with a bit of a normal mind. Bitcoin uses two timestamps to generate a block, one as a block header and one at the end of a block. If you reduce this to one timestamp based on atomic time and use it to know if a block is valid then you are a lot faster.
The intent of this concept, which Anatoly called Proof of History, is to create a blockchain that is much faster than Bitcoin, much cheaper and much more scalable. Anatoly understood at that moment that he might have something very special on his hands. He began a research project. In November 2017, he wrote a white paper about his Proof of History concept. In it, he explained that if working with an atomic clock instead of timestamps based on moment of creation, as with Bitcoin, a blockchain would become much faster and more reliable. With this method, a simple check of time can ensure that computers know which block is valid, limiting synchronization only by bandwidth. The block height is then the only determining factor to create a new block. This is a Verifiable Delay Function, or cryptographic way to be sure that time has elapsed. With Optimistic Concurrency Control, the speed is increased some more (this is a method that checks if a large amount of transactions are true, so that it is not necessary to verify every single record). Anatoly understood that Bitcoin and Ethereum were far too slow to generate a global payment system (Bitcoin) or supercomputer system (Ethereum).
He started coding in C programming language. Not much later, Greg Fitzgerald joined him, who had also worked at Qualcomm. He recommended programming in Rust because it would make software more productive. Anatoly tried it out, and two weeks later the whole mess was in Rust. He named their project Loom. Feb. 13, 2018, Greg went to work on the prototype open source implementation of Anatoly's white paper. A publication followed in GitHub under the name Silk. The next Qualcomm collaborator, Stephen Akridge, had another improvement that had huge implications for speed: let graphics processors (GPUs) do the signature verification. This worked and he adopted it. These three Qualceteers hired three more people to take a closer look at Loom. Around that time, there was an Ethereum-based project called Loom Network. You'll see. People were wondering who was doing what.
Not to worry, the place where Anatoly, Greg and Stephen had surfed together was called Solana Beach, California. March 28, 2018, they created the Solana GitHub organization and named Loom Solana. A demonstration of the speed of their protocol followed in June 2018. With 50 permissioned nodes (self-appointed), they managed to process 250,000 transactions per second. Another test followed later that year in December, where they used 150 nodes that could handle an average of 200,000 transactions per second in a gigabit network, occasionally hitting speeds of 500,000 per second.
A series of private token sales followed in 2018 and 2019 in which they raised $20 million. Their Tour de SOL, the first public test net, went live in early 2020, followed by the launch of their beta mainnet in March 2020.
Solana has established a partnership in this relatively new world of GameFi. This is an amalgamation of Games and Finance. So the idea is that new games with a finance component can have a place in the Solana network.
A big hype is the metaverse environment, such as Decentraland or TheSandbox. You can play a game in a metaverse in a computer-generated world. Most of these games work with in-game items, known as NFTs (non fungible tokens). Solana allows you to buy these NFTs on their blockchain, so you can get started with little transaction cost. An in-game NFT comes in many shapes and sizes. For example, you have the unique NFT, which is usually very pricey, of which there is only one. Then you have, for example, a common, a rare and an uncommon. This is somewhat similar to the tactic of Magic the Gathering, which was also used here, but with real world pictures. Beautiful game, by the way.
Solana GameFi funds game studios where games are invented and technology companies in the gaming world, among other things. Virtual Reality is becoming a better and more interesting way of gaming, and that has not gone unnoticed by Solana, who provide the space for its development here.
The Solana ecosystem has many partners and participants. We will highlight a small part of them.
In the area of DeFi: Orca, Raydium, Hubble Protocol.
Lending: Solend, Francium, Port Finance.
NFT: Solsea, Magic Eden, Exchangeart.
Web3.0: Audius, Panzer Dogs, Phantasia.
DEX: Solend, Lumos Exchange, Hydraswap, 01.
Metaverse: Space Falcon, Star Atlas, Afflantium Metaverse.
dAPPs: Tatum, StarLaunch, Kin.
Solana also works with Binance, Kraken, PancakeSwap, UniSwap, CoinGecko, Brave Browser and many more, too many to mention. It is safe to say that Solana has built a huge network.
The Solana Foundation, based in Zug, Switzerland, keeps an eye on the entire project. It ensures that Solana maintains a good name and that new, good developments are put on the roadmap. It also keeps an eye on keeping the network decentralized and helps new validators get started. Anyone who wants to develop a project on the Solana blockchain can also always turn to this foundation for a grant.
An important task of hers is keeping an eye on energy-neutral operations. Solana already uses very little energy, but on top of that the foundation wants to offset what little they use, by having old refrigerators destroyed, encouraging the proper disposal of CFCs. They publish open source data from the Energy Use Report, so anyone can see what they themselves can do for the environment. They also urge validators with heavy equipment to do something about their footprint. If people have an excellent idea to make Solana or themselves more energy efficient you can ask the Solana Foundation for a grant for your project or idea. They even want to encourage you to get outside more through NFTs, so Solana is good for your health too! The Solana Foundation's goal is to have a footprint of 0. You can check their website under environmental impact to see if it still says 0 there. At this moment it says 0.
Currently, there are around 500 million tokens on the market. Around 200 million more will be added over the next 10 years. The idea is that relatively fewer coins will be added with a flattening curve, so the price will not collapse as a result.