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Solana – Blockchain Platform, Important Facts to Know

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In the cryptocurrency ecosystem, Solana stands out as the fastest blockchain project. Its speed and efficiency have garnered significant attention. Let’s delve into what makes Solana a standout in the world of blockchain.

What is Solana?

Solana is a blockchain developed to host scalable, decentralized applications. The project was created in 2017 and is currently managed by the Solana Foundation based in Geneva. Meanwhile, Solana Labs, based in San Francisco, designed the blockchain.

Interestingly, transactions are processed faster with lower fees than rival blockchains like Ethereum. The project uses an improved proof-of-stake (PoS) blockchain mechanism called proof-of-history (PoH). This blockchain mechanism uses hashed timestamps to validate when transactions occur.

Solana can process 50,000 to 65,000 transactions every second, making it the fastest blockchain in the world.

Furthermore, Solana’s native cryptocurrency is SOL, used to pay transaction fees and for staking. It also gives holders the right to vote in future upgrades. Solana native asset SOL recorded an uptick of almost 12,000% in 2021 with a market cap of $66 billion. This makes it the fifth-largest cryptocurrency at that time.

However, the bullish momentum was short-lived, and the market cap dropped to about $11.71 billion by October 3, 2022. Since then, the coin has reclaimed its 2021 market cap level of $66 billion.

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What is proof of history?

Proof-of-history (PoH) is a consensus mechanism used in blockchain technology to verify the passage of time and where events fall in that timeline.

It is a novel consensus mechanism introduced in 2018 by Solana Labs. PoH uses a cryptographically secure and verifiable sequence of hashes to order transactions and blocks in a blockchain network.

In addition, it is a type of cryptographic clock that works by using timestamps for transactions with a hash that could showcase when the transaction was validated.

The PoH consensus mechanism is used with another, more conventional algorithm like the Proof of Work (PoW) or Proof of Stake (PoS). The Proof of History makes the Proof of Stake more efficient and resilient in Solana.

PoH is designed to improve the efficiency and resilience of Proof of Stake on Solana. It is used to order transactions and blocks in a blockchain network, making it faster and more efficient.

Also, Proof-of-History can be implemented in unison with other consensus approaches, such as Proof of Stake and Proof of Work, to enhance the scalability and performance of Blockchain networks.

Why Solana uses Proof-of-History?

Solana’s system makes things faster and smoother. It lets leaders send transactions immediately instead of waiting to gather a bunch before sending.

Furthermore, validators mark each incoming transaction with a time so all the nodes can arrange them properly, even if they don’t come in order.

This way, nodes can check transactions as they arrive instead of going through a whole bunch simultaneously.

Solana Price History

Solana’s SOL token started with private and presale rounds, with the last presale in March 2020 at $0.22.

Once it hit exchanges, SOL’s price rose from $0.50 to $1 until July 2020. It then surged, hitting $10 in March 2021.

Furthermore, the project attracted significant venture capital funding, raising over $300 million in June 2021.

This flooded the ecosystem with liquidity, propelling Solana to an all-time high of $260.06 in November 2021.

However, an oversupply of SOL held by venture capitalists and institutions contributed to its decline.

One year after its peak, Binance founder CZ decided to sell FTT tokens due to FTX exchange stability.

Surprisingly, CZ’s announcement triggered negative sentiment that caused FTX to fail. This made FTX and Almeda Research sell their SOL tokens, dropping the price to $8.42, almost 97% lower than its highest price.

Source: Twitter

After the crash, the price went up to $15.89. But it’s still way down, about 93% less than its highest point.

READ ALSO:30-Year-Old Miami Resident Convicted for Crypto Fraud

What makes Solana unique

As a blockchain platform, Solana has several unique features that set it apart from others in the space. Here is a brief breakdown of its unique features:

  • Unparalleled Speed: Solana is renowned for its impressive transaction processing speed. It can handle thousands of transactions per second, making it one of the fastest blockchain networks in the world. Solana can process almost 70,000 transactions per second, like Ethereum, which can process 15-45 TPS.
  • Low Transaction Costs: Thanks to its efficient design, Solana keeps transaction fees relatively low, making it an attractive option for developers and users.
  • Scalability: Solana’s architecture is designed to scale with demand. As more users and applications join the network, it can handle the increased workload without sacrificing performance.
  • Proof of History (PoH): Solana utilizes a unique consensus mechanism called Proof of History. This feature provides a historical record of all transactions, allowing nodes to verify the order and timing of events without needing to communicate with each other directly.
  • Decentralized Applications (DApps): Solana supports a wide range of decentralized applications, allowing developers to create a diverse ecosystem of projects and services. Solana has over 1,000 Decentralized apps running on its blockchain, with around 300 in 2021. This means that more projects are working with the Solana ecosystem.
  • Interoperability: Solana is designed to work well with other blockchain networks. Also, it enables seamless interaction between different platforms and expands its potential use cases.
  • Top Security Mechanism: Solana strongly emphasizes security, employing robust cryptographic techniques and a decentralized network structure to safeguard against attacks.
  • Eight Core Innovations: Solana has eight core innovations that make it unique. These include Proof of History (PoH), Tower BFT, Turbine, Gulf Stream, Sealevel, Pipelining, Cloudbreak, and Archives. These innovations work together to make Solana one of the fastest and most scalable blockchain platforms.

SOL Price Prediction for 2023

Earlier this year, the SEC took legal action against Binance and Coinbase, claiming they sold unregistered securities. Also, Solana was mentioned in the lawsuit.

Meanwhile, this isn’t the first time the SEC has accused Solana. They previously said Solana Labs sold unregistered securities in the form of Solana tokens back during its ICO from 2018 to 2020.

Unfortunately, just as Solana was starting to bounce back, the SEC’s accusations caused the coin to drop again.

Its price fell by over 40% after the SEC sued Binance and Coinbase. Although it’s recovered a bit, Solana might still face challenges ahead.

Robinhood, a cryptocurrency and stock exchange, removed Solana, Cardano and Polygon. This was due to regulatory problems. This increased the negative sentiment within the ecosystem.

However, despite concerns about regulations, the Solana ecosystem has performed reasonably well. After the FTX incident in 2021, Vitalik Buterin, co-founder of Ethereum, expressed optimism about Solana’s future.

If the SEC’s case gets more serious, SOL might drop to its lowest point of about $8. But if there’s positive progress in the case, SOL could bounce back to as high as $20.5. So, our estimate for Solana’s price is an average of $14.25 by the end of 2023.

Solana Price Prediction for 2030

Looking ahead, it’s essential to realize that Solana’s future price will depend on regular supply and demand rather than rapid surges.

FTX was a major holder of Solana in the past, but this might not be the case anymore due to legal issues. Solana’s growth might not be as steep.

Even though the road might not be easy, Solana is still an exciting project in the crypto world.

Solana stands out as an inventive and lively crypto project. They’ve even launched new products like Solana Mobile. While Solana has promising long-term potential, investors must be mindful of risks related to centralization and security, which could lead to a loss of SOL’s value.

While it might not reach its all-time high again by 2030, if Solana addresses its challenges, our prediction suggests it could get an average price of $111.5.

However, remember that risks, like centralization and security concerns, could impact Solana’s value.

Expert’s View of Solana Price Prediction

Below are different expert’s verdicts on Solana SOL’s price potential:

According to DigitalCoinPrice, the price of SOL is expected to exceed $38.23. By the end of the year, Solana is expected to reach a minimum fee of $17.43. In addition, the SOL price can get a maximum level of $44.71.

Bitnation is anticipated to reach a maximum price of $36.74 as the crypto market starts to recover. The minimum prediction is $24.49, while the average price is $30.

Furthermore, GOV Capital forecast SOL to increase by over 300(307.75%) to $83.18 by the end of next year.

Solana SOL Tokenomics

There are 413,438,286 SOL coins in Circulation, with a total supply of 511,616,946 coins. This shows that the SOL coin in Circulation is nearing its entire supply and could increase demand soon.

The Solana ecosystem has two primary uses. First, people can stake their SOL to earn rewards. Second, they can use SOL to pay for fees related to smart contracts or other transactions.

Additionally, Solana rewards those who help secure its network with a set amount of new tokens. The rewards are distributed based on how many tokens are staked. This is measured against the total supply of tokens.

Meanwhile, when Solana started, it had an inflation rate of about 8%. This is expected to decrease by 15% annually until it levels at 1.5% annually. Most new tokens will go to validators as rewards, with 95% and 5% set aside for expenses.

How to stake Solana?

Solana’s staking program allows its stakes to earn rewards for helping secure the network. They entrust their tokens to validators who handle transactions and manage the network.

This system operates on a model where both risks and rewards are shared. If a validator receives a higher stake, they have a greater chance of being selected to record new transactions on the ledger, resulting in increased rewards.

Below are some Web3 wallets to stake Solana on:

  • Phantom Wallet
  • Math Wallet
  • Zelcore
  • Atomic Wallet
  • Exodus Wallet
  • SolFlare
  • Sollet

There are exchanges where you can stake your Solana for reward. These include:

  • Binance
  • Kraken
  • FTX
  • com

Conclusion

Solana is a blockchain platform that is gaining popularity due to its speed, scalability, low transaction fees, and unique features. Its proof-of-history consensus mechanism and open-source code make it one of the fastest and most scalable blockchain platforms.

While cryptocurrency is always facing regulatory challenges, there’s potential for long-term growth.

FAQs

What is Solana?

Solana is a blockchain platform designed to host decentralized, scalable applications. It is known for its unique features that make it stand out from other blockchain platforms, including its speed, scalability, and low.

How many SOL Tokens are currently in Circulation?

According to CoinMarketCap, Solana has a total supply of 511.6 million, and currently, there are 413,438,286 SOL coins in Circulation.

How can I get involved with Solana?

If you’re interested in getting involved with Solana, you can start by purchasing SOL tokens on most exchanges, including Binance, Coinbase, KuCoin, Huobi, and OKX.

How many transactions can Solana process per second?

Solana blockchain can process about 65,000 transactions per second. This is massively higher and faster than Ethereum TPS.

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