Solana (SOL)
Tue, Apr 15Solana is a decentralized blockchain platform akin to Ethereum, designed with a hybrid consensus protocol that incorporates both delegated proof-of-stake (DPoS) and proof-of-history (PoH), and it provides smart contract functionalities.
SOL serves as Solana’s native cryptocurrency. Functioning as a utility token, it facilitates value transfer while enhancing blockchain security through staking.
Anatoly Yakovenko conceived the proof-of-history consensus mechanism after spending 13 years at Qualcomm as a distributed systems design engineer. His work focused on network synchronization utilizing reliable network clocks and timestamps for block definition.
Proof-of-history (PoH) employs timestamps for block definition, contrasting with proof-of-work (PoW), which relies on miners, and proof-of-stake (PoS), which uses staked tokens for network block definition. This architecture allows networks to function significantly faster than Bitcoin or Ethereum, which do not utilize a clock for network synchronization.
Yakovenko detailed his proof-of-history (PoH) method in a white paper published in 2017. By leveraging his PoH algorithm for rapid network synchronization and implementing a variant of proof-of-stake (PoS) that selects a single leader node, Solana avoids the delays caused by multiple nodes verifying transactions and timestamps. This enables Solana to process up to 50,000 transactions per second (TPS) at a cost of $0.00025 per transaction.
In comparison, Ethereum processes between 10-20 TPS, with fluctuations, while the Bitcoin blockchain averages about 5 TPS.
The Solana blockchain is supported by a network of over 1,900 validators that handle transactions and engage in consensus. Currently, Solana has a superminority of 30 validators, which is the minimum number required to control 33% of the total active staked SOL.
The Solana Foundation, based in Geneva, Switzerland, oversees the operation of Solana. Initially named Loom, the project was rebranded due to the existence of another project with the same name.
SOL was launched in 2020 and has risen to become one of the top 10 cryptocurrencies by total market capitalization. As of August 2022, its market capitalization is $12.2 billion, with a circulating supply of 349 million SOL and a total supply of 511,616,000 SOL.
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