Solana is named after a beach near San Diego California. Is the project a paradise or is there landmines beneath the sand?
Solana is one of the fastest blockchains, but programmers have to use the RUST programming language to write a smart contract. Not many people know the RUST language.
Keep reading and I’ll share what makes Solana different than other crypto projects, 3 challenges with Solana, and what the SOL token does.
What is Solana?
Solana was created by Anatoly Yakovenko who helped make Dropbox and Qualcomm (wireless communication).
When it comes to crypto it’s all about how blocks are made. In the “old days” crypto had NO value and Bitcoin started with a proof of work system.
You can click on the link HERE to learn how the proof of work model works. Then came the proof of stake model, which has its own problems.
Inflation is usually higher with proof of stake, coins are usually minted and given out before launch. Another problem with proof of stake is MOST crypto projects don’t have slashing enabled because investors don’t like the idea their stake will be reduced.
Also, there are some security concerns since nodes can store the blockchain on a cloud with Amazon for example.
What makes Solana unique is it’s the first blockchain that is attempting to use a “proof of history” model. With Bitcoin, a new block is created every 10 minutes and with Solana a block is made every 600 milliseconds.
Proof of history is about hashing you could think of hashing as a tiny amount of computer power.
Every hash takes a certain amount of time and you can see which hashes came before or after. Solana has created a clock based on data. Here is a video that attempts to explain proof of history.
This proof of time method means it’s SUPER FAST.
Their network is designed to have over 700,000. transactions per second. This is in theory, but the good news is they have already achieved 65,000 transactions per second and this is still GREAT.
Another positive thing with Solana is its website says the average cost per transaction is $0.00025. This is insanely cheap compared to Ethereum, Bitcoin, and even Visa.
- It’s insanely fast.
- It’s insanely cheap.
You also need a software program called Docker, that I’ve played with because I tried to run a Chainlink node.
Chainlink transfers real-world data to smart contracts and you can do this selling data “it’s very technical” HERE is a blog post I made on how to do it.
Plus, there is more good news with NFT (Non-Fungible Token) universe is growing on the blockchain. In September 2021 Solana saw its first million-dollar NFT sale.
Right now there are over 400 projects being built on Solana and this is a good thing. Since the power of a blockchain is only as powerful as the community behind it.
Concerns with Solana
Not everything is rainbows and sunshine with this project. One of the biggest concerns is Solana smart contracts are not EVM (Ethereum Virtual Machine) compatible. The programing language Solana uses is RUST and not many people know how to operate it.
You could compare it to learning a new language in order to do business, which is doable but a pain in the ass.
The truth is people are insanely lazy right?
The second concern is 38% of the SOL token that runs on Solana is for everyday people and the rest are for the founders and foundation.
The reason having many wales hold tokens isn’t good is because they have a lot of control over a project. If the wales decide to sell then you’re at their mercy, if you hold the token. (Wales can make BIG waves).
It’s riskier and isn’t as decentralized.
The third concern is security! Of course, Solana is going to say their project is totally secure, but the truth is this is new. It hasn’t been battle-tested as much as Bitcoin.
Theories are one thing and the real world is another. The only thing that proves something is secure is time. Bitcoin is by FAR the most secure crypto project and has stood the test of time, without changing.
Ethereum isn’t that secure and the new upgrade that changes MANY things makes it even LESS secure. Oh, and there were all these hacking attempts on Ethereum.
The SOL Token
The token that runs on the Solana blockchain is called SOL and there will be a max supply of 489 million tokens.
According to Coingecko, there are around 297 million tokens in circulation right now.
The SOL token has 4 uses.
- You can stake it to earn more SOL tokens.
- To perform micropayments known as lamports.
- Contribute to governance and voting on things.
- Pay gas fees in SOL.
The SOL gas fees are burned and this helps with deflation and keeping the price high.
Comparing Solana to the Competition?
Solana supports Daaps and smart contracts similar to Ethereum. Is it the Ethereum killer?
Ethereum really is the largest player for smart contracts and Solana is the underdog. Instead of starting with proof of work, which Ethereum started with Solana did think outside the box and did proof of history.
Apart from proof of history, Solana is different because the transaction costs are VERY small. Your talking about the average transaction cost is $0.00025. If you compare that to Ethereum, which average transaction fee is around $25.
To be fair the transaction fee of Ethereum is “all over the place” and I used this chart HERE to look at it.
Another project that has super fast speed and “insanely” low transaction fees is Hedera Hashgraph and you can learn more from the link HERE including some skeletons in the closet.
Comparing crypto projects is almost like comparing fast-food restaurants. Some will outgrow others, but there is a place for ALL depending on your taste.
Solana has a lot going for it. One of the biggest positive news is that Audius is moving over to Solana. Audius is a project that puts music on a blockchain and you can read more about this project from the link HERE.
Bear in mind Solana is still very new.
I only see more growth from this project and I’ve VERY bullish on it. It’s one of the top crypto projects! Still, I recommend doing your own research.
Also, U.S. leaders could impose stricter regulations on DEFI projects in the future and this could impact this project.
I hope this blog post on is Solana worth buying was helpful, bye now.