What is Solana?
Solana is a blockchain platform that focuses on solving the scalability problem facing popular projects such as bitcoin and Ethereum.
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The developers pointed out that many large blockchains face limited bandwidth, which leads to higher transaction costs and slower processing. These limitations hinder the development of projects using these platforms and, according to the creators of Solana, slow down the progress of the entire cryptocurrency market.
Solana’s innovative solution is a new generation of programmable blockchain that stands out for its high transaction speeds and low fees. This approach allows processing many more transactions while maintaining accessibility for users.
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The platform claims to be able to scale to adapt to growing network volumes, making it ideal for rapid growth and maintaining high data processing rates. As a result, Solana expects to attract developers working on other bandwidth-constrained blockchains, such as Ethereum, and provide them with a more efficient solution for creating decentralized applications (dapps).
Token price
The Solana token (SOL) is currently priced at around $221.76.
When’s the listing?
Solana (SOL) was first introduced on cryptocurrency exchanges in 2020. It was listed on popular platforms such as FTX and Binance in March 2020. Soon after, Solana became available on other exchanges including Coinbase and Kraken.
How it works
Solana uses the Proof of Stake (PoS) consensus mechanism, which translates to “proof of ownership”. This method allows to distribute transaction processing among the network users who have the largest number of tokens.
Unlike the Proof of Work (PoW) algorithm, which is used in networks such as bitcoin, PoS is considered more environmentally friendly. PoW requires enormous computing power and is accompanied by significant energy consumption, which negatively affects the environment. PoS, on the other hand, reduces the need for intensive hardware operation by minimizing energy consumption.
In addition, the Solana architecture introduces the Proof of History (PoH) algorithm. Its main purpose is to improve synchronization between network nodes and speed up transaction processing. PoH does not replace the consensus mechanism, but serves to optimize the performance of the blockchain. Among its functions:
- Accelerating the creation of new blocks.
- Optimization of their processing.
- Increase network throughput. PoH is also responsible for storing data in the blockchain registry.
Technological features of Solana
- Tower BFT – an algorithm that uses PoH for time synchronization, which reduces the amount of data transferred between nodes.
- Gulf Stream – a mechanism that reduces the number of unconfirmed transactions and provides a processing speed of up to 50,000 transactions per second.
- Turbine – a system that divides data into small blocks for faster transmission between nodes.
- Sealevel – a technology that allows simultaneous processing of multiple transactions, which significantly speeds up network performance.
- Pipelining – a tool that optimizes the sequence of incoming data processing to increase overall network speed.
- Cloudbreak – a database optimized for parallel data access and writing to SSD devices.
- Archivers – distributed storage where archivers store data without participating in the consensus process.
Despite its strengths, Solana has vulnerabilities. For example, in September 2021, the network experienced a major technical failure that demonstrated the need for further improvements.
SOL tokens
Solana has its own native SPL token called SOL (SPL is an analog of the ERC-20 standard in Ethereum). The developers have provided two main ways to use it:
- For voting and participation in project management.
- To pay commissions for transactions made within the network.
Interesting fact: The SOL token can be used for steaking, allowing holders to earn money by keeping the blockchain running.
The SOL token model is deflationary. To control its supply, the project team periodically burns some of the coins, reducing their total number in circulation. This helps to create a shortage on the market, which has a positive effect on the value of the token.
SOLs can be stored in cryptocurrency wallets that support the SPL standard.
Note: Solana’s success is often attributed to the support of Sam Bankman-Fried, the head of the FTX exchange. However, in November 2022, the collapse of FTX negatively impacted the value of the SOL token, causing it to plummet.
Despite the difficulties, many analysts are confident in the cryptocurrency’s potential. The stable development of the ecosystem and interest from users create prerequisites for the future growth of the token.
Where to buy SOL
At the time of preparation of this material, Solana ranks among the top 10 cryptocurrencies with the largest market capitalization. SOL tokens are available for purchase on most leading cryptocurrency exchanges.
You can buy Solana for roubles, for example, via Binance. In the conditions of sanctions, it is most convenient to use the exchange’s P2P platform. To do this, you will need a bank card or e-wallet, which are not subject to the current restrictions.
How to buy Solana via P2P on Binance:
- First, purchase one of the available cryptocurrencies, such as the Tether (USDT) stablecoin, whose exchange rate is pegged to the US dollar at a 1:1 ratio.
- After that, exchange the purchased USDT for Solana tokens via the exchange’s internal tools.
How to withdraw
Withdrawing SOL tokens from a cryptocurrency exchange or wallet is done in a few steps.
- Account Authorization.
Go to the exchange (e.g. Binance, KuCoin) or wallet where your SOL tokens are stored. Make sure you have access to the account. - Go to the output section.
Find the “Withdrawal of funds” tab (usually located in the “Wallet” section). - Selecting a token to withdraw.
From the list of available cryptocurrencies, select Solana (SOL). - Specifies the recipient’s address.
- Go to the wallet where you want to transfer the SOL (e.g. Phantom, Solflare or Trust Wallet).
- Copy your Solana wallet address (it starts with an alphabetic or numeric character set).
- Paste this address into the output field on the exchange.
- Network Selection.
Make sure that the Solana (SOL) network is selected for withdrawal. Using another network will result in loss of funds! - Specifying the amount.
Enter the number of SOL tokens you want to withdraw. Take into account the transaction fee (it is usually minimal). - Transaction Confirmation.
- Check the entered data (wallet address, network and amount).
- Confirm the output using two-factor authentication (if enabled).
- Waiting for processing.
Once confirmed, the request will be processed. The transfer time in the Solana network is usually a few seconds or minutes.
It’s important to consider
- Check if your wallet supports SOL tokens and the Solana network.
- Make sure the recipient’s address is correct. A mistake in the address will result in loss of funds.
- Find out about the minimum withdrawal amount and commission on the chosen exchange.
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