Many cryptocurrencies are on the market, but when did SOL arrive? Blockchain is the future due to its ability to boost transparency, traceability, market access, and transaction efficiency. Solana, a blockchain with a distinctive trademark, arrives just in time to fill a market void.
Anatoly Yakovenko created Solana in 2017 to increase throughput boundaries while lowering prices. Solana (SOL) went public in March 2020, and by the summer of 2021, the stock had soared to an all-time high.
What is Solana?
Solana (SOL) is a new open-source project that creates a new permissionless and high-speed layer-1 blockchain. In addition, the project has a high level of functionality.
It employs an innovative hybrid consensus architecture that combines a novel proof-of-history (PoH) method with a lightning-fast synchronization mechanism based on proof-of-stake (PoS). As a result, Solana can run above 710,000 TPS without needing scaling solutions. Furthermore, the implementation of the PoH mechanism allows ‘timestamps’ to be easily added to the blockchain.
When Solana was first issued, it traded for under a dollar per coin. The issuance of the SOL is capped at 480 million coins. Solana (SOL) is currently among the top ten most valuable cryptocurrencies based on market capitalization, trading at $34.54 after a 4.03 percent increase.
Where do Solana Coins Originate?
Anatoly Yakovenko, the brains of the Solana platform, launched it in 2017. Being a former software developer at Dropbox, he has extensive knowledge of compression algorithms.
Yakovenko, Eric Williams, and Greg Fitzgerald, Solana’s CTO, came up with a new way to cope with the typical throughput issues that plagued the Bitcoin and Ethereum ledgers. Apple, Qualcomm, Intel, Google, Microsoft, Twitter, and Dropbox, among others, are the firms whose expertise the team benefits from due to their previous employment with these companies.
This currency’s issuance schedule stands out compared to Bitcoin’s fixed supply of 21 million coins and Dogecoin’s unlimited supply of coins. Solana verifies transactions, manages its coin supply, and generates new coins using a ‘proof of stake’ approach. Validators earn new coins as rewards for verifying transactions and keep a commission.
In November 2021, over 302 million Sols were in circulation. Solana, like many other cryptocurrencies, has a capped annual issuance because coins are given to individuals supporting the cryptocurrency.
What Exactly Does Solana do?
The most common use of Solana is as a cryptocurrency, allowing users to send and receive Solana using a cryptocurrency wallet, as well as use it to pay for goods and services. Beyond that, however, you can use it to fuel numerous apps that offer a unique set of features, not just as a means of exchanging money from one party to another. Some of these uses include:
- Untradable tokens: Solana can power and sell digital art or NFTs that aren’t transferable between parties.
- Solana timestamps its transactions in addition to using a proof-of-stake mechanism to verify them, making it impossible for validators to rearrange them. As a result, Solana can be considered a ‘censorship-resistant’ system.
- Smart contracts are apps that carry out a contract’s provisions automatically when the contract’s circumstances are met.
- It also supports the development of various additional digital apps, such as games, investment, social media, etc.
- Solana allows you to make and use payments that do not require permission or ones that are not subject to government or centralized control.
Should you Invest In Solana?
Cryptocurrencies are a big contrast to the stock market. With stocks, investors can own a small piece of an enterprise, and therefore tie their long-term fortunes to the company’s core business. The investment will likely pay off if profits rise.
Cryptocurrency can also be very profitable through the surges in value Solana often goes through. However, instead of focusing on previous profits and worrying about missing out, it’s critical to know precisely what you’re purchasing before making a purchase.
With the stock market, the assets and cash flow of the company are subject to the legal claims of stockholders, and the company may even pay dividends to investors. Solana, like most cryptocurrencies, is not backed by any real-world assets. Instead, traders’ confidence and speculation drive them.
Cryptocurrency may lose its momentum if investors lose faith in the technology. Many investors, including Warren Buffett, are wary of cryptocurrency because of this discrepancy.
Bottomline
You can trade Solana directly or invest in firms that may benefit from the increased demand for cryptocurrencies. However, it is essential you have knowledge of the dangers of trading Solana, so you don’t lose your money.
Cryptocurrency is not only volatile but is rarely backed by tangible assets or cash flow. In other words, do not invest money you cannot afford to lose if you are trading cryptocurrencies.