Solana is a decentralized blockchain platform similar to Ethereum, that is built with a hybrid consensus protocol that includes both delegated proof-of-stake (DPoS) and proof-of-history (PoH) and offers smart contract capabilities.
SOL is Solana’s native cryptocurrency.
Operating as a utility token, it can be used to transfer value while providing blockchain security through staking.
Anatoly Yakovenko developed the idea of a proof-of-history consensus mechanism after spending 13 years at Qualcomm as a distributed systems design engineer.
His worked on these systems centered around network synchronization based on reliable network clocks and timestamps when defining blocks.
Proof-of-history (PoH) uses timestamps when defining blocks, instead of using miners to define blocks as in proof-of-work (PoW), or using staked tokens to define the network block as in proof-of-stake (PoS).
With such a setup, networks can operate exponentially faster than the Bitcoin or Ethereum networks, which don’t use a clock to aid in network synchronization.
Yakovenko outlined his proof-of-history (PoH) technique in a white paper published in 2017.
By utilizing his PoH algorithm to provide a lightning-fast network synchronization AND using a version of proof-of-stake (PoS) that chooses one leader node instead of having more nodes slowing down the network because they’re all verifying transactions and timestamps, Solana is able to process as many as 50,000 transactions per second (TPS), at a cost of $0.00025 per transaction.
Ethereum, on the other hand, handles anywhere from 10-20 TPS, but this varies at times.
The Bitcoin blockchain has an average TPS of about 5.
Solana blockchain’s backbone is comprised of a network of 1,900+ validators that process transactions and participate in consensus.
Solana currently has a superminority of 30, which represents the smallest number of validators that control 33% of the total active staked SOL.
Solana is currently run by the Solana Foundation based in Geneve Switzerland.
Solana was originally called Loom, but the name was changed because another project with the name “Loom” already existed.
SOL was launched in 2020 and has become one of the top 10 cryptocurrencies by total market capitalization.
As of August 2022, its market capitalization stands at $12.2 billion.
It has a circulating supply of 349 million SOL, with a total supply of 511,616,000 SOL.