Solana employs architectural design choices which focus on faster transaction settlement speeds while maintaining very flexible infrastructure capabilities.
It is the vision of Anatoly Yakovenko, and it was originally called Loom before being rebranded and it is said to be named after Solana Beach, a small beach town North of San Diego, where Anatoly, Greg Fitzgerald and Stephen Akridge lived and surfed for three years while working at Qualcomm.
Solana is not only fast; it is scary fast
It boasts a block time of 400 milliseconds. To put things into perspective Bitcoin’s block time is 10 minutes and Ethereum’s block time is around 10 seconds.
Despite never going past 50000 transactions per second in the past, Solana actually has the capacity of handling up to around 710,000 transactions per second, something which is roughly 30 times the amount which VISA handles. It is able to do this feat by having 25 people validating 25 blocks at once and at all times. Moreover, there are no requirements in order to become a validator, something which greatly eases the whole process.
Solana’s Consensus Mechanism
Solana does not employ the conventional proof of work, nor the proof of stake mechanisms.
Instead, it used a new system called proof of history which is thoroughly described in its whitepaper .
A proof of history mechanism, in essence, works much like the proof of stake mechanism but it adds in a special variable: time.
As such, the proof of history operates less as a consensus mechanism and more as means to integrate time into the blockchain data.
This basically means that timestamps are put in place on the blocks with a specific date and time and by doing so it allows for an incredibly fast sequencing of validators who, in turn, can now submit blocks without having the need to constantly communicate back and forth.
We take time for granted when using computers, smartphones, you name it. However, there is still a big problem with other blockchains on a way to agree on time, meaning that the networks’ computers must “chat” back and forth constantly to do so before submitting a block, something which takes time and requires resources.
Solana got around that problem by having everyone timestamping their blocks and using a cryptographic proof.
As such, this clever solution made it so no one needs to wait for everyone to agree on time or other validators to check and approve one’s work.
Another problem which this mechanism addresses is the discrepancies which were causing the order in which the blocks arrive to be different than the order in which the blocks were sent (mostly due to its user’s different internet speeds or location). It did it by simply having nodes sorting the blocks out, organizing them, and then adding them to the blockchain.
Sealevel is a Solana feature which allows for validators to also run smart contract code in tandem with whatever they are already doing.
By having such a feature, Solana avoids being bottlenecked as its computational capacity increases easily as new technological improvements are made in terms of hardware.
Solana has smart contract capabilities but the way they are made is vastly different than on other blockchains.
Solana uses the Rust programming language which is a very low level language that can offer much more than others but requires much more work to do so.
However, unlike in the Ethereum blockchain, developers can’t simply copy and paste their projects, rather code everything from the ground up.
Some believe that Solana’s smart contracts will outperform Ethereum’s but only time will tell.
Solana’s native cryptocurrency is SOL.
SOL is both deflationary and inflationary.
It is deflationary as part of the transaction fees get burned, and it is inflationary due to their approved inflation schedule in which staking rewards will go from paying out around 8% to a fixed rate of 1.5% in 10 years, decreasing by 15% year-over-year.
The one concern
There is no hiding the fact that Solana’s network was down for the third time in less than six months
On the 2020 outage, it was claimed that it was due to resource exhaustion which caused a denial of service as the network was overwhelmed by transactions. Apparently, bots were flooding the network by trying to make 300,000 transactions per second, which caused several problems in terms of transaction queues.
Even if it was only for 6 hours and no funds were at risk, a decentralized protocol should never, ever go down.
Solana might have a bright future ahead but it needs to break away from the dark clouds which still loom and make some investors be on the backfoot: the network's outages
Its total value locked (TVL) reached an all-time high of approximately $15 billion recently and with new projects on the pipeline, SOL’s price might soar once again to new heights.
Remember to check the project’s website for further details and release schedules.