Solana

What is Solana? How SOL Cryptocurrency Works and Where to Buy?

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Just like primitive blockchains, we all take time for granted. Most of the blockchains do not keep any reference to time while recording transactions. Agreement on time is a difficult problem to solve in a distributed system. Because blockchain does not take reference from any external source of time. 

Then in 2017, a Qualcomm executive, Anatoly Yakovenko, decided to introduce a clock in the blockchain. That blockchain is Solana. let’s dive deeper if you want to know more about it. 

What is Solana (SOL)?

Solana is an open-source blockchain platform that hosts decentralized, scalable applications. This project was built by San Francisco-based Solana Labs. Currently, it is run by the Solana Foundation based in Geneva. 

Solana’s architecture is fast, secure, and designed for global adoption with resistance to censorship. Solana uses the innovative Proof of History concept to keep time on the blockchain. PoH plays an important role in Solana’s Proof of Stake consensus mechanism. 

Solana’s primary aim is to significantly enhance the scalability of blockchain networks with cost-effective solutions. Its hybrid model allows the Solana network to process 710,000+ transactions per second (TPS) without any additional scaling solutions.   

Solana’s open blockchain infrastructure facilitates the creation of smart contracts and scalable dApps. It also supports decentralized finance platforms and  NFT marketplaces.

How Does Solana (SOL) Work?

As discussed earlier, we need to deep dive into Proof of History and Proof of Stake consensus mechanisms to understand how Solana works. 

Solana essentially works with Proof of History. The PoH technology provides digital records of events of the blockchain network at any given time. You can visualize this as a cryptographic clock. It supports a simple data structure and assigns timestamps to each transaction on the network. Proof of History works with Proof of Stake to keep the Solana network secure, and operational and validate transactions with consensus. 

More technically, Solana uses Bitcoin’s SHA256 mining algorithm with a Verifiable Delay Function to create the historical record of all events on the blockchain network. In Solana, transactions are recorded when hash functions move in continuous loops using the previous output as the next input. It means that validators can perform as many transactions as possible because the transactions can be organized based on historical records. It eliminates the waiting time, contributes to high throughput, and creates blocks faster. 

What Makes Solana (SOL) Unique?

Solana significantly focuses on user experience (UX). Another aspect that Solana focuses on is scalability. Solana has high throughput without relying on layer 2 solutions. 

In a usual decentralized blockchain network, increasing the number of transactions leads to slower performance. It happens due to differences in time among the nodes. 

However, Solana tackles this issue with flying colours. Its PoS mechanism is responsible for sequencing and organizing transactions among the nodes by selecting a single ‘leader node’. This approach drastically reduces the network burden and performs transactions faster. 

How to Invest in Solana (SOL) in 2024

Like all other cryptocurrencies, Solana can be traded on most cryptocurrency exchanges. Some of the centralized crypto exchanges are Binance, Coinbase, Kraken, etc. 

After buying Solana, you can sell, store, or hold it. There are three types of wallets to hold your Solana. 

  • Hardware Wallets: These wallets are also called cold wallets because they aren’t always connected to the internet. You can use one of these hardware wallets to store Solana. Some best hardware wallets for Solana are Ledger Nano X, Trezor Model T, etc. 
  • Software Wallets: They are also called hot wallets because they are always connected to the internet. To store your Solana, you have to download the digital wallets on your desktops and mobile. 

For example, If you want to store your Solana using a hot wallet, you can download software for your desktop and mobile. Binance is one of the major mobile wallets to store your Solana. 

  • Crypto Exchanges: The third option is storing your Solana in the crypto exchange. All the major crypto exchanges like Coinbase offer built-in hot wallets. 

Where to Buy Solana (SOL)?

You can buy Solana from major cryptocurrency exchanges, as discussed above. Here are 5 best Solana cryptocurrency exchanges:

  • Binance: With 30+ million users and support for 350+ cryptocurrencies, Binance is the perfect spot for many investors like yourself to buy, sell, and trade Solana. It has a fee of 0.1% for spot trading and offers discounts of up to 25% if you pay for your crypto using BNB.
  • OKX: OKX is an adaptable and flexible crypto exchange platform. It supports over 350 crypto and NFT marketplaces as well. It has 50 million users that use multiple payment methods with swift transactions. You can easily buy and trade Solana using OKX.
  • Coinbase: Coinbase is one of the trusted cryptocurrency exchanges. It offers robust security tools like two-factor authentication to withdraw Solana. It offers a mobile app and a beginner-friendly dashboard to engage new investors.
  • Kraken: Kraken offers a customizable interface with real-time market data. You can drag, and drop, and arrange the ideal layout for your overview. With 200+ crypto support, it offers high-level security to safeguard your Solana.  
  • Crypto.com: Crypto.com allows you to buy, sell, and hold Solana. You can trade Solana at just $10 in a top-notch security environment, user-friendly UI, interest, and cashback rewards. It’s a successful cryptocurrency exchange that supports 250+ crypto assets including Bitcoin and Ethereum.

How to Buy Solana (SOL)?

You can securely buy Solana with 4 simple steps. Let’s discuss them. 

  1. Choose Your Perfect Solana (SOL) Crypto Exchange

Before buying Solana (SOL), You must do background research on most of the Solana cryptocurrency exchanges. You must get an overview of securities, transaction fees, UI/UX features, trading volume, and user reviews to select the best Solana cryptocurrency exchange. You can either choose from the one mentioned above or find a new one by yourself. 

  1. Create an Account in the Crypto Exchange Platform

Now that you have selected the perfect Solana exchange platform, it is time you create an account on the platform. You have to submit and upload your personal and financial documents like Bank ID, Citizenship ID for the platform to verify you as an authenticated person. 

  1. Deposit Fiat Currency into the Solana Crypto Exchange Account

Once the platform validates your account, you can deposit fiat currency to buy Solana. Remember, some crypto exchange platform takes at least three days to validate your account. 

  1. Buy Solana (SOL)

It is time for you to log into your crypto exchange platform and place the buying order for your Solana. After this, you can sell, stake, or hold your Solana. If you want to hold, there are two ways you can do that. We have already explained how you can use Hot and Cold Wallet to store your Solana crypto. 

The Bottom Line

Solana is a fast and scalable blockchain network. Its incomparable throughput, faster transactions, and cost-effectiveness make it one of the best-performing blockchain. 

Solana has a high-performing system architecture that supports dApps, and DeFi and holds the truth to expand in the future with innovations. As of now, it is the fifth-greatest cryptocurrency in existence. With time, it has the potential to become increasingly valuable in the future. 

What is Solana? How SOL Cryptocurrency Works and Where to Buy?
Reader Rating1 Vote
4.1