Since the invention of distributed ledger technology, blockchain technology has changed the financial world as well as countless other industries that benefit from its features. Many different blockchain networks have popped up over the years each with its unique take on how it can be used.
Solana is a blockchain network that has managed to make a splash in the industry, mostly due to how versatile and useful it can be for many different commercial and financial activities. In this article, we’ll go in-depth over what Solana is, how it works, and what are its applications.
What is Solana?
Solana is a blockchain network created by a Swiss non-profit called Swiss Solana Foundation. The goal of the project was to create a blockchain network that will be resistant to censorship as much as it can be. It was introduced in 2017 based on the white paper created by Anatoly Yakovenko, a software engineer from Dropbox.
It uses what’s known as “proof of history” as a way to validate and control transactions. Proof of history allows blockchain nodes to validate transactions simultaneously. This feature enabled the blockchain network to complete transactions at a faster rate, making it closer to conventional payment systems.
What are the Features of Solana?
Solana comes with most of the features of the older blockchain networks and with some of its own. These allow the transactions to be performed in a scalable way, which means it will continue to grow as it expands to more users.
Open Source Code
Solana has open source code meaning that anyone who downloads the source code can change it and make it suitable to their own needs and uses. This feature isn’t unique to Solana and many other blockchain networks use it and implement it.
SOL
Solana has its own native currency, called Solana or simply SOL. There are also smaller denominations called Lamports, named after Leslie Lamport, an American scientist, known for his work in computer engineering.
Proof of Stake
SOL uses proof of stake similar to that of Bitcoin to confirm transactions. This feature also isn’t new or unique but it’s implemented using advanced technology and allowing SOL transactions to boast that they are easy to keep track of and impossible to scam.
Proof of History
Proof of history is the main claim to fame for Solana, as it’s not something other cryptocurrencies are using. Proof of History (PoH) is a consensus method that takes the time of a transaction and merges it with Proof of Stake to process the transaction. With PoH, Solana uses a synchronized clock for the entire blockchain. PoH can be used by a validator to get a replay of events within the blockchain.
From the user's standpoint, this simply means that the transactions made in SOL are much faster than with most alternative cryptocurrencies.
What are the Main Uses for Solana?
There are many different uses for Solana blockchain that stem from its unique technological feature and the ability to quickly upscale the currency and add a lot of new users.
Games
One of the main commercial uses of Solana and its cryptocurrency is in gambling games. Solana casino games have popped up and found their audience mostly with young and tech-savvy players. Many of these games use the so-called play-to-earn systems, where the players add up their wins in traditional betting games and get payouts in Solana.
Fast and anonymous payments are especially important to those who bet online and that’s why Solana has quickly established itself as a favorite in the betting industry.
Decentralized Financial Institutions
Decentralized financial institutions also known as DeFis provide all the services that are usually provided by traditional financial institutions – such as banks. These services are provided without the centralized structure of a bank and they are the main attraction of using Solana for most users.
The most used DeFis provided by Solana are exchanges, digital wallets, and automated financial contract systems. Solana is also the backbone of many different cryptocurrencies such as Saber. It’s used for cross-currency margin trading.
Lending Protocols
Solana allows its users to use traditional banking services backed by its cryptocurrencies. This includes the ability to lend and borrow funds in crypto. The payments can be automated, which makes the contracts more secure than those in fiat currencies and the users are allowed to earn interest in the process.
NFT Apps
Solana entered the NFT application market as soon as it became popular. The apps are used to mint and then trade digital artwork. The users can create and sell their own NFTs or they can assimilate the artwork within a Solana game. There are a few marketplaces for NFTs, which include: Metaplex and Solanart. Over the last couple of months, Solana NFTs have increased in sales at a rate of about 80 percent.
Web3 Apps
One of the most forward-looking applications of Solana blockchain is its use in modern applications that take advantage of its innovative technology. The apps are as decentralized as the cryptocurrency and its uses stem from that.
A few examples of such apps include:
Dispatch: an analytics platform that enables application developers to track user engagements.
Squads: a Solana-based treasury fund management application.
Audius: a decentralized audio streaming app.
What Makes Solana Different?
Not all features Solana has to offer are unique, some are just basic features of blockchain but done with a twist. However, Solana is somewhat different from cryptocurrencies due to how those features are used and implemented.
Resistant to Censorship
In the world of blockchain, censorship means blocking network activity by not allowing some nodes to join the network. It’s meant to prevent adding new blocks to the blockchain. It can happen due to malfunctioning nodes or intentional sabotage.
Solana rotates nodes in order to prevent this issue in particular. This was its initial selling point since it was designed in 2017.
Great Transaction Speeds
Some of the most popular cryptocurrencies such as BTC and ETH have rather slow transaction speeds. Solana has a very short block time and thus achieves much greater speeds than most other cryptocurrencies. It’s especially useful when processing payments.
Online games and shopping are therefore the areas where Solana excels as those are the areas where users want the transaction to be done immediately.
Scalability
Solana handles high volumes of traffic better than most blockchains of the first and second generations. Ecosystem architecture is one of the most important features of modern application development as it allows users to connect their devices, services, and platforms into one organized system. It’s these uses that are best suited to Solana.
To Sum Up
Solana is a blockchain network known for its innovative technology. It’s specially made to prevent censorship and it accomplishes that by rotating block nodes. Solana can be used for online gambling, decentralized financial institutions, and for development of Web3 apps.
Solana is easy to scale, it has faster transaction speeds when compared to most competitors, and it’s the blockchain behind a few popular cryptocurrencies. There are plenty of different blockchain networks out there and it’s not easy to be compared to blockchain or ETH, but Solana is able to compete with the best of the industry.
