Solana (SOL): The Ethereum killer you never heard before
Solana (SOL) wants Ethereum’s spot on the crypto list, and ETH has reason to worry. SOL has better features and faster transactions you’d wish your cryptos had! The latest cryptocurrencies promise to beat the existing ones.
First, let’s discuss how the Solana network started and what its features are. As we proceed, you’ll see how it improves upon functions found in other coins. What’s more, you’ll see why you need SOL tokens in your portfolio.
Sometimes, a cryptocurrency doesn’t have to become something entirely new. Solana does what the other cryptos do but better. Some believe it could beat Ethereum, so perhaps you should see if SOL coins are a good investment.
How the Solana network started
In 2017, Anatoly Yakovenko and Greg Fitzgerald left Qualcomm. They went on to start Solana Labs. Bitcoin launched in 2009, so Solana is one of the latest cryptocurrencies.
However, BTC users saw problems with the original coin. Specifically, they often faced slow transaction speeds and confirmations. Solana was one of the coins that took on these problems.
Yakovenko and his team proceeded to figure out a solution. Then, they released the Solana network’s whitepaper in 2017. Later, it had an initial coin offering (ICO) five times.
In April 2020, SOL tokens started trading at around $0.75 per coin. Their price doubled throughout the year. They didn’t get much attention until this year.
At the time of writing, it’s in 13th place on the crypto list. It’s now worth $33.84. Soon, it may rise to the top tens, inching closer to ETH.
How does Solana work?
The SOL network focuses on smart contracts and decentralized applications (dapps). It’s a proof-of-stake (PoS) blockchain too. If you noticed, these statements might describe ETH too.
As we said, Solana makes these features faster and easier. It uses unique systems to make it happen. See some examples of how they work below:
- Consensus mechanism – Solana uses Delegated-Proof-of-Stake, a better version of PoS. Ethereum also has this feature, but Solana is thousands of times faster! SOL token holders may become validators who process transactions and earn rewards.
- Proof-of-History (PoH) – This makes transactions faster in the SOL network. It puts timestamps for each one, enabling nodes to have a “schedule” for them. As a result, it reduces the time needed to confirm blocks in the network.
- Tower BFT – This is an improved version of the Byzantine Fault Tolerance system. It speeds up confirming transactions by making it easier for validators. Other cryptos like NEO have it too.
It has other important systems. We will take too long to discuss all of them, though. Instead, we will talk about its native cryptocurrency called SOL tokens.
How do SOL tokens work?
#SOL (Solano) gains 35% in last 7 days 📈📈
Right now it's just few cents away from $40 mark as the Smart contract Platform lead Crypto recovery💪#Solano #CryptoNews pic.twitter.com/rXMil6Q627— DYD CRYPTO SHARK 🦈 (@dydcrypto) June 5, 2021
Solana coins are what are known as utility tokens. They serve important roles in the Solana network. Read below to find out what they are below:
- Paying for SOL transfers and smart contracts
- Rewarding validators
- Allowing stakeholders to earn more SOL tokens
You may buy some at crypto exchange platforms like Binance. If you want to earn extra SOL coins, try staking. You’ll need to have a crypto wallet that enables it, such as Trust Wallet.
Staking means leaving your coins to a validator. These are also SOL token holders who perform the task we mentioned earlier. After giving them some coins, you’ll receive more later.
If you plan on staking, choose the right validator. This will determine the amount of staking fees you’ll pay. More importantly, this helps you avoid losing your coins to a bad one!
You can be a validator too. Click here to see the tools you need. Once you have them, you’re ready to be part of the Solana network! You get to earn more coins too!
The Solana network also burns some of its SOL tokens. Back then, there were 500 million Solana coins. Now we have around 488 million. Expect to see fewer coins in the future.
This may seem silly for some people. After all, why would you get rid of assets? Yet, many cryptos do it to prevent inflation. Having fewer SOL tokens retains their value.
Should you invest?
Having great features doesn’t always mean an asset will perform well. For example, Bitcoin Cash (BCH) is better and faster than the original. Yet, the big BTC is still the king of crypto!
Many of the latest cryptos lack widespread adoption. In other words, there aren’t a lot of companies using them. If they aren’t interested in the coin, why should you be?
This is where Solana outshines its competition. The Solana ecosystem lists so many companies and services that use SOL tech. You’d have to scroll a bit longer if we cited them all here!
More importantly, Solana recently had projects with USDC and USDt. It recently partnered with USDC company Circle. Meanwhile, USDt will have technical integration with Solana.
These are the two most popular stablecoins right now. This is a big deal since this helps investors buy and sell cryptos. Let us explain for a moment.
The main problem with cryptos is their prices. They go up and down almost every second. Stablecoins maintain a value close to a fiat currency, often the US dollar.
Let’s say you want to buy BTC with your ETH. You may turn the ETH into USDt first. Then, you may buy bitcoin using USDt. This is crucial if you want to buy or sell at a certain price!
If Solana is closely connected to the biggest stablecoins, it has a good chance for long-term yields. It’s more likely to stay up in the crypto list, perhaps even take over Ethereum’s spot!
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Final Thoughts
Don’t base your first Solana investment just on this article. Read other sources about the SOL network. See for yourself if they fit your investment goals.
Some people invested in Dogecoin merely due to Elon Musk’s tweets. As a result, their coins haven’t even come close to their previous all-time high.
Also, you can find other investment options online. Check other articles from Inquirer USA to find more insights and ideas.
Learn more about Solana (SOL)
Is Solana better than Ethereum?
When it comes to features, Solana is better than Ethereum. Although, ETH still sits at #2 of the crypto chain. It might be best to invest in both.
Why is Solana so fast?
Solana gets its speed from unique features. These include proof-of-history and Tower BFT. You may read more about these features on the Solana website.
Is Solana a good coin?
Right now, it’s likely a good buy for investors. It has many uses, specifically for stablecoins. What’s more, it’s currently #13 on the cryptocurrency list.
Disclaimer: This article is the author’s personal opinion, differing from the “official” statements or facts. All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by Inquirer.net constitutes an investment recommendation, nor should any data or content published by Inquirer.net be relied upon for any investment activities.
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