Solana (SOL) Coin Information and Explanation

In this post, we'll take a look at Solana, a next-generation blockchain. Solana is a blockchain project focused on network scalability and speed.

SOL is the coin used on the Solana blockchain. SOL is used to pay fees for creating transactions and calling smart contracts. SOL is currently listed on exchanges such as OKX and Binance.

Solana's Outlook and Why It's Promising

Solana was created by Solana Labs, founded in 2017 by Anatoly Yakovenko. Today, the best platform for developing smart contracts that let you build dApps using the properties of blockchain is Ethereum. The problem is that, until Ethereum 2.0 arrived, it was very slow and costly to use.

Solana is a blockchain project with a particular strength in speed. Blockchains face a trilemma: among decentralization, security and speed, emphasizing one tends to weaken the others. Solana is promising because it achieves faster speeds without compromising this blockchain trilemma.

Solana's block time is 400 milliseconds, which is unimaginably fast compared with 10 minutes for Bitcoin and 15 seconds for Ethereum.

Proof of History (PoH)

The Solana blockchain uses a method called Proof of History. As you probably already know, a blockchain basically keeps a ledger that records the order of transactions, and everyone shares that ledger. That's the core of blockchain.

However, blockchains like Bitcoin are usually very slow. That's because when each node (miner) mines BTC, it has to add its own time and date, broadcast it to the other nodes, and have them verify it together. And since someone could record a false time and date, the validity of the timestamp also has to be checked.

Solana hashes transactions through the SHA256 hash function. A function is something where you put in A and get out B. When a transaction is hashed and fed into this function as the input, it produces an output that is very hard to work out. Solana uses the previous output as the next input. This way, the order of the hash values = the order of the transactions. As a result, it cuts down the hassle of checking timestamp validity.

To sum up, it ultimately skips the step of checking timestamps by using transaction hashes, and increases speed by processing less information in blocks more quickly.

Put simply, if traditional blockchains printed out a very long receipt and shared it with each other, Proof of History encrypts the receipt numbers, sorts them in order, and then passes them along.

One thing to note here is that Proof of History is not a consensus algorithm. It is a way of processing blocks quickly, and Solana fundamentally uses Proof of Stake (PoS).

SOL Use Cases and How to Buy

Solana uses Proof of Stake. This means you can stake SOL and earn rewards. Another use is paying transaction fees, and the SOL used for this is burned.

The best-known exchange where you can buy SOL is Binance. After signing up and logging in to Binance, you can buy Solana coins. You can also use Korean exchanges such as Bithumb or Upbit.

Solana Summary

Solana is a next-generation blockchain focused on high speed. At the same time, it is a promising project that maintains security and decentralization. Solana, which is rising fast and is now called an Ethereum killer, looks likely to keep its edge in speed going forward.

SOL, Solana's native coin, is used for paying transaction fees and staking, and its tokenomics are designed so that the circulating supply gradually decreases through continuous burning.