The theory that allows blockchains to work is by no means new, this basic idea dates way back to 1982. But until the creation of Bitcoin in 2008, there had been no real-world implementation of a blockchain protocol. Bitcoin proved that blockchains could have practical applications. Later, Ethereum proved that smart contracts could be written into a blockchain, and they, in turn, allowed the creation of decentralized applications, or dApps.
These blockchains are important because of the pioneering groundwork they laid out, but they are far from perfect. Neither of them has the capacity (in transactions per second) or speed necessary for mass adoption. Neither six transactions per second (Bitcoin) nor 15 (Ethereum) are a match for payment processing platforms like Visa, which can handle about 1,700 tps. But that doesn’t mean blockchains can’t have the capacity. Once the groundbreakers proved they could work, other projects could come in and improve where the first blockchains were weak.
One of these newer high-capacity blockchains is Solana. But just what is Solana trying to solve? Can it really reach the capacity needed for mass adoption? How does it work? Read on for a full Solana Review.
Solana is a smart-contract capable blockchain created in 2017 by developer Anatoly Yakovenko, an expert on operating systems and compression protocols, who was then working at Dropbox. Yakovenko's goal was to develop a blockchain that could deal with the throughput issues that were already evident on the Bitcoin and Ethereum blockchains.
Both of these use the Proof-of-Work consensus mechanism, which are too slow for their native tokens to achieve mainstream use as currencies and have the problem of very high transaction fees when their networks are busy. So he and fellow developers Eric Williams and Greg Fitzgerald invented a series of services and protocols to solve the issues that were affecting the earlier blockchains.
The result of their efforts was Solana, which currently supports about 65,000 tps with a latency of less than half a second.
Who Is Solana for?
Decentralized applications (dApps) have the potential to be major game-changers in many industries as a high-capacity blockchain. DeFi applications are already reshaping the financial landscape, but blockchains can also have great advantages in education, securities, commerce, legal, and a lot of other sectors – and all that change starts with building dApps to offer the services that those sectors need.
These dApps need to be built on a platform. Ethereum was the first blockchain to offer smart contract capability and is still the largest dApp platform with over 2,700 applications running right now, but Ethereum has problems with speed, capacity, scalability, and very high fees when the network is congested.
Ethereum’s developers are aware of these issues and will address them when the 2.0 version of the blockchain launches, but there is still no set date for that release. In the meantime, dApp developers are looking to other platforms.
Solana has the technical chops to satisfy a lot of dApp developers. Its current capacity of about 65,000 transactions per second is four times higher than that of a global payment processor – and it can be even higher. Experts have calculated that if Solana was deployed on a 40 Gigabit connection, it could handle over 28 million transactions per second. And it’s not just the speed.
Solana’s architecture makes it far more scalable than other platforms, and transaction fees are significantly lower as well. In a nutshell, dApp developers looking for a modern, secure, fast, and scalable platform to run their applications would definitely want to consider Solana.
Overview of Solana's Features
We’ve already covered that Solana is a new-generation high-capacity blockchain and has greater transaction speed – all thanks to a series of protocols and services that were created specifically for this platform. These are sometimes referred to as “Solana’s Eight Inventions,” and a Solana review wouldn’t be really complete without a quick look at them:
- Proof-of-History: Ethereum and Bitcoin use a Proof-of-Work (POW) consensus mechanism. POW historically had problems creating a system-wide clock to register when each event happened. Proof-of-History uses cryptography to create timestamps for each event, and these timestamps are verified against a system clock running on the nodes. This system can work very quickly to record and verify exactly when each event happened.
- Tower BFT: One of the issues with distributed systems like blockchains is that they can be prone to errors due to a failing component, like a server, transmits faulty information, and there is no way to make sure the component was actually failing or not. This kind of error is known as a Byzantine Fault. Every blockchain has mechanisms to protect it against these errors and so are said to have Byzantine Fault Tolerance or BFT. Solana created a special kind of BFT, called Tower BFT, that is specifically optimized for working with the POH consensus mechanism.
- Turbine: On some blockchains, the problem is that transmitting data to the nodes is slow because the amount of data can be huge. Solana developed a protocol called Turbine to address this issue. Turbine breaks that data that needs to be sent into a bunch of smaller data packets that can be transferred much faster.
- Gulf Stream: This is the protocol that’s mainly responsible for Solana’s high transaction capacity. It greatly reduces confirmation and leader switching times.
- Sealevel: This is a transaction processing engine that improves Solana’s scalability. It allows several smart contracts to run simultaneously.
- Pipeline: Solana uses pipelining to make accelerate transaction validation. This means that different streams of data are spread around different servers so they can all be processed at the same time.
- Cloudbreak: This is another protocol that contributes a lot to Solana’s scalability. It’s a data structure optimized for reading and writing information on distributed networks.
- Archivers: Not all nodes in a blockchain are equally powerful. They can be anything from very powerful mainframe-type computers to low-end laptops. On many blockchains, every node has to contain an exact copy of the entire blockchain. While this is great for decentralization, it’s not so great when it comes to speed. Solana does things a little differently. It identifies the least powerful machines and uses them for data storage, which doesn’t require much processing power, leaving the more powerful ones for more complex tasks like transaction validation and executing smart contracts.
Another important feature of Solana is that it uses clusters as an important aspect of its software. A cluster is a small group of computers that work together as one functional unit. Clusters can be used for different purposes on the platform, increasing the efficiency of the blockchain as a whole.
The Solana (SOL) Token
The Solana blockchain is powered by the Solana Token (SOL ticker symbol, but don’t confuse it with Sola Token, which uses the same ticker symbol). This cryptocurrency has performed amazingly well this year. 1 SOL was worth 1.8 USD on January 1st and is trading at 45.42 USD at the time of writing. That’s an increase of over 2,400% in just under five months!
There is a total of 493,886,983 SOL tokens in existence, of which 269,856,623 are in circulation. SOL has a market cap of just over 12.2 billion USD and a 24-hour trading volume of almost 1.6 billion USD.
Alternatives to Solana
The Solana developers have done a great job creating a platform that solves the speed and capacity problems, but they are hardly the only ones to have noted the problem and create solutions for them.
There are other high-speed, high-capacity dApp platforms available, and some of them are already hosting some pretty good applications ranging from financial apps to social media platforms and games. Some alternatives to Solana include EOS.IO, Binance Smart Chain, Cardano, Elrond, and TRON.
Bitcoin and Ethereum were important steps for blockchain technology. They proved that the tech could work in the real world and that traditional services in the industry of finance, among others, could be offered without the need for centralized regulators like banks. However, importantly, these two early blockchains can't satisfy the demand for mass adoption on a global scale.
Other developers can build on what we have all learned from the pioneers and create newer, faster, more powerful platforms and there are quite a few of them already deployed or in development. One of these faster platforms is Solana. With a capacity of 65,000 transactions per second, a latency of only 400 ms, low fess, and very scalable, it certainly has the potential to be a great place to build and run dApps.
In this Solana review as a high-capacity blockchain, we've given you the fundamentals to understand the benefits of this platform, and we think you'll agree that it's at least worth looking into if you're planning on launching a dApp. Even if you're not, you can still invest in Solana by purchasing some SOL tokens. The dramatic increase in value of the Solana cryptocurrency suggests there is interest in Solana, and plenty of experts are saying that 2021 might just be the year it really takes off.
But what do you think about Solana? Would you consider it as a platform for your dApp as a high-capacity blockchain? Are you interested in buying some Solana tokens? Let us know in the comments.
- Transaction Speed
- Network Capacity
- Low latency: 400 ms
- High capacity: currently 65,000 tps
- Scalable: could go as high as 28 million tps
- Low transaction fees
- SOL token performing well lately
- dApp ecosystem is still small