Solana has been trending due to consecutive weeks of price increases for its SOL token. At this point in time the price is from SOL traded at around $ 207, up 11,400% from less than $ 2 in January. As for its current value, Solana is one of the Top 10 cryptocurrencies by market capitalization with around 60 billion US dollars, the Dogecoin (DOGE) snatching sixth place. according to Cointelegraph Markets.
One of the possible factors behind this upward momentum is that Investment fund led by Andreessen Horowitz and Polychain in June. Solana received $ 314 million to be used to advance its distributed finance (DeFi) technology. In particular lThe investment took the form of buying SOL coins instead of traditional stocks.
Another big reason for Solana’s SOL price boom is the announcement of its fourth hackathon, slated for October 8th. The hackathons are aimed at developers whose projects are taking part in a competition to get the chance Win cash prizes and seed capital opportunities. This has been seen as a positive move for Solana since it could help you make better use of your technology.
With the advancement of Solana, experts can’t help but compare it to a similar programmable blockchain: Ethereum. Many have come to say that Solana could be one of Ethereum’s killers, competing with Polkadot, Avalanche, and Binance Smart Chain.
What is Solana?
Solana is a huge blockchain network that can implement smart contracts. Founded in 2017 by Anatoly Yakovenko, former Qualcomm Chief Engineering Officer Solana is presented as a solution to the expansion problems of Bitcoin and Ethereum. Two years after it was founded Solana raised $ 20 million in a Series A investment round led by Multicoin Capital.
While Bitcoin (BTC) is widely accepted as a form of peer-to-peer money, Ethereum, on the other hand, is the platform to turn almost anything into a peer-to-peer system. Solana, with its specialized contracting capabilities and infrastructure, falls into the same category as Ethereum, which brings several other proposals with it.
Ethereum is still the best option for building decentralized applications (DApps) and implementing smart contracts, but there is no denying that it is riddled with legacy issues that you will try to perfect over time. Due to the lack of adaptability, users sometimes have to pay noticeably high service fees. Although the transition to Proof-of-Stake (PoS) is already underway and these fees are expected to be reduced by increased transaction performance through blockchain applications, it is not expected to fully merge with the Ethereum mainnet before the end of 2021 or 2022. This is because the beacon blockchain coordinates all of the shards It’s still in the testing phase but will be available in December 2020.
Secondly, Solana has already built in a PoS structure as a consensus mechanism. The most important innovation, however, lies in its Proof of History (PoH) protocol. It can be difficult for verifiers in a PoS system you can find the chronological order in the incoming transaction blocks. The way PoH avoids this is to create a historical record that is cryptographically checks the timing between two events.
Essentially, each Solana validator maintains its own “clock” that checks the order of the event and has a hash of the passage of time. Hence it creates a sequence of hashes that are achieved through a verifiable delay function. Yakovenko described it in 2018 as “a way to encode time as data”.
In other words, Solana can process transactions as they occur instead of waiting for a block to be filled, which can be a long process. This is how Solana can be more scalable and process more transactions than some other blockchains.
Apart from this, Solana also includes a block propagation protocol called Turbine, which breaks important data into bits that can then be sent to nodes faster without consuming as much bandwidth. Solana also implements Tower BFT, an expanded version of the practical Byzantine fault tolerant system from other delegated proof-of-stake blockchains. Tower BFT also complements PoS as it acts as a gatekeeper for the network.
An Ethereum Killer?
Although Ethereum is the top network with 7,000 nodes and 90,000 validators, compared to 600 nodes and 1,000 Solana validators, Solana is still considered an “Ethereum killer”. Much of it is due to how their innovations Fix perceived weaknesses in Ethereum.
Due to the PoH consensus, in which the validators keep their own clock, the verification of transactions is interrupted, since the nodes do not have to turn on their processing capacity in order to verify different time stamps. This improves the speed at which transactions are processed. Solana claims it can process up to 60,000 transactions per second, which is far from what Ethereum and even Bitcoin, Visa and XRP can offer together.
In addition, the transaction costs are significantly lower. As mentioned above, One of the biggest drawbacks for Ethereum users is that gas fees can be volatile and absurdly high. Users sometimes pay up to $ 65 to complete a transaction. Last year, a user even paid $ 9,500 just to trade $ 120 on Uniswap At Solana, fees per transaction can fluctuate by nearly $ 0.00025, a world apart from the fees of Ethereum.
Join the NFT trend
This year Everyone is talking about non-fungible tokens (NFTs) as artists, investors, collectors, traders and celebrities have started to try their hand at this blockchain-based movement. Most of the NFTs continue to work on the Ethereum network. Nevertheless, Solana is slowly trying to capture a piece of this emerging market.
A new NFT project called “Degenerate Ape Academy” has since been a test of its skills the entire collection of 10,000 monkeys sold out in just eight minutes. This worked SOL’s price will skyrocket to $ 53.70 on August 15, from $ 44.11 it was trading the day before.
Solana’s NFT market, Solanarttracking sales of NFT collections shows this Ape Academy’s degenerate NFTs are the dominant force in Solana NFT sales. The collection already has a volume of 765,000 SOL tokens, which would translate into a couple $ 122 million at the current price.
In view of Those who previously enjoyed doing transactions on the Ethereum network might be tempted to switch sides entirely. Nathan Ross, former marketing director for dating app Hinge, tweeted on how Solana is better for NFTs as it’s faster, cheaper, and easier than Ethereum.
Then there’s the FTX integration with the popular crypto derivatives platform that it launched. its own NFT market on September 6th.
Can Ethereum compete with Solana in the long term?
The question now is: can Solana outperform? the blockchain platforms of the two big altcoins? Ethereum 2.0 is not expected until next year as phase 2 of the update schedule runs until the end of 2021 or early 2022. With the update, proponents believe Transactions on Ethereum could be a lot cheaper, even reaching 100,000 per second or more.
Nevertheless is heYou can keep up with Solana’s design architecture as it is theoretically scaled according to Moore’s Law. This means that as computers get faster, Solana will get faster over time. Basically Solana is preparing for the future through its growth skills. If that turns out, is Solana to blame for hitting Ethereum?
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