What is SOL in Crypto?
Like Bitcoin and Ethereum, Solana (or SOL) is a digital currency that exists exclusively online. Initially released in 2019, a single SOL coin now trades for up to $200.
Ultimately, it aims to improve blockchain scalability through proof of stake consensus and proof of history. Today, Solana is among the top ten most popular cryptocurrencies in circulation. Find out how it works and whether it’s worth your investment.
What Is Solana (SOL)?
Solana – known as SOL crypto as an individual unit – is an open-source native cryptocurrency that achieves breakneck transaction speeds without sacrificing decentralization. It is the fifth-largest cryptocurrency, with over $66 billion in market capitalization.
How Solana Works
For crypto users, Solana boasts an impressive number of scalable applications for crypto users that include the following.
- Cryptocurrency: Make crypto payments with Solana and your preferred hardware wallet.
- Decentralized finance: Use permission-less payments that skirt centralized or government control.
- Non-fungible tokens (NFTs): Buy and sell NFTs.
- Proof of history approach: Timestamp any valid transactions to prevent re-ordering. Create a robust censorship-resistant network.
- Digital applications: Use Solana alongside gaming, social media, investing, and finance apps.
What Makes Solana Unique?
Solana’s unique selling point lies in its ability to solve the blockchain trilemma, which purports three primary challenges: decentralization, scalability, and security. Thanks to a combination of proof of stake (PoS) and proof of history (PoH) functionalities, Solana is more usable, scalable, and dependable.
How To Buy And Stake Solana
Good news for those who like to stake their cryptocurrencies: you can earn rewards by helping secure the Solana network. You can even stake Solana on particular exchanges and personal wallets as a beginner.
A few wallets you can stake Solana on include:
You can also stake Solana on these exchanges:
You can purchase Solana on these cryptocurrency exchanges:
Don’t want to purchase on centralized exchanges? Some decentralized options for buying Solana include:
Solana vs Other Cryptocurrencies
Compared to rival blockchains, Solana is more scalable. Its blockchain transaction speeds are impressive, thanks to assigning only one leader node that sequences messages between other nodes.
This PoS mechanism reduces Solana’s workload and transaction times even without centralized time sources. At the moment, there are 1,684 Solana validator nodes.
In addition, Solana hashes transaction outputs, using these as inputs for upcoming transactions. By doing this, Solana becomes more scalable and usable.
Is Solana Better Than Ethereum?
Join a discussion about SOL tokens, and you’re likely to compare them to Ethereum. Both run on smart contract capabilities, which can run state-of-the-art decentralized applications like decentralized finance (defi) and non-fungible tokens (NFTs).
However, Solana boasts an evident advantage in transaction times, processing up to 50,000 TPS with transaction fees as low as $0.00025. In comparison, Ethereum’s current prices are at a record $70 and can process only 15 TPS.
Should You Invest In Solana?
Crypto users who have invested in Solana from the beginning are likely to have already made significant money. However, you’ll have to look beyond recent gains to get the best investment advice.
Like most crypto exchanges, Solana has no backing from fundamental assets. Instead, traders will have to rely on the idea that they can sell additional coins to other traders for a higher price in the future.
If you’re confident in investing in a cryptocurrency with cheap transaction costs and scalable applications, expect Solana Labs to release 489 million tokens soon. There are currently 260 million tokens in circulation right now.
Closing Thoughts About Solana
While Solana has boasted impressive success, remember that its blockchain developments are still susceptible to centralization. In addition, while becoming a validator is certainly possible, it will be hard to do because of Solana’s current lack of computing resources.
Ultimately, Solana remains a significant competitor against rival blockchains and continues to grow in popularity. If you decide to invest in its blockchain platform, don’t invest any money you can’t afford to lose.
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