Solana review: An in-depth analysis of crypto coin

WRITTEN BY Abel Stokes 104 views date-icon 2024-05-14 10:15:00

At the moment, there are more than 25,000 cryptocurrencies. Most of them claim to offer something unique. Many of you know that most cryptocurrency projects fail to fulfill their promises or offer nothing special at all.

Solana does not fall into this category. It is a cryptocurrency project with a radically different approach to how the blockchain works. It focuses on a devilishly simple element that makes you wonder why you didn't think of it sooner: time. After all, implementing a decentralized clock on a cryptocurrency blockchain is far more efficient than anyone imagined.

The Solana story

The Solana story begins on the beach of the same name in sunny California. Solana Beach is just 30 minutes north of San Diego, and Anatoly Yakovenko, the founder and CEO of Solana (a cryptocurrency project), has worked in telecommunications for most of his life. During his 12 years at Qualcomm, Yakovenko helped develop the technology used in our smartphones.

Initially, Yakovenko wasn't very interested in Bitcoin and was only mildly interested in Ethereum. But it didn't take him long to mine Bitcoin by developing a deep learning computer network; in 2017, in his book Caffeine Fever Dreams, he discovered that Bitcoin's SHA256 hash function was being used in the cryptocurrency blockchain to create distributed clocks. He realized he could create a clock.

Yakovenko hypothesized that using transaction timestamps could greatly improve scalability without compromising the security and decentralized nature of cryptocurrency blockchains. He knew this was possible, as Google and Intel had already implemented similar, albeit centralized, technology in their databases. The revolutionary Solana document was quietly released in November 2017.

What Solana is

Solana is a high-performance cryptocurrency blockchain that supports smart contracts and decentralized applications. It uses a proof-of-stake consensus mechanism with low barriers to entry and timestamped transactions to maximize efficiency.

This allows Solana to process up to 65,000 transactions per second (TPS). This compares to 7 TPS for Bitcoin and 30 TPS for Ethereum. Unlike other similar projects such as Polkadot and Ethereum, Solana is a single blockchain (layer 1) and does not delegate transactions to other related chains (layer 2).
The Solana team developed the blockchain with a long-term perspective in mind. Founder Anatoly Yakovenko has a background at Qualcomm, where he saw telecom technology nearly double every year.

Solana Blockchain 

Unlike other PoS cryptocurrencies, there is no minimum investment required to become a Solana blockchain node. For example, Ethereum node operators need to spend 32 ETH. Naturally, the number of block rewards you receive is proportional to the number of SOL tokens you put on the line. Although leader selection is pseudo-random, the number of SOLs you bet on the line also affects your chances of becoming a block-generating leader. Rogue nodes will have their stakes reduced, and the reduced funds will be added to the block generation reward.

Solana Innovation 

Solana's Sealevel technology is the world's first technology that can process multiple smart contracts simultaneously at blockchain execution time, which means the blockchain will process simultaneous transactions more efficiently. Gulfstream can recognize a small number of upcoming leads and start accumulating transactions before the blockchain generation begins.

Technical overview 

The key to Solana's performance is that different tasks are distributed to different nodes in the network as needed to optimize speed, and all transactions are time-stamped to ensure they are correct. In other words, one cluster of nodes (Solana Cluster) is responsible for hosting DeFi platforms such as Uniswap, and another Solana Cluster is responsible for handling microtransactions that take place in the Decentraland virtual world. This makes Solana scalable, fast and secure without compromise.

Existing Solana node clients are limited in their ability to process concurrent transactions, which limits the number of transactions that can be processed simultaneously and results in slowdowns. In addition, the clients do not support sharding, a necessary technique for horizontal scaling, and therefore cannot scale efficiently as the network grows. These limitations create performance and scalability issues for Solana to handle growing transaction volumes over time.

Firedancer is a new independent validator client for Solana designed to improve the performance and scalability of the blockchain; a demonstration in November 2022 processed 1.2 million transactions per second and showed significant improvement. Firedancer is expected to provide redundancy, efficiency and the ability to reduce operational costs for Solana node operators.

Solana Performance

It's still early days for Firedancer, but performance tests show that Solana has what it takes to consistently outperform VISA and other blockchains in terms of transactions per second (TPS). Perhaps one of the most impressive aspects of Solana's scalability is the potential for Firedancer to exponentially improve Solana's performance across the entire network. Unlike Ethereum's fragmented network with multiple layer 2s and sidechains, there is no need to create a new scaling and sidechain solution every few years, allowing for a single Solana network.

In fact, Firedancer is such a technological advancement that technology expert Paul Baron said: "If you think about what technological advances have been made in computing power over the last 20 or 30 years, this network is definitely in the top ten. What they've been able to do is truly amazing." (Source.)

Moving towards decentralization

In the early days of Solana, the project was widely criticized for being centralized. Not only because there is a single validator node running at the protocol level, but also because the Solana Labs team is omnipotent and funded by venture capitalists. 

Following the blockchain trilemma (a project can be decentralized, secure, or scalable, but only two of these can be achieved by sacrificing the third), Solana sacrificed decentralization. Solana not only recognized this problem, but acted with remarkable speed, joining three other validation clients (Sig, JITO and Firedancer). Solana thus became the only major blockchain with multiple active validation clients, along with Ethereum.

Solana currently has over 2,000 validators generating blocks, and this number is steadily increasing along with the Nakamot factor. In fact, Solana has the highest Nakamot factor of any blockchain with shareholder proof-of-stake. Node operators control more than 33.33% of all shares in the network, which increases their risk tolerance.

As a result, we can say that this coin has every chance to rise even higher in the top cryptocurrencies in the future and confidently hold the leading position. The coin has proven to be a strong player from the beginning, so we just have to watch its development.

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