Solana

Launched in March 2020 by the Solana Foundation, based in Geneva, Switzerland, Solana seeks to improve scalability by combining proof-of-history (PoH) consensus with the blockchain's underlying proof-of-stake (PoS) consensus. This approach has attracted interest from a diverse range of traders, from small-scale individuals to institutional entities. Solana claims it can process around 50,000 transactions per second. Like Ethereum, Solana is both a cryptocurrency and a flexible platform for running decentralized apps (dapps) or minting NFTs, with its cryptocurrency (SOL) available to buy and sell via exchanges like Coinbase.

Solana operates using a combination of proof-of-history (PoH) and proof-of-stake (PoS) consensus mechanisms. The proof-of-history component is the main element of the Solana protocol, responsible for the majority of transaction processing. PoH records successful operations and the time elapsed between them, ensuring the trustless nature of the blockchain. The proof-of-stake consensus acts as a monitoring tool for the PoH processes, validating each sequence of blocks it produces. This combination of two consensus mechanisms makes Solana a different approach in the blockchain industry. Solana's protocol is designed to serve both small-time users and enterprise customers alike.

Solana's primary use case is to facilitate the creation of decentralized applications (DApps), with a particular focus on decentralized finance (DeFi) solutions. Its different approach in the blockchain industry allows for significantly decreased validation times for both transaction and smart contract execution. This has attracted a lot of interest, particularly from institutional entities. Solana's protocol is designed to serve both small-time users and enterprise customers alike, aiming to make decentralized finance accessible on a larger scale.

The idea and initial work on Solana began in 2017, but it was officially launched in March 2020 by the Solana Foundation, headquartered in Geneva, Switzerland. The most important person behind Solana is Anatoly Yakovenko, whose professional career started at Qualcomm, and who teamed up with his Qualcomm colleague Greg Fitzgerald to found a project called Solana Labs. Attracting several more former Qualcomm colleagues in the process, the Solana protocol and SOL token were released to the public in 2020.

When Bitcoin was invented more than a decade ago, it solved a tricky problem: how to make it possible for strangers anywhere in the world to make financial transactions over the internet without financial intermediaries and payment processors like Visa or Mastercard assisting the transaction. The technology that makes decentralized transactions possible — and which created the universe of cryptocurrencies we now know — is called a blockchain. But blockchains previously had one major downside compared to centralized networks like credit-card companies: they're slower. Bitcoin typically processes around than 7 transactions per second in 2023, compared to tens of thousands for Visa's network. Solana is one of many new crypto solutions aiming to make crypto networks faster and more scalable compared to other cryptocurrencies such as Ethereum. It uses a suite of clever technologies, including a novel mechanism called "proof of history."

The actors that support securing the network are called validators. Participants stake their own SOL to become a validator in exchange for a chance at earning SOL and a cut of fees. (Becoming a validator also requires a fairly high level of technical know-how.) SOL also serves as a "governance token," meaning that holders are also able to vote on future upgrades and governance proposals submitted by the Solana community.

Like Ethereum, Solana is a computing platform that can interact with smart contracts. Smart contracts power a wide range of applications, from Non-Fungible Tokens (NFT) marketplaces and Decentralized Finance (DeFi), to games. The crypto app ecosystem on Solana supports billions of dollars worth of assets as of 2023. There are risks associated with emerging crypto applications and technologies, from extreme volatility to the potential for undiscovered smart contract bugs to be exploited. Especially as a beginner, do your research and don't risk money you can't afford to lose.

You can buy, send, and receive Solana using various crypto exchanges and wallets, including Coinbase and Coinbase Wallet.