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What is Solana and Why is it a Big Deal?

Solana is a cryptocurrency that was created in April 2021. In 2021, the cryptocurrency’s remarkable price increase attracted the attention of a large number of investors, propelling it into the ranks of the top cryptocurrencies in terms of market capitalization.

But what exactly is Solana? How does it work? Let’s learn all of that and more in this article!

What is Solana?

Solana is a blockchain platform that was built with the goal of hosting decentralised apps. It is currently under development. As a result, various comparisons have been made between Solana and other blockchains such as Ethereum or Cardano. Solana is an “open-source” project that is now administered and developed by the Solana Foundation, which is situated in Geneva, Switzerland. The Solana Foundation is a non-profit organisation dedicated to promoting sustainable development!

Initially, though, the blockchain was invented in San Francisco, California, in the United States of America. Solana is gaining popularity in the cryptocurrency market because to the fact that it is a significantly faster and less expensive alternative to Ethereum. Solana, in contrast to Ethereum (before to the move to Ethereum 2.0), was a blockchain that validated transactions using the proof-of-stake protocol, rather than the consensus mechanism.

It differs from proof-of-work, which is used by cryptocurrencies like Ethereum, Bitcoin, and a number of others. Slowly but steadily, the proof-of-stake protocol is gaining favour in the digital community, mostly due to the fact that it is far more environmentally friendly than the proof-of-work protocol, as it consumes significantly less energy than the latter.

What is the Future for Solana?

The blockchain, according to a number of Solana investors, will emerge as the dominant technology in the fields of decentralised financial services, decentralised video games, and non-financial technologies.

While demonstrating to investors and the market that Solana’s growth is not just dependent on the popularity (or hype) of cryptocurrency, but rather on its innovation, the company’s growth has been slowed.

Even while the future of Solana appears bright and the community surrounding the platform continues to develop, the introduction of Ethereum 2.0 complicates matters and will most certainly have an impact on the present market capitalization of the cryptocurrency.

What Should you Buy between Solana and Ethereum?

As you are aware, Ethereum is presently the industry leader in smart contracts, with several tens of thousands of active nodes, compared to only a few thousand for Solana, which is the second-largest cryptocurrency. Several investors, on the other hand, believe that Solana’s technological breakthroughs will be the “killer” of Ethereum.

Solana, in contrast to the “proof-of-stake” protocol, completely rewrote the rules of how blockchains operate by developing the “proof-of-history” protocol. This gives validators the ability to be accountable for their own “blocks.” Because nodes are not need to expend energy in order to verify transactions, transaction verification times on the blockchain are reduced. As a result, the Solana network is capable of validating up to 60,000 transactions per second. Yes, yes, 60,000 transactions!

In terms of transactions approved per second on the network, this enormous number of transactions per second far exceeds the combined validation capacities of Visa, MasterCard, Ethereum, and Bitcoin combined. Furthermore, transaction fees on Solana are significantly lower than on Ethereum. Indeed, Ethereum is infamous for its massive “gas fees,” which may amount to several tens of dollars each transaction and can reach hundreds of dollars. On Solana, the cost of transactions is a fraction of a cent each transaction, or even less!

How to Invest in Solana?

Now that you’ve learned what Solana is and how it works, let’s talk about where and how you can get your hands on some.

Step 1: Decide on a Reputable Bitcoin Trading Platform!

Making the decision on a cryptocurrency exchange is a critical first step for any new investors who are interested in getting into the cryptocurrency market. Listed below are some factors that, in our opinion, should be considered while selecting a cryptocurrency exchange:

  • Fees: Fees vary from exchange to exchange and according to the different types of transactions that are carried out on each exchange (deposits, withdrawals, transfers). Transaction fees can be extremely expensive. When selecting your first cryptocurrency exchange, exercise caution and ensure that the trading strategy you intend to employ is inexpensive and will not result in a loss of money in a void of liquidity.
  • Security: Before putting money on an exchange, research the exchange’s history, including any hacking incidents. In addition to having a strong track record, look for an exchange that has a good security protocol and publishes its strategy of action in the event of a hacking incident.
  • Convenience of use: Although this is not the most significant consideration, it is nevertheless crucial to ensure that the exchange you choose is straightforward to use.

Step 2: Open a Bank Account and Make a Deposit of Money!

Finally, the second and final step is to open an account on the chosen exchange and make a deposit of funds into that account.

You will frequently be required to verify your identity in order to be able to purchase and trade cryptocurrencies, so be prepared with a photo of your ID and, in some cases, evidence of residency.

What Wallet Should you use for Solana?

We’ve compiled a list of our favourite external wallets for Solana:

a. Solana Wallets for your Smartphone

If you’re planning on using your smartphone to host your wallet with your Solanas, you’re in luck, as there are plenty of great options out there. Many examples can be found here:

1. Trust Wallet

Trust Wallet is a mobile application that is available for both Android and iOS devices that allows users to send and receive SOL tokens.

2. Exodus

Exodus is a cryptocurrency wallet for portable devices (as well as for laptops) that allows users to receive, send, and exchange a large number of various cryptocurrencies. It also offers a technical support staff that is available around the clock.

b. Wallets for your browser

In the event that you’d want to keep your wallet directly in your browser, here are several common alternatives:

1. Phantom

Phantom is a very simple browser plugin that allows users to save Solana tokens in a safe and secure manner. Along with sending and receiving tokens, you can also connect to and use any decentralised application (dApp) running on Solana’s platform via the Phantom protocol.

Phantom is now available for download for the following browsers: Firefox, Chrome, Brave, and Edge.

2. SolFlare

SolFlare is a slightly less popular alternative to Phantom that provides its customers with a “non-custodial” wallet that they may access from anywhere in the world. There are numerous opportunities for asset growth on the Solana platform available through the extension’s wide functionality, which includes staking, swapping, and many other options.