What is Solana (SOL)?

Solana is a high-performance blockchain that supports fast, low-cost, and scalable transactions. Its native cryptocurrency, SOL, currently ranks among the top 10 cryptocurrencies in the world, based on market cap.

What makes Solana unique?

Like Ethereum, Solana supports smart contract functions. This enables developers to create decentralised applications with the Solana blockchain, like a music streaming service that lets artists set their own terms or a fitness app that allows users to earn crypto for walking or running.

However, Solana is different from Ethereum in two very important ways: it has lower transaction fees and it processes transactions at greater speeds.

Solana has ensured that costs remain less than $0.01 per transaction. It can also process thousands of transactions every second, which makes it much faster than Ethereum’s 15-45 transactions per second. Ethereum may be more mature, stable, and popular, but Solana’s transaction speeds and low fees make it one of the faster and more cost-effective blockchains in the world today.

However, it's also worth noting that Solana has had a number of network outages in the past. You can learn more about Solana's network outages, during which time SOL sends and receives become temporarily unavailable on Luno. 

What makes Solana faster than other blockchains?

Blockchains are managed by many computers spread across the world. There’s no central authority saying “my version of the blockchain is accurate” or “this transaction is valid, and that one is invalid.” It’s a much more democratic process: the majority of computers need to agree on a single version of the truth, and it can take some time for them to all reach an agreement.

Strangely, something that’s difficult for all these computers to agree on is the time.

There’s an old saying: a person with a watch knows what time it is; a person with two watches is not so sure. Now imagine hundreds of computers, spread across multiple time zones, working with different internet and processing speeds. Without a centralised time-keeper, it becomes tricky to answer a basic question: did my transaction happen before or after your transaction?

Solana solves that problem with something called Proof of History. This is a mechanism that uses cryptography to definitively prove the passage of time between one blockchain event and another. Instead of relying on a hundred conflicting time-keepers, the Solana blockchain itself is a ticking clock that keeps everything in order.

With Proof of History, Solana’s transactions have their correct time built into them from the start. If everyone already knows where each new transaction belongs on the blockchain, they don’t need to spend any time coming to an agreement about that. This allows the network to focus on much more important business: confirming transactions as quickly as possible.