What is Solana, in a Nutshell?
Solana is a blockchain network launched in March 2020 to support the development of smart contracts and decentralized applications. The innovation of the Solana blockchain is in its security algorithms; for one part, this is a proof-of-stake model, which is nothing new — with it, validators can verify transactions based on how many coins they have. On the other hand, a previously unseen proof-of-history algorithm allows adding a timestamp to each transaction for much easier and quicker verification.
Ultimately, the developers claim that Solana is the world’s fastest blockchain, where a new block is generated every 400 milliseconds, and has much lower fees than Ethereum, Solana’s main competitor.
In 2021, Solana has been one of the top performers in the alternative payments space, becoming the fourth-biggest digital currency in the world, right after the top three including Bitcoin, Ethereum, and Binance Coin. As of November 2021, Solana was valued at over $64 billion, and its investor community, as well as the ecosystem of applications, keep growing.
To help you decide if it’s worth investing in Solana, we came up with the benefits Solana undeniably guarantees to each business that joins the pool of investors. Here they are.
Solana’s Benefits for Businesses
Automating your Workflows
As in the case of Ethereum, Solana was built with a focus on allowing users to create decentralized applications within the system. Most importantly, users can set up smart contracts for autonomous operations like automatic issuance of payments or data sharing at a predefined time once certain conditions are met.
Once again, Solana claims itself as the world’s fastest blockchain without sacrificing security along with that. On Ethereum, security has always been an obstacle on the way to fast speeds as complex security algorithms slowed down processing times. On Solana, on the other hand, this is not the case, which gets people so excited about its technical capabilities.
Above all, Solana is cheaper than its competitors, which is a point for you to consider if you are looking for a blockchain solution that will be a good value for money. Currently, you need to pay around $0.00025 per transaction for so-called “gas fees” that go to miners in the network. This is considerably low, especially compared with Ethereum whose fees are $53 on average and can go higher.
Transaction costs remain a debated topic in the blockchain community. The world simply isn’t ready to spend hundreds of dollars on gas fees. This is particularly senseless, for example, when it comes to purchasing NFT assets or fractions of them in bulk. NFTs are one of the primary use cases for Solana, and everything there is just set for trading them. Low costs make Solana a perfect place for trading NFTs for gamers who are mainly presented by the younger audience that just can’t afford to spend much on transactions. Low transaction fees on Solana allow for affordable NFT trading with a lot of transactions that happen because of the rapid gameplay.
The role of community in the blockchain world is often underestimated. However, it encourages the adoption of blockchain at a global scale leading to more versatile use cases.
Already, Solana does a great job of building its community by organizing hackathons where fresh-starters and seasoned developers exchange ideas, and Solana creators incentivize the most ambitious, in their view, projects to build them on top of Solana. What’s more, Solana broadened its reach to Ethereum projects, allowing easily migrating those to the Solana network.
Major Solana Applications you Should Know About
Solana has its own digital currency and therefore its own token standard that supports the use of DeFi applications. Mainly, Solana tokens are used to pay for transaction fees in the Solana network. Also, the Solana token secures the network. Token holders can support the network by becoming network validators or by delegating their tokens to another validator.
Users can build their own Solana-based DEX or use one of the existing solutions from its ecosystem to trade or exchange assets from other blockchains. Alternatively, they can create their own tokens (if a corresponding DEX allows doing it). Certain DEX platforms such as Serum give large flexibility and control over trading with the automated order-matching feature.
Solana offers a range of solutions allowing users to participate in public token trades. In order to participate, typically, a user needs to stake a particular token. The more tokens staked and the longer the staked period, the more opportunities to invest in token sales. Thanks to embedded distribution mechanisms, all users have equal and fair opportunities to participate in token launches.
For content consumers, there are decentralized Solana-based social media solutions where users can contribute to and access content completely anonymously. Content distribution solutions such as Media Network even don’t require users to sign up or pass a KYC check to access the content. Also, the solution allows saving up to 99% of bandwidth costs by using p2p browser functionality. Finally, users have a frictionless experience with the platform thanks to open-source functionality for media viewing, page caching, web serving, load balancing, and more.
There are already several games in the Solana ecosystem, yet they are in the early stages of development. For example, Star Atlas, a blockchain-based multiplayer game where players can compete for resources and entire territories by completing in-game missions and taking part in epic battles. The game also has an NFT marketplace where players can trade resources, equipment, vehicles, and other game assets.
Is Solana Worth your Investment?
The decision of whether to invest is entirely up to you. Thanks to its undeniable benefits, Solana is a subject of high interest of traders and developers. However, it isn’t backed by any stable, fundamental assets, unlike most digital currencies. High optimism and speculation of traders are the main pillars on which Solana stands. At this point, you may either speculate it yourself or invest in development companies that now benefit from the growing interest in Solana.