What is Solana Chain?
Solana is one of the most popular cryptocurrencies among more than 10,000 that currently exist. The cryptocurrency platform is called Solana, while the individual unit is called a sol.
Created by Anatoly Yakovenko, Solana operates on a decentralized computer network using a ledger called blockchain. This blockchain database manages and tracks the currency, and effectively records every transaction that’s ever occurred in it, like a long running receipt. The computer network records the transactions in the currency and verifies the data’s integrity.
This decentralized setup makes the network more robust, and users can make transactions without the need of an intermediary. Solana calls itself the fastest blockchain in the world and touts its ability to verify 65,000 transactions per second at a cost of less than a penny each.
While many people think of crypto coins as only a currency, it’s useful to think of crypto as a token that can power or enable other apps on the platform. For example, Solana can power smart contracts, decentralized finance apps, NFTs, and more.
Solana Chain (SOL) Key Statistics
How does Solana Chain(SOL) work?
Solana is incredibly complex. Let us start with a term you may have heard if you have looked at the project before: Proof of History (PoH). PoH is not a consensus mechanism. Rather, it is a component in Solana’s Proof of Stake consensus.
PoH involves timestamping transactions when they are added to a Solana block. A new block on Solana is generated every 400ms (compared to Ethereum’s roughly 15 seconds and Bitcoin’s 10 minutes). Without getting into too much detail, the decentralized clock which is used as a reference for the timestamps is the SHA256 hash function. SHA256 may sound familiar because it is used in Bitcoin’s Proof of Work consensus mechanism.
However, instead of working to “solve” the hash functions to produce a new block, Solana instead uses SHA256’s repetitive outputs as a reference – timestamps. This produces a sort of “clock tick” where each clock tick is 400ms (instead of one second like a regular clock).
Next, let us clear up a few misconceptions about Solana. Many sources label Solana’s consensus as Delegated Proof of Stake DPoS. This is not accurate, and the Solana team has noted this many times. It is an easy mistake to make because there are various roles on the Solana blockchain (leaders, validators, archivers, etc.).
What makes Solana different?
Solana parts ways with other blockchains in the way consensus is formed among the nodes. While proof-of-history has its benefits, there are some concerns around Solana’s voting mechanism and whether or not it causes centralization.
With Solana, nodes must vote on blocks and their transactions’ legitimacy in order for them to become part of the chain. Nodes send votes to the leader and the leader is then responsible for tallying the votes themselves and signing off on the block.
In a typical blockchain, validators are chosen via proof-of-stake. They then create the next block of transactions and broadcast this to all the other nodes in the network. The rest of the network then audits the new block against their version of the ledger. Each node then checks its version of the ledger and the new block against all other nodes in the network. From here, nodes individually choose whether to agree that this new block is legitimate or not.
The process continues until a majority of nodes have agreed on one new version of the chain. While it is time-consuming, letting nodes come to an agreement without an intermediary tallying votes has been core to decentralized blockchains since Bitcoin was created.
SOL Token Use Case
- Staking Rewards: You can stake your SOL or delegate it to a validator. Validators can earn up to 5.8% Annual Percentage Yield (APY) and charge a configurable percentage of the return they get from delegated funds.
- Transaction Fees: SOL is used to pay transaction fees
The Solana network’s highly innovative blockchain is primarily built on eight innovations.
Proof of History: A pre-consensus clock
This clock enables the network to agree on the time and sequence of transactions. The Solana network does this by creating a cryptographically secure time across the network. Proof of History provides a unique output that can be publicly verified. Due to this, the nodes do not need to coordinate with the entire network but the consensus clock. Thus, reducing the transaction overhead.
Tower BFT: A PoH-optimized version of voting based consensus algorithm.
Tower BFT enables the Solana network to leverage the synchronized clock by PoH. to achieve consensus. It works by locking out nodes after voting on a form for a given period of time.
Turbine: A block propagation protocol
The Solana network breaks down blocks and communicates them between validators. In order to do this the Solana Network uses Turbine, a separate but connected protocol. Turbine optimizes for steaming and breaks down blocks into smaller packets for random validators.
Gulfstream: a transaction forwarding protocol
Gulfsteams functions by maintaining unconfirmed transactions. It pushes, cashes, and forwards transactions. Since validators know the trusted order of transactions, they can keep an eye on transactions. Thus allowing them to maintain and execute transactions ahead of time. Thus taking lower consensus times and reducing the memory pressure.
Sealevel: a super parallel processing engine
The Solana network uses Sealevel to leverage GPUs and SSDs. Unlike most single-threaded blockchains, Solana offers a parallel transaction system. Using Sealevel, Solana finds non-overlapping transactions and executes them in parallel.
Pipeline: A technique for optimizing transaction validation
The Solana network uses an optimization technique for transaction validation called Pipelining. Separate hardware gets streams of data using pipelining to process them. It helps in streamlining the process of transaction validation. This allows for quicker validation and higher performance on the Solana network.
Cloudbreak: Horizontally-scaled accounts database
Cloudbreak reduces the strains on memory due to other computation innovations. Therefore, optimizes reads and writes spread across SSDs. It aims to reduce block times and latency due to confirmation on the network.
These are nodes on the network that do not participate in validation and make sure that storage costs are low. Moreover, this enables everyone to participate in the consensus and validation. Additionally, the transactions are broken down into small parts and stored with Archivers. As a result, Solana borrows from Filecoin in terms of leveraging Proof of Replication (PoRep) Archivers are on the long term roadmap of the Solana network.
Solana solves the many traditional issues that earlier blockchain technology experienced. Solana displays a new structure for verifying transactions and a more efficient consensus algorithm. The platform will definitely be a strong competitor with Bitcoin and Ethereum. Solana displays the fast advancements in the crypto industry in just mere 10 years. The platform will definitely be something to look out for as it continues to develop!
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