You probably all know the Solana ecosystem, but for those that never heard about $SOL. I’ll introduce you to this coin in that blog post. On twitter the hype for Solana is getting bigger as days pass by.
People now prefer saving hundreds of dollars in gas fees on eth for just a few NFT trades. On the ethereum blockchain, gas fees are getting more and more expensive as a lot people are using the infrastructure.
Solana has a block time of 400 milliseconds. In comparison, Ethereum needs 10 seconds and bitcoin 10 minutes. Now, what is block time?
Block time is the measure of how long it takes the miners to validate one block on the blockchain and start writing a new one.
Also, Solana would be able to process up to 710’000 transactions per second. It never had to do more than 50’000 but it would be able to easily. Just so you know, visa, can process up to 23’666 transactions per second. 30 times less than SOL!
You may have heard how BTC uses a proof of work concept to validate transactions and mine coins. Well, there are a few other concepts out there, for example, proof of stake that is used by ETH. At the moment, Ethereum has 2 blockchains; one that uses proof of stake and the other proof of work. While user transactions are only processed on the proof of work chain, the proof of stake chain will be used exclusively in the future.
You might be asking, what are you talking about? What is proof of work and proof of stake?
Well, they both are a consensus mechanism. This means it’s a set of rules every computer on the blockchain agrees to.
In the case of proof of work, it implies challenging the computers with a hard-to-solve challenge and the computer that solves the challenge first will receive the right to mine the next block and therefore be rewarded in BTC. This system is widely criticized because it uses enormous amounts of power just to solve random challenges.
Proof of stake, on the other hand, rewards the computers by the amount of currency they hold in their wallet. The more crypto they have of the ecosystem in question more blocks they will be able to validate.
Now that you understand what a consensus mechanism is I can explain to you SOLANA’s. SOL uses a Proof of History mechanism. It works a bit like proof of stake but solves one big problem by adding a timestamp to every new block, the time information comes from the computer mining the block.
What problem does that solve? The problem with proof of stake is to put the blocks in the right order. To do this, the nodes have to discuss between them and agree on a time the event occurred. This takes a lot of time and can be avoided by putting a timestamp on every new block like proof of history does.
1 Solana transaction will cost around $0.00025 which makes the blockchain one of the cheapest out there. Why are transaction fees that low, you might ask? Because of the higher block time and block size of the ecosystem they are able to offer so low gas fees.