In a centralized system, this clock doesn’t exist because the computers can all trust that timestamps are accurate. In the proof of history whitepaper, the technology’s creator notes that “some argue that Bitcoin’s Proof of Work algorithm’s most essential feature is functioning as a decentralized clock for the system.” In the Bitcoin network, for instance, miners perform the critical role of timestamping transactions, which are then bundled into blocks, which are confirmed by the entire network of computers every ten minutes. Solana uses a combination of proof of stake and a new mechanism called “proof of history.” Proof of history is designed to keep time between computers on a decentralized network without all the computers having to communicate about it and come to an agreement. In either case, all the computers in the network need to come to a consensus on certain facts - including when a transaction took place. Many newer cryptocurrencies, like Cardano, use a consensus mechanism called proof of stake - in which network participants “stake” their own crypto to get a chance to validate transactions and earn newly minted crypto and fees. SOL is available to buy and sell via exchanges like Coinbase.Īs you may know, Bitcoin uses a consensus mechanism called proof of work, which uses miners to validate transactions and produce new BTC. It’s used to pay transaction fees and for staking. Developers hope high speeds and low fees will eventually enable Solana to scale to compete with centralized payment processors like Visa. Solana can process around 50,000 transactions per second - compared to 15 or less for Ethereum (the ETH2 upgrade, which is currently underway, is designed to make Ethereum much faster than it is now).īecause Solana is so fast, congestion and fees remain low. Its major innovation is speed, via a bundle of new technologies including a consensus mechanism called proof of history. Like Ethereum, Solana is both a cryptocurrency and a flexible platform for running crypto apps - everything from Degenerate Apes to the Serum decentralized exchange (or DEX). Specifically, the Degenerate Ape Academy NFTs, the first major NFT project to launch on the Solana blockchain. SOL got a boost from one of the biggest crypto trends of the summer: the launch of a primate-themed NFT collectible project. In August 2021, prices for SOL - the cryptocurrency that helps power the smart-contract-compatible Ethereum competitor Solana - suddenly spiked from around $30 at the beginning of the month to around $75 three weeks in, drawing mainstream attention to the altcoin. It also gives holders the right to vote in future upgrades. Solana’s native cryptocurrency is SOL, which is used to pay transaction fees and for staking. It employs a bundle of novel approaches, including the “proof of history” mechanism. Solana is a crypto computing platform that aims to achieve high transaction speeds without sacrificing decentralization.

Solana lightpaper