Solana Coin is an innovative blockchain designed for the use of dApps (decentralized applications), smart contracts and blockchain networks. Interestingly, Solana also works as NFTs and is also used in music streaming. Unlike other coins, when verifying payments or transactions, it is delivered with a combination of micropayments, proof-of-history (PoH) and proof-of-stake (PoS).
Experts consider Solana to be a smart innovation that covers the errors associated with using Ethereum. Since then, Solana’s team has set a very ambitious goal of creating a game that appeals to the trio of time constraints, security and scalability.
There are currently around 300 million tokens in circulation, with more to be presented. The Solana (SOL) platform, which was founded by Anatoly Yakovenko in 2017, already ranks Solana coinmarketcap at number 6 of the most popular cryptocurrencies in terms of market capitalization, with a capitalization of around $ 65 billion at a rate of $ 200 per token. In this article, we are going to address your concerns and uncertainties about Solana’s profitability. It will tell you everything you need to know about Solana including Solana price prediction, the pros and cons of investing in Solana.
According to the founder, there are eight notable unique technological innovations that Solana brings to the game.
- Proof of History (PoH) → one clock before consensus
- Tower BFT → PoH-optimized version of PBFT (Practical Byzantine Fault Toleration)
- Turbine → a block propagation protocol
- Gulf Stream → Mempool-less transaction forwarding protocol
- Sealevel → Parallel term of smart contracts
- Pipeline → a transaction processing unit for validation optimization
- Cloudbreak → Horizontally scaled account database
- Archiver → Distributed Ledger Storage
Benefits of investing in Solana
- Lower transaction fees: Solana scores best on micropayments as it offers very lower transaction fees. Lower transaction fees save investors huge sums of money. Solana also ensures exchange and learning. Exchange processes millions of transactions every day.
- Safer and faster system for verifying payments: Solana as a web-scale blockchain offers fast, secure, scalable, decentralized apps and marketplaces. His system currently supports 50,000 TPS (transactions per second) and 400 ms block times. In addition, it supports an upper limit of 710,000 tps on a standard gigabit network and 28.4 million tps on a 40 gigabit network.
- Solana operates a scalable network that is better than any existing blockchain and even VISA: Solana is still associated with its lower transaction fees and is more scalable compared to Ethereum. While transaction fees for Ethereum can exceed $ 30 per transaction, Solana transaction fees averaged $ 0.00025. Implicitly, many users, especially those with lower capital, will be happy to execute trades on the Solana network.
- New technological approach: (PoH and PoS and time-saving): Proof of History is a mechanism that helps to order events on the blockchain. Instead of creating a uniform time for all participants, it allows each node to independently check the validity of the order. Observing the strength of a competitor to Ethereum Solana, Josh Goodbody, COO of Qredo and former director for Europe, Middle East and Africa at Binance, said, “Solana’s hallmarks are speed of transactions and low gas fees due to an innovative evidence history protocol. Thanks to this powerful infrastructure, they have raised over $ 300 million this year from companies like a16z and Polychain. “
- Good leadership and technology attract large and well-known investors: Solana has attracted some big well-known investors like Passport Capital, Kevin Rose, Rockway Capital, Block Tower Capital, Multicoin Capital, etc. This is a pull factor for the users.
- Solana has some of the best and greatest partners in the crypto game: Over 400 partners in the Solana network, such as Serum, Chainlink, USDC (the Circle Stablecoin) and Audius, who are known in the crypto world.
- Relatively high stability: Changes that either swipe up or down are constant features of all cryptocurrencies. The 2020 COVID-19 pandemic and recent comments by Elon Musk, as well as a number of political developments in many countries, led to increased market volatility, in the course of which many cryptocurrencies lost value. For many crypto traders and analysts, this was a very good test of investment worth. However, Solana continued to see fairly steady growth while the larger market in the crypto world had lost some of its value.
- Delegated stakeout: Solana, acting as a delegated staking blockchain, enables its users to gain great competitive advantage. Firstly, it is possible for users to secure a passive income by staking their SOL on the network. Traditionally, staking protocols continue to enjoy greater popularity in the market because they are easier to learn for new users and they offer constant rewards when compared to trading. Ben Weiss, CEO and co-founder of the Bitcoin ATM operator CoinFlip, stated that “With the current state of the blockchain, Solana is the most efficient at most metrics”.
Disadvantages of investing in Solana
As promising as Solana is with very interesting technological innovations, there are some drawbacks that you should be aware of if you decide to evaluate the Solana platform as a good platform to invest in or not.
- Higher set-up costs: Although Solana’s transaction fees are relatively lower compared to other cryptocurrencies, the cost of setting up Solana’s hardware is higher than other cryptocurrencies. Investors can seriously consider this difference and influence their final decision to invest in a different cryptocurrency with lower setup costs.
- Decentralization: Solana’s transaction method speeds processing and minimizes the likelihood of decentralization. This is a potential turnoff for investors looking for a highly decentralized trading platform. Against this background, Goodbody warns that Solana will have to be further decentralized and more network validators have to be procured. There are currently fewer than 200 validators.
- Best for longer term investments: Cryptoanalysts believe that Solana’s strength lies with investors looking for longer term investments as opposed to those looking for short term investments or quick large payouts. This could be daunting for some investors.
- Fear of not being able to cope with future massive surges in his network or his users: Solana recently had an embarrassing experience due to massive pressure on its network with an increase in users. IT engineers and backend experts have to prove that they can handle things properly even on future increases.
- Distribution and emissions schedule make it unattractive
- Distribution dilutes the circulating supply
In general, cryptocurrency investments are risky and volatile and require a lot of research and understanding to be as safe as possible. Prices can go up or down at any time. Solana saw some very interesting price increases in 2021. In fact, July has been dubbed “Solana Summer” for crypto traders after its impressive price spike. Solana is certainly an investment to watch out for as it continues to grow because one thing is certain, if Solana does this, there is every chance it will grow in value and popularity.
Top crypto platforms to get you started
Here are our two recommended platforms to start trading crypto while earning interest: BlockFi and Gemini.
BlockFi is best recommended for those who:
Gemini is best recommended for those who:
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