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all about Ethereum’s rival blockchain chosen by Google Cloud

Solana is a blockchain that is considered Ethereum’s main rival. It is the first blockchain to adopt the “proof-of-history” (PoH) validation system, enabling faster transaction processing and lower fees. Find out everything you need to know about this Google Cloud-backed blockchain and its SOL cryptocurrency token.

In Southern California, in the county of San Diego, is the small coastal town of Solana Beach. Inspired by this piece of paradise, developer Anatoly Yakovenko began creating his Solana blockchain in 2017 and launched it in March 2020.

The previous Qualcomm framework designed this blockchain to work similarly to Ethereum, but with improvements. This innovative blockchain has quickly gained popularity and has risen in popularity top 10 cryptocurrencies.

What is Solana?

Solana is an open source project highly functional implementation of a new high-speed and permissionless layer-1 blockchain. Its goal is to offer higher throughput than other popular blockchains while keeping costs as low as possible.

Its innovative hybrid consensus model combines a PoH (proof-of-history) algorithm unique and an extremely fast synchronization engine based on proof-of-stake (PoS). This is what enables the Solana network to process more than 710,000 transactions per second without the need for a scaling solution.

Solana’s third-generation blockchain architecture is designed for facilitate the creation of “smart contracts” and decentralized application (DApp). This project supports a wide range of decentralized finance (DeFi) platforms and NFT marketplaces.

Funded to the “boom” of ICOs (initial coin offerings) from 2017, the blockchain was then tested through several phases before the official launch of the mainnet in 2020.

What makes Solana unique?

According to Vitalik Buterin, the creator of Ethereum, one of the main problems with blockchains “the trilemma”. This is a set of three obstacles that developers face when building blockchains: decentralization, security, and scalability.

In general, blockchains are designed in such a way that they force developers to do so sacrifice one of these aspects in favor of the other two. They can only provide two of these three benefits.

Scalability increases with the number of transactions per second that can be supported but decentralization slows down blockchains due to the number of nodes required to verify transactions.

Solana blockchain offers on its side a hybrid consensus mechanism. The trade-off is made on decentralization, to maximize speed. This innovative combination of PoS and PoH makes the Solana project unique in the blockchain industry.

Designed by Solana solves the trilemma problem by selecting a leader node based on the PoS mechanism, to sequence the messages. The network reduces the workload and therefore allows for increased throughput without a centralized source.

Also, a chain of transactions is created by hashing the result of one transaction and using it as input to the next transaction. This transaction history is what lends its name to Solana’s main consensus mechanism: PoH. This concept enables a better extension of the protocol.

How does Solana work?

The main component of the Solana protocol is proof-of-history : a sequence of calculations that provide a digital record to confirm that an event has occurred on the network.

It can be represented as a cryptographic clock, which provides a timestamp for each transaction on the network. This timestamp is accompanied by a data structure.

PoH relies on PoS using The Tower BFT algorithm : an optimized version of the Practical Byzantine Error Tolerance Protocol. Solana uses this algorithm to reach consensus. Tower BFT maintains the security and operation of the network and acts as an additional tool to validate transactions.

PoH can also be considered uVerifiable Delay Function (VDF) at high frequency to produce reliable and unique results. This feature maintains order on the network by proving that the block producers have waited long enough for the network to continue the process.

L’256-bit SHA-256 hash algorithm is used by Solana and includes a set of proprietary cryptographic functions. The network thus provides real-time data according to the set of hashes included on the central processing units.

That Solana validators use this sequence of hashes to store a specific piece of data, created before the generation of the specific hash index. The transaction timestamp is created after inserting this piece of data.

To minimize block creation time and to achieve a high number of transactions per per second, all network nodes must have cryptographic clocks to keep track of events instead of waiting for confirmation of transactions from other validators.

Solana’s story

Before Solana, Yakovenko worked in design of distributed systems, within large companies such as Qualcomm. This experience allowed him to understand the importance of a reliable time stamp to simplify network synchronization.

The expert understood that quickly the use of Proof-of-History (PoH) would speed up blockchain compared to clockless ones like Bitcoin and Ethereum. These systems could not scale beyond 15 transactions per second globally, although a centralized system like Visa can reach 65,000 TPS.

After starting with a private C codebase implementation, Yakovenko took the advice of his former Qualcomm colleague Greg Fitzgerald and migrated the codebase to the Rust language.

In February 2018, Fitzgerald began making prototypes of the first open source implementation of Yakovenko’s white paper and took care of the first release of the project. He demonstrated that 10,000 signed transactions could be verified and processed in half a second.

Shortly after, Stephen Akridge, another Qualcomm colleagueproved that this throughput could be massively improved by delegating signature verification to graphics cards.

Yakovenko recruited Fitzgerald and Akridge and three others helped found the company Loom. To avoid confusion with an Ethereum-based project of the same name, the project was later renamed Solana in reference to their hometown when they worked at Qualcomm.

In June 2018, the project expanded to run on cloud-based networks. A month later, the company released a public testnet with 50 nodes capable of supporting 250,000 transactions per second. Four years later, at the end of 2022, Solana treated more than 100 billion transactions at an average price of $0.00025 per transaction.

Solana (SOL) token

that the total number of Solana tokens can reach 511 million, but there are about half of them in circulation today. Almost 60% of SOL tokens are controlled by the Solana founders and the Solana Foundation, and only 38% is reserved for the community.

SOL tokens can be purchased on most exchanges. The main platforms used for trading this cryptocurrency are Binance, Coinbase, KuCoin and Huobi.

Solana vs. Ethereum

Solana is often praised for her speed and performance. It is even considered as a legitimate rival for the leaders industry like Ethereum.

In terms of processing speed, Solana can challenge Ethereum with an estimated peak speed of over 50,000 transactions per second. The various consensus algorithms used allow for faster transaction confirmation, and this feature makes Solana one of the fastest blockchains.

Compared with, Ethereum’s old proof-of-work model could only support 15 transactions per second. Solana is therefore several thousand times faster, and also has the advantage of reduced costs thanks to the implementation of new “tokenomics” at a lower price.

Also note that the Solana blockchain is good more ecological and sustainable than other PoS blockchains. This is a strong point against Ethereum, whose PoW model required phenomenal computing power.

But after The Merge, Ethereum now uses PoS. L’Ethereum 2.0 can therefore compete with Solana in terms of productivity, scalability, energy consumption and transaction costs.

Google Cloud partner for Solana

In November 2022, Google Cloud announced that it was working on several projects related to the Solana ecosystem. The public cloud provider is now solana blockchain validatorto support this network.

In addition, Solana will now be powered by Google Cloud’s new Blockchain Node Engine service: a fully managed node hosting service designed for business Web3.

That DevOps teams no longer have to worry about the availability of the blockchain infrastructure, and will no longer need to monitor the system and resolve issues in the event of an outage. Google Cloud monitors the nodes and restarts them if necessary in case of failure. However, Solana’s rival, Ethereum, will be the first blockchain supported by this service.

In addition, Google Cloud announces that its big data analytics service, BigQuery, will be Solana compatible from 2023. Historical data will be indexed to allow developers of the Solana ecosystem access to it.

Solana’s weak points

Like all other blockchains and cryptocurrencies, Solana also has disadvantages. Although this blockchain can compete with the most recognized projects, it is vulnerable to centralization as there are not many block validators.

Anyone on the network can become a Solana validator, but this require significant resources computers. Furthermore, the protocol is still presented as a beta version of the mainnet. So there may be errors and mistakes.

Despite these shortcomings, Solana remains one of the most important ecosystems of the crypto world and seems to have a bright future. Launched in March 2020, its token quickly became one of the top 10 cryptocurrencies by capitalization.

Solana’s hack

On 2 August 2022, The Solana ecosystem has been hacked. Experts suspect that a private key has been compromised, allowing hackers to steal Solana (SOL) tokens from Slope, Phantom and TrustWallet. Victims reported that their funds were directly drained from their crypto wallets.

The Solana Foundation’s official Solana Status Twitter account commented on the incident, saying that “ the affected addresses were created, imported or used on Slope mobile wallet applications. This exploit was isolated to a wallet on Solana, and the hardware wallets used by Slope stay safe “.

In contrast, the details of how this incident occurred remain shrouded in mystery. The foundation specifies that the information was accidentally transferred to an application monitoring service. Estimates vary, but it is assumed that nearly $6 million in assets was stolen.

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