What is Solana? SOL — The Next Generation Blockchain Explained

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Coinmonks

7 min readJun 21, 2022

From the ability to create straight-forward single-thread contracts to the advanced parallel smart contracts possible by blockchain technology. And from the functionality of proof-of-work to proof-of-stake and finally proof-of-history. This is the full explanation of Solana. The latest in new blockchains looking to take over the expensive high gas fee Ethereum blockchain.

Overview of Solana

First with an Overview of Solana, after Ethereum set itself up as king of smart contracts, several fondly dubbed “Ethereum killers” projects have been popping up in the DeFi space. Today I’ll be talking about Solana, one of those “Ethereum killers” out there. In 2021, Solana grew by more than seven thousand five hundred percent, making it the fourth-largest cryptocurrency by market capitalization.

So, what is Solana? It is a public, open-source blockchain for creating decentralized applications (known as dApps), minting non-fungible tokens, and more using smart contracts. Solana’s native token is the SOL, which provides network security and value transfer via staking.

In 2017, Anatoly Yakovenko (now the CEO of Solana Labs) and Raj Gokal (and now the COO of Solana Labs) came together to create Solana. Yakovenko figured he could apply his background in system design to create a new blockchain that’ll allow for higher processing speeds. Solana’s creators hope to make it the world’s most high-performance blockchain while keeping costs low, which some have called too ambitious.

Now I certainly can’t speak to their ambitions, but one thing’s for sure, achieving said goal won’t be. For one thing, the more transactions a blockchain network processes, the higher the fees. Just look at Ethereum; the transaction fees continue to rise as its network processes more transactions. Unfortunately, talk is cheap, and the simple truth is that the more transactions a network processes, the higher the transaction fees, at least for blockchains like Ethereum. As usage on blockchains like Ethereum continues to rise, transaction time and gas fees rise along with it. Solana’s developers argue that this limits the potential and scalability of Ethereum (and other blockchain networks) and that they’ve devised a solution that will make them the “fastest expanding ecosystem in crypto.”

With over 65,000 transactions per second, Solana is now one of the most highly used blockchains today, so perhaps they really may be the Ethereum killer.

Features of Solana

Let’s look at some of the features that set’s Solana apart from the other blockchain networks.

Proof of History

Both Ethereum and Bitcoin operate a proof of work (or known as PoW) approach for approving and restricting entries on their database. Proof of work means that each node on the blockchain has to reach a consensus before processing a new entry.

The thing with PoW is it slows down transaction speed, not to mention it is incredibly complex. Solana’s proof of history (known as PoH) solution means that a node can add a new block to the blockchain network without waiting for consent from the other nodes.

Every node in Solana has its own clock and makes choices without consulting the others. Proof of History improves transaction speed while simultaneously ensuring an efficient blockchain network and recording all transactions.

Tower Byzantine Fault Tolerance (BFT) algorithm

The Byzantine fault tolerance (also known as BFT for short) algorithm might be a mouthful to say. Still, it plays a part in contributing to Solana’s success. Think of it as a shield for each node. So anytime a node fails, the shield stops the failure (or the cause of said failure) from affecting the other nodes. This approach allows the nodes to keep working even with multiple failures.

Gulfstream

When a transaction is sent on Ethereum, it is stored in a Mempool before being added to a block. You can think of the Mempool as a waiting area (you know, like in a dentist’s office) where all unprocessed transactions wait to be added to the block. Solana’s solution to the Mempool is Gulfstream.

Validators are present in every blockchain ecosystem (validators choose transactions to add to the blockchain network). Solana’s network sends the transactions to its validators even before a new transaction is added. Validators empty the Mempool region simultaneously, ensuring no “unconfirmed transactions” in the Solana ecosystem.

Sealevel — Parallel Smart Contracts

Multiple smart contracts can run simultaneously on the Solana network, saving time and making Solana one of the most cost-friendly blockchain networks. In addition, the Solana network can run multiple smart contracts thanks to its “Sealevel” technology.

Ether’s EVM runs a single thread meaning one. This means that only one smart contract at a time can change the state of the blockchain. But Solana created a parallel engine (called Sealevel) to carry out smart contract operations. Sealevel can handle over ten thousand contracts in parallel using a verifier as its core. It allows Solana to be more efficient in terms of execution time.

Because a single transaction in Solana reads or writes all-state as it executes, it can perform transactions in parallel. This allows non-overlapping transactions to run in parallel and even transactions that merely read the same state.

Cloudbreak

Solana can increase its scalability by following a horizontal scaling method. The cloudbreak feature is Solana’s account database which organizes read and write input transactions. Cloudbreak aims to reduce hardware bottlenecks since many consumer-grade components today are currently incapable of handling the data sizes and speeds required. The database reads and publishes transaction input at the same time by indexing data on every piece of hardware.

Pipeline

Solana uses pipelining to validate blocks swiftly. This is a procedure in which data must be processed sequentially but by a different unit. Laundry, for example, necessitates washing, folding, and drying. These tasks are carried out by distinct “hardware,” but they are completed in order.

Solana can maintain all hardware working simultaneously thanks to efficiently pipelining, validating, and duplicating transactions across all nodes. The Transaction Processing Unit is the name given to this system (or TPU for short).

Turbine

The leader can use the turbine to split large blocks into smaller packages. Individual validators can check transactions using smaller packets without the data consuming too much of their bandwidth.

How Does Solana Compare to Ethereum?

It’s impossible to speak on Solana without comparing it to Ethereum, so let’s see how Solana compares to Ethereum.

Let’s Look at Gas Fees

Anytime a transaction takes place, a fee (commonly called a gas fee) is paid to the computers processing the transaction. Some blockchain costs more than others, but Solana’s gas fee costs as little as $0.00025 per transaction. Meanwhile, gas fees on the Ethereum network fluctuate widely, going as high, sometimes more than $100. And that’s just for simple transactions. Transactions involving smart contracts have no limits and go up to $250. For more significant, more complex transactions, gas fees can even climb to millions of dollars.

Now We’ll Compare Transaction Speeds.

Gas fees are not the only area where Solana comes on top. It’s also better than Ethereum in processing transactions. The Ethereum network is so badly congested that it can take up to 15 seconds to mine a block (process one transaction). Ethereum blockchain can only process 15 to 45 TPS (transactions per second). Mining a block takes Solana 400 milliseconds, and the network can handle up to 50,000 TPS.

And What About Ease of Access

Ethereum works with Solidity, a programming language created specifically for it. On the other hand, Solana runs on Rust, a popular programming language across developers. Solana runs on software called Rust, the most popular software among developers. Rust is a familiar and straightforward programming language that can create various applications, including games and blockchains. Since more developers understand Rust, Solana has become the more accessible platform for creating dApps.

And is Solana Environmentally Friendly

Proof of Work is the method for mining Ethereum blocks. However, it consumes a lot of electricity because it needs large amounts of processing power. As a result, Ethereum uses more energy each year than Israel and Belgium combined, considerably contributing to global warming.

Solana on the other hand employs the Proof of Stake and Proof of History algorithms, which are 99.9% more energy efficient than the Proof of Work algorithm. As a result, Solana is simply better for the environment, making it a far more tempting option for its consumers and environmental organizations.

Benefits of Solana

And what are the benefits of Solana? Solana can process 50,000TPS while charging extremely cheap costs (less than $.01). Solana has achieved outstanding levels of scalability by utilizing Proof of History and several other ground-breaking advances. Thanks to billions of users, the network has developed economies of scale and kept application fees incredibly cheap. In addition, Solana guarantees that projects are interchangeable. Multiple shards or a layer-2 system are not required for users.

Staking Solana

Let’s talk about something a little more interesting, how to earn rewards and interest with Solana tokens.

Users can earn rewards by staking their SOL (Solana’s native token) to help secure the network. The token is given to validators who run and process transactions via a shared risk-reward financial model. Validators with more stake are more likely to get accepted to mine a block and record new transactions on the ledger, and of course, receive more rewards.

You can stake SOL tokens with your personal wallets or the FTX and Binance exchanges. If you’re a beginner, then staking on an exchange is the best way to go. However, if you’re more crypto savvy, you can choose a pool and stake using a personal wallet. That way, you can further decentralize the chain by spreading your token across the network.

Conclusion

Even though Solana is a newcomer to the Blockchain space, its performance advantages and potential application in various use cases make it an excellent rival to Ethereum. Is it, however, a better option than Ethereum? In the end, it’s a promising idea. Yet still, too early to say if it can genuinely overtake Ethereum as the primary blockchain. Which is more popular and has a larger ecosystem.

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