Launching with the tagline “The Great Blockchain Superset”, Solana has been dubbed one of the fastest blockchains in existence, boasting an improved consensus mechanism compared to sha256 or bitcoin’s Proof-of-Work (POW). POW was designed for use on CPUs, but with massive improvements in processing speeds over three decades, this algorithm does not stand up as well against GPUs and ASICs used in mining. Solana has opted for a hybrid consensus mechanism to allow it to work both on CPUs and GPUs.
In addition, Solana will use DApp (decentralized application) as its moniker, which makes for a more dynamic blockchain. It will be able to process millions of transactions per second, with the ability to scale up and down based on the need by the network. Solana will also require a minimum of 1% of all shares to be used exclusively for mining in order to maintain decentralization.
Solana, we need to know more
It was developed by a team of seasoned developers from France and Switzerland, who were asked by several hedge funds in Switzerland and other parts of Europe to help build a blockchain that would work seamlessly with their proprietary trading software. After several years, the team was successful in developing a blockhain that would work with speed and security.
The SOL token is used in the blockchain as the form of payment for using smart contracts, running DApps and making other transactions on the network. The supply is fixed at 100 million tokens, with 80% going to investors, 15% reserved for the team and 5% for bounties.
Since its launch in November 2017, Solana has a market cap of $130 million, with a price of $1.5 per token and daily volume of $9 million. On 25 January 2018 it reached an all time high of $3.85 per token before dropping slightly on 29 January to $2.
SOL price sees investors ignoring overheated RSI
As can be seen from the price chart, there is a distinct uptrend with sideways trading. The token underperforms on overbought RSI indicators and performs exceptionally well on oversold indicators. Since the launch of Solana in November last year, it has already reached a 52-week high of $5.5, before dropping to its current price of $1.5 per token. This comes at a time when the cryptocurrency market as a whole is seeing very high volatility. The general trend since December has been of sideways trading, with sharp drops and gains, but it does not mean that Solana should be ignored.
Solana aims to be the world’s leading blockchain for investment funds and institutions by decentralizing the management of their assets harnessing the full potential of blockchain technology. These funds will all have the ability to take advantage of scaleable features offered by Solana, including faster transactions and lower fees when trading on its platform. Solana is targeting the institutional investment sector first, with the intention of appealing to hedge funds and big banks in the future.
Solana has announced that it is working on a new version of its platform called “The Great Chain Upgrade”. This will be an important milestone for Solana as it will allow for better scalability and larger businesses and institutions to take advantage of its platform. The team have also mentioned that they will be announcing some new partnerships soon.
In addition, Solana has plans to release a decentralized exchange, where users on its network can trade different cryptocurrencies directly through SOL tokens. This will be the first time this has been done in a public blockchain environment.
Is Solana an ERC-20 token?
No, SOL is a self-sustaining asset that uses a native currency, the SOL. It is also not an ERC20 token as it is not necessary to use the Ethereum network to build applications on the Solana blockchain. The team is working towards building a system where all applications can work directly off its blockchain without being dependent on Ethereum or other third parties.
What is the difference between ERC-20 and self-sovereign tokens?
ERC20 [or “Ethereum”] tokens are built using smart contracts using the Ethereum network and therefore have no intrinsic value. Self-sovereign tokens are built using a native currency [SOL] and have value. Many ERC20 tokens mask their value in the AI, base data or smart contract yet these are all tools rather than the ultimate value of the token. Solana’s focus is for it to be self-sovereign with access to all token holders, not just those supporting Ethereum.
What is the purpose of the ICO?
The Solana token was created through an ICO [Initial Coin Offering] in November 2017 so that a decentralized blockchain platform could be developed. Investors were enthusiastic to support this, with more than 275 million SOL being sold during the initial sale, which raised $27.6 million [USD]. The team has also stated that, once the market value of Solana reaches a certain point and they are able to secure institutional investment, they will hold another ICO which is open to all investors worldwide.
