Solana is a blockchain network with the ability to process up to 50,000 transactions per second, making it one of the fastest networks in crypto. It was rolled out during the 2017 ICO boom, raising $25 million in both public and private funding rounds. The platform is powered by a unique take on consensus called Proof-of-History (PoH), which adds a timestamp to each transaction and allows the network to function as a global, trust-minimized clock.
Solana's developers claim the network can be trusted to reliably record the relative order of transactions in the blockchain without relying on validators to establish a precise time for each event. This enables the chain to function at high speeds by effectively "time-stamping" each event and arranging them accordingly. Solana also includes an innovative technology stack that improves efficiency. This includes Turbine, a tool that packs data into smaller packets that can be processed more quickly by each network node; Sealevel, an engine that optimizes parallel data processing to increase network speed; and Cloudbreak, a distributed account database that stores Solana's registry data on SSD drives.
The Solana blockchain is used to run a variety of decentralized applications, including DEXs and e-commerce systems. The technology is fast enough to allow a DEX on the Solana network to clear tens of thousands of transactions per second, which could potentially make it the most efficient exchange in the world. It's also powerful enough to handle payment transactions, allowing for a system that's comparable to the Visa network in terms of speed and cost.
Aside from its blazing fast speeds, Solana is able to curb blockchain censorship through its rotating validator nodes. These nodes are chosen using smart algorithms that determine the minimum number of nodes that must be compromised in order to censor the Solana blockchain. The team behind the project is also releasing a new software update in June 2022 that will further boost the blockchain's performance.
Although the Solana team claims its blockchain is scalable, there are some concerns about how it handles large volumes of transactions and the ability to meet demand during peak periods. For example, Solana rewards its validators based on their staked SOL tokens, which means that higher throughput requires more expensive and performant hardware. This can lead to centralization, especially during spikes in activity when a few mega-datacenters are responsible for facilitating all the transactions on a network.
Solana is working on solutions to address these issues. A recent announcement stated that it would create a new reward system that pays validators a fixed amount for each block they validate, which should help reduce the influence of big datacenters and promote greater diversity in its network. In addition, the Solana team is developing tools that can reduce data transmission and transaction processing times to reduce bandwidth requirements and enable Solana to scale with demand. Currently, Solana is supported by a few key nodes that hold over a third of the total SOL supply and validate over a third of all transactions on the network.
