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Everything You Should Know About Solana Cryptocurrency - Piggy Cards Blog

Everything You Should Know About Solana Cryptocurrency

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Solana introduction:

Solana is a high-performance blockchain platform that utilizes a new consensus mechanism called “Proof of Stake Time” (PoST) to achieve fast transaction speeds and low fees. It is designed to scale to handle thousands of transactions per second, making it well-suited for decentralized applications that require fast and reliable processing. Solana’s native cryptocurrency is called SOL and is used to pay for transaction fees and to participate in the network’s governance. The Solana platform also includes a decentralized exchange called Serum, which allows for fast and low-cost trading of various cryptocurrencies. The Solana team is based out of San Diego, California, and was founded in 2017 by Anatoly Yakovenko, the current CEO.

Solana Price History

Since the March 2020 launch, $SOL had been in a range-bound between $0.50~$1.50 for a year. Then Solana had a massive rally with other cryptocurrencies following Federal Reserves’ helicopter money. The all-time high for SOL was reached in November 2021 when the price reached $258.93. A significant drop followed this in price, and SOL reached a low of $8 on Dec 29, 2022. You can check the real-time Solana price here on investing.com or CoinGecko.

It’s worth noting that the cryptocurrency market is highly volatile and subject to significant fluctuations, so the price of Solana can change rapidly. Additionally, many factors can influence the price of Solana, such as market sentiment, macro economy, news, and overall cryptocurrency market conditions. As always, it’s important to be aware of the risks and do your own research before investing in any cryptocurrency.

How to earn more Solana?

Can you mine Solana? No. Solana uses a consensus mechanism called “Proof of Stake Time” (PoST) which is a variation of the Proof of Stake (PoS) consensus mechanism. This means you cannot use computational power to mine new blocks like bitcoin. Instead, the Solana network has two ways to reward Solana holders: staking and validation.

Staking

Stake your Solana within a validator to earn a reward, just like banks paying interest rates. Solana uses a consensus mechanism called “Proof of Stake Time” (PoST) which rewards validators for the time they stake their SOL. The more SOL a validator stakes and the longer they stake it, the higher their chances of being selected to validate a block and earn a reward.

According to data from StakingRewards.com, the current estimated annual return for staking SOL is around 4.24%, this number can change depending on the network conditions and the number of SOL being staked.

It’s worth noting that staking rewards are not guaranteed and are subject to change. The network conditions, the number of validators, the number of SOL being staked, and other factors can affect the return on staking. Also, staking your SOL means you won’t be able to use or trade it until you unstake it. So it’s essential to weigh the potential rewards against the risks and the opportunity cost before deciding to stake your SOL.

Validation (how To become a validator on the Solana network?)

To become a validator on the Solana network, you will need to follow these steps:

  1. Acquire some Solana (SOL) by purchasing it on a cryptocurrency exchange or receiving it through a faucet.
  2. Download and set up a Solana node.
  3. Stake your SOL by delegating it to a validator or becoming a validator yourself.
  4. Wait for your turn to validate a block.
  5. Once your turn comes, you will be responsible for validating a block and for reaching a consensus with other validators on the network.
  6. Once your block is validated, you will receive a reward in SOL.

To learn more about the Solana validator hardware requirements, you can find out on the Solana.com website here.

It’s worth noting that being a validator on Solana is a technical task and requires a good understanding of Solana’s ecosystem and the security measures to keep your node and your assets secure. It is also essential to be aware that staking your SOL means you won’t be able to use or trade it until you unstake it.

Solana Competitors

Solana competes with other high-performance blockchain platforms that aim to provide fast and low-cost transactions for decentralized applications. Some of the main competitors include:

  1. Ethereum: The largest and most established smart contract platform, Ethereum aims to scale using its upcoming Ethereum 2.0 upgrade, which will introduce a Proof of Stake consensus mechanism and shard chains.
  2. Binance Smart Chain (BSC): A blockchain developed by Binance, Binance Smart Chain is designed to be compatible with Ethereum and aims to provide high-performance and low-cost transactions for decentralized applications.
  3. TRON: A blockchain platform that aims to provide high-performance and low-cost transactions for decentralized applications, with a focus on the entertainment industry.
  4. Avalanche: A blockchain platform that aims to provide high-performance and low-cost transactions for decentralized applications, with a focus on interoperability between different blockchains.

It’s worth noting that Solana also has a high number of projects building on top of it, and has also partnerships with companies like Serum, Raydium, and many more.

Solana Wallets

Some of the most popular and well-known Solana wallets include:

  1. Phantom 
  2. Serum Wallet
  3. Solflare Wallet
  4. Ledger Live

It’s worth noting that it is always important to do your own research and choose a wallet that best fits your needs, and to be careful with the security of your assets.

Merchants accept Solana as a form of payment

Solana is a relatively new blockchain platform, and as such, it is not yet widely accepted as a form of payment by merchants. However, the number of merchants where you can spend Solana is increasing as the platform gains traction and more people become familiar with it.

Currently, some merchants accept Solana as a form of payment:

To learn more about how to use Solana to buy gift cards on Piggy Cards, feel free to check the tutorial here.

Solana Slowdown Issues

Solana, like any blockchain platform, can experience slowdowns during periods of high network activity. High volatility in the cryptocurrency markets can lead to an increase in trading activity on decentralized exchanges (Serum DEXs) built on Solana, leading to an increase in the number of transactions being processed by the network. This can cause congestion on the network, leading to slower transaction speeds and higher fees.

However, the Solana team has been working on solutions to mitigate these issues. For example, the Solana team has been working on improving the scalability of the network by implementing sharding, a technique that allows the network to process more transactions simultaneously. Additionally, the team has been working on improving the network’s governance model to allow for more efficient decision-making and faster implementation of upgrades.

It’s also worth noting that high volatility can also affect other blockchain platforms as well, this is not a unique problem to Solana.

If you have any questions, please comment below.

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