Solana

Solana is a platform designed to provide the foundation for decentralized applications (dapps) in a way that prioritizes scalability. To achieve this goal, Solana is one of several competing blockchain projects, such as Ethereum, Zilliqa or Cardano, that hope to develop an ecosystem of products and services powered by cryptocurrencies. Solana combines architectural design choices that attempt to provide faster transaction settlement times with a flexibility-focused infrastructure that enables developers to write and launch customizable applications using multiple programming languages. To enable these functions, the Solana Network’s native cryptocurrency, SOL, is used to execute custom programs, send transactions, and incentivize participants who support the Solana Network.

History of Solana

Solana is built by Solana Labs, which was founded in 2017 by a group of software engineers in San Francisco with Anatoly Yakovenko at the helm. Yakovenko and several other members of the Solana team spent years working at Qualcomm, a Fortune 500 company that provides semiconductors, software and wireless technology for mobile phones. Qualcomm is headquartered in San Diego, just south of Solana Beach, California, the beach that inspired the crypto project's name.

Although initially uninterested in cryptocurrencies, Yakovenko came up with the idea of improving blockchain efficiency through historical proofs during a caffeine-induced fever dream. He worked on the project with Qualcomm colleague Greg Fitzgerald, now Solana's principal engineer. Solana released its whitepaper and internal testnet in February 2018, while the Solana mainnet and SOL token launched in 2020.

Features of Solana

Open Source Code

Like many other blockchains, Solana has an open source application. This means that anyone can download the source code and use it for personal and commercial use.

SOL Coin

SOL is Solana’s native token. SOL also has Lamports in smaller denominations. Lamports is named in honor of Leslie Lamport, a famous American computer scientist known for his important work in distributed systems and computational efficiency.

Proof of Stake

Solana allows users to stake SOL tokens in a manner similar to blockchains like Ethereum to help process transactions faster and more efficiently. These are done through validator nodes, which run multiple internal processes to process transactions securely. The staking algorithm also allows users to vote for blockchain changes suggested by members of the Solana developer community.

History Proves

This is the core innovation of Solana. Proof of History (PoH) is a consensus method that takes the time of a transaction and merges it with Proof of Stake to process transactions. In this case, the time is based on the block height, which is the block number where the transaction occurred. Combined with the Verifiable Delay Function algorithm, blockchain can effectively timestamp events as they occur. Each node can add a block without specifically agreeing with another node. Instead, nodes agree on PoH timestamps. With PoH, Solana uses synchronized clocks for the entire blockchain. Validators can use PoH to replay events in the blockchain. The end result is extremely fast transaction speeds, up to 50,000 TPS.

Tiered Services

Solana uses multiple services on top of the network to improve efficiency. Think of it like a technology stack, with different layers performing specific functions. Through these services, Solana can be used to build decentralized applications (Dapps) and decentralized financial institutions (DeFis).

Turbo Protocol

Solana uses the Turbine protocol to transmit information in smaller pockets to clusters of nearby nodes called neighborhoods. This allows it to verify transactions faster.

Rotate Leader Nodes Regularly

The leader node is the node expected to validate transactions within the cluster. A single node is designated as the leader by the network. This improves efficiency within a cluster of nodes. In Solana, leader nodes rotate regularly to prevent malicious or non-functional nodes from blocking transactions and slowing down the network. 

Extremely Short Block Time

Solana’s block time is 400 milliseconds. Short block times make transactions extremely fast, allowing it to easily process thousands of transactions per second.

How Does Solana Work?

A core component of the Solana protocol is proof of history, a series of calculations that provide a digital record confirming that an event occurred on the network at any point in time. It can be presented as a cryptographic clock that timestamps every transaction on the network, and a data structure that can be simply added to.

PoH relies on PoS using the Tower Byzantine Fault Tolerance (BFT) algorithm, which is an optimized version of the Practical Byzantine Fault Tolerance (pBFT) protocol. Solana uses this to achieve consensus. Tower BFT keeps the network secure and operational and serves as an additional tool to verify transactions.

Furthermore, PoH can be viewed as a high-frequency verifiable delay function (VDF) with triple functions (setup, evaluation, verification) to produce unique and reliable outputs. VDF maintains order on the network by proving that block producers have waited enough time for the network to move forward.

Solana uses the 256-bit Secure Hash Algorithm (SHA-256), a set of proprietary cryptographic functions that output a 256-bit value. The network periodically samples numbers and SHA-256 hashes, providing real-time data based on the set of hashes contained in the central processor.

Solana validators can use this hash sequence to record specific data created before generating a specific hash index. The timestamp of the transaction was created after this specific data was inserted. In order to achieve the claimed high TPS and block creation times, all nodes on the network must have cryptographic clocks to track events, rather than waiting for other validators to validate transactions.

How is Solana Different from Other Blockchains?

Solana’s ambitious design aims to solve the blockchain trilemma in its own unique way, a concept developed by Ethereum founder Vitalik Buterin. This trilemma describes the three main challenges developers face when building blockchains: decentralization, security, and scalability.

It is widely believed that the way blockchains are built forces developers to sacrifice one of these aspects in favor of the other two, as they can only provide two out of three benefits at any given time.

The Solana blockchain platform proposes a hybrid consensus mechanism that compromises on decentralization to maximize speed. The innovative combination of PoS and PoH makes Solana a unique project in the blockchain industry.

In general, blockchains are more scalable, depending on the number of transactions they can support per second, the more scalable they are, the better. However, in decentralized blockchains, time differences and higher throughput slow them down, meaning more nodes take more time to validate transactions and timestamps.

In short, Solana's design solves this problem by selecting a leader node based on a PoS mechanism that orders messages between nodes. Therefore, even without a centralized and accurate time source, the Solana network can reduce workload and thereby increase throughput.

Additionally, Solana creates transaction chains by hashing the output of one transaction and using it as the input of the next transaction. This transaction history gives Solana’s main consensus mechanism its name: PoH, a concept that allows the protocol to be more scalable and therefore more usable.