Cryptocurrency trading is one of the biggest activities carried out among people who have adopted cryptocurrency in Africa. Although this is the case, the number of people involved in cryptocurrency as investors in Africa is increasing and causing major shifts in the cryptocurrency market. For both investors and traders, one of the things that they need to know to improve their efficiency and profits is detailed information about various cryptocurrency tokens. Each cryptocurrency token is developed to serve different purposes, and it is important to know details about each to know which to invest in and which to trade.One of the most impactful blockchain providers in the market is Solana. Many may have heard the name but do not know what Solana offers and how it fairs in the cryptocurrency market. This article tries to shed light on Solana to help people know more about the market and help them make the right decisions before investing.
Solana was founded in 2017 to serve as a blockchain used in various cryptocurrency practices. The organization behind Solana’s development, management, and improvements is Solana Labs, located in the United States of America. When the blockchain was developed, the organization raised $25 million from various ICOs between 2017 and 2020. The company further raised $300 million from crypto VCs in 2021. Solana services went live on the market in 2020, meaning that this is still a young player in the blockchain technology market. Although Solana is relatively young in the market, it has shown its potential and gained the title of being Ethereum’s biggest competitor in the blockchain industry.
Another critical piece of information about Solana is that blockchain technology is still in its Beta level of development. Considering the level and amount of upset Solana has been able to have in the market during its Beta testing, when the organization finally completes its development and settles all the kinks, Solana has the potential to have huge impacts and benefits to its investors and users.
Each blockchain technology has to have a consensus to enable its decentralized nature. Some blocks have proof or work which requires investors to mine the tokens, while others have proof of stake where investors spend their money to own a part of the chain. Solana users proof of stake as its consensus. Its proof of stake uses timestamps to show proof of history. At the time of writing this article, Solana had 1700 validators, who are the people investing in the proof of stake for the technology. The total number of validators is then broken down into groups called Solana clusters that are made up of 150 validators.
Challenges Solana Has Faced
Solana may have had major impacts on the blockchain technology scene and more on the cryptocurrency scene, but it has faced its fair share of challenges. Although it faces one problem, the issue has been requiring and causing some challenges to Solana’s value in the market. In December 2021, Solana faced its third Distributor Denial of Service or DDoS. The problem caused the entire network to go down for a few hours. The previous time this had happened, the network went down for six hours. This was when the problem started. The value of Solana was at an all-time high before the DDoS in December. In January, Solana faced another two DDoS. These problems caused degraded performance and a red flag to investors. But although this happened, it is important to consider that Solana is still in its Beta testing stage and is prone to some challenges.
Solana might be facing some technical issues, but this has not stopped the organization and technology from developing and providing services that have led to its international recognition. The first thing that Solana has done to cement its position as one of the best blockchain technologies in the market is to have incredible speeds. One of the major issues that exist with cryptocurrency and blockchain technology is slow transaction speeds. Bitcoin, the biggest cryptocurrency token in the market, can only do 30 transactions per second. On the other hand, Solana can do between 45000 to 65000 transactions per second. Considering that the transaction speed on Visa is 65000 and Visa is able to allow international and efficient banking transactions, Solana is making a name for itself. Solana was crowned as the fastest cryptocurrency transaction blockchain and given the name the Visa of cryptocurrency. This is already an impressive feat in itself, but Solana wants to go a step further and improve their rate of transactions. According to Solana, they want to make their platform the fastest in the world. They want to be better and replace the Centralized stock exchange platform in the United States of America and the rest of the world.
Solana’s second major milestone is cryptocurrency developed through their blockchain technology. One of the most common and most used cryptocurrency tokens in the world is the USD Coin. The USDC is one of the most common tokens since it’s a stable coin, and its value is at par with the United States dollar. Many might not view it as a big thing considering that many cryptocurrency tokens have used Etherium as their blockchain technology provider. But with the development of CBDC, there is talk of using USDC as the American CBDC rather than creating another. Doing this will increase Solana’s market share by improving and using USDC tokens for transactions.
The other milestone covered by Solana is its ability and use to develop NFTs and applications than can be used easily. Solana has been identified as one of the blockchain technologies that have had a huge success in NFT creation and taking a slice of the market from Etherium. According to statistics, Solana is the third biggest NFT development blockchain, with the value of the NFT at almost getting to $2 billion. The other two are Ethereum and Ronin. One of the largest banks in the United States of America, JP Morgan, noticed this and stated that Solana would have a major say in the NFT market due to the high transaction fees when using Etherium.