How to Buy Solana | Where, How and Why
A crypto crash in September 2021, resulting in the value of the world’s cryptocurrencies plunging to a low of about $1.9 trillion, nearly 15% less than 24 hours prior and reflecting a loss of more than $410 billion, has led to fresh fears that Bitcoin and its rivals could lose all the gains made in 2021. However, Solana actually managed to soar to new record highs amid the turmoil. Many people started to take in Solana. So this guide will help to explore it and and learn how to buy Solana.
So what is Solana (SOL)? And why does it have the crypto world abuzz?
Solana blockchain is credited for the unparalleled performance, functionality (cross-chain), and low gas costs of dApps – from DeFi exchanges to AMMs.
So, if you’re interested in a smart contract platform and cryptocurrency that leverages an open infrastructure to provide greater scalability, then Solana (SOL) might be a good investment for you.
Read on for our deep dive into the blockchain to learn everything you need to know about the Solana ecosystem, including how to trade Solana, sell Solana, or buy SOL.
What Are Altcoins
“Altcoin” is a combination of the two words “alternative” and “coin” and includes all alternatives to Bitcoin. Altcoins share code and function as peer-to-peer systems or as giant computers capable of processing large amounts of data and blockchain transactions simultaneously. Most altcoins are trying to offer solutions to Bitcoin’s shortcomings and limitations.
This guide will look into Solana, a new-generation altcoin offering many features that Bitcoin doesn’t, such as allowing people to make Decentralised Applications (DApps), NFTs, and more. While Solana is an open-source and decentralized blockchain, like Bitcoin and Ethereum, it works using Proof of History (PoH), as opposed to Proof of Stake (PoS) like Ether 2.0 or Proof of Work (PoW) like Bitcoin.
What Is Solana
Solana is a highly functional open source project based on blockchain technology’s permissionless nature to provide decentralized finance ( DeFi ) solutions. While the idea and initial work on the project began in 2017, Solana was officially launched in March 2020 by the Solana Foundation, with headquarters in Geneva, Switzerland. Greg Fitzgerald and Anatoly Yakovenko started this endeavor, bringing in many prominent supporters along the way, such as the CEO of FTX exchange, Sam Bankman-Fried.
The Solana blockchain aims to create an ecosystem of decentralized applications designed for a range of use cases.
As of August 2021, many of the popular Solana applications are DEXs and crypto lending apps. The crypto app ecosystem on Solana supports billions of dollars worth of crypto assets.
The Solana blockchain can also support stablecoins and wrapped assets. As of August 2021, over $700 million worth of USD Coin has been issued on Solana. (USDC’s launch was powered by a collaboration between Coinbase and Circle through the co-founding of the CENTRE Consortium.)
Solana uses a Proof-of-History (PoH) consensus combined with the underlying Proof-of-stake (PoS) consensus algorithm. With its innovative hybrid consensus model, Solana enjoys interest from institutional traders and short-term investors alike. A significant focus for the Solana Foundation is to make decentralized finance (DeFi) accessible on a larger scale.
Solana can deploy thousands of smart contracts in parallel with each other, thus allowing users to facilitate a whopping 50,000 transactions per second. Additional design goals include low trading fees and support for all LLVM compatible smart contract languages.
SOL is the native token for the Solana network and is a relatively new cryptocurrency. Users pay transaction fees in SOL when transferring funds or interacting with smart contracts. SOL is burned by the network as part of its deflationary mechanism. Since the platform uses a Proof-of-Stake (PoS) network, participants can stake their SOL coins to become validators within the network and earn passive rewards for their efforts.
The SOL token is based on the SPL protocol (similar to the ERC20 standard of Ethereum) developed specifically for DeFi applications. SOL token holders may store their SOL in a sollet.io crypto wallet.
Solana (SOL) is the 16th largest cryptocurrency globally by market cap, valued at $7,562,530,289. The coin, which started trading at around $0.75 in April 2020, has seen such a meteoric increase in this short time.
What Is Special About Solana
Solana blockchain handles more transactions per second than Ethereum, with extremely low trading fees. It is a PoS (proof of stake) blockchain, which makes it more environmentally friendly than PoW (proof of work) blockchains.
In practice, once you hold SOL coins and Solana-based tokens in a wallet, you can start trading one token for another on decentralized exchanges running on blockchains like Binance Smart Chain, or you can buy an NFT on the Solanart marketplace.
Another reason Solana has attracted so much attention recently is because of the network’s entry into non-fungible tokens (NFTs), which can be anything digital such as art or music that are sold with tech.
The Solana team has developed eight core technologies to build a decentralized, permissionless network that equals a single node’s performance. Other blockchains may find it hard to compete with its large trading volume.
Here is the list:
- Proof of History (POH) — a clock (timestamp) before consensus
- Tower BFT — a PoH-optimized version of PBFT
- Turbine — a block propagation protocol
- Gulf Stream — Mempool-less transaction forwarding protocol
- Sealevel — parallel smart contracts run-time
- Pipelining — a Transaction Processing Unit for validation optimization
- Cloudbreak — horizontally-scaled accounts database
- Archivers — distributed ledger storage
There are more than 400 projects currently built on the Solana network. These also include Decentralized Finance or DeFi applications.
Why Do You Need to Be Careful When Investing in Cryptocurrency
When investing in cryptocurrency, you should consider its volatility, the potential for undiscovered smart-contract bugs, and unpredictability. Many exchanges have been subject to hacking incidents, and you could suffer severe losses if you choose a crypto exchange with lackluster security. Security breaches could also put your cryptocurrency investment at risk. It’s also important to do your research before you hand over any money.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not investment advice or recommendation to invest in them. A qualified professional should always be consulted before making any financial decisions.
Why Choose Solana Over Other Cryptocurrencies
Solana has surged over 3200 percent since August last year. One of the reasons for this surge is a spike in investors’ interest in Ethereum’s competitor platforms with DeFi, NFT, and smart contract offerings.
Solana’s DeFi projects have already crossed $3 billion, proving it a competitor to Ethereum, which hosts the maximum number of DeFi and NFT projects.
SOL’s dramatic rise was also due to the launch of NFT Degenerate Ape Academy built on Solana blockchain on August 15. A collection of 10,000 cartoon apes sold out in merely 8 minutes, involving 96,000 SOL or $5.9 million.
Institutional interest in Solana has also increased; Solana forged new contracts with Hacken Foundation and Gate.io. Osprey Funds has already registered Osprey Solana Trust with the US Securities and Exchange Commission (SEC).
Solana uses Proof of History and Proof of Stake to validate transactions that make the network more trustworthy. It also offers faster transactions, lower fees, and higher scalability compared to Ethereum.
Solana also brings about DeFi and NFTs as the new frontiers of growth in the blockchain ecosystem.
Why Has There Been Such a Huge Price Increase in Solana
Solana’s price rise has been astounding. People who procured coins during the Solana Initial Coin Offering (ICO) could buy SOL for $0.22. The price per SOL is now $208 — a 95,000 percent increase.
One reason for the growth is Solana’s massive backing by FTX, a multiple cryptocurrency exchange platform that has launched several Solana-based projects. Alameda Research is also one of the biggest investors in Solana, alongside Andreessen Horowitz and Polychain.
Other apparent reasons are its low transaction fees and the TVL (total value locked), a metric that counts how much value has been locked into projects on the Solana ecosystem. Solana is currently the third-largest chain in terms of TVL, with a total of $7.9 billion locked into the projects on its networks.
What Is Next for Solana
Solana has benefited from the increasing popularity of DeFi, and NFT and the competition in this space are heating up.
Cardano is implementing smart contracts, and Ethereum is implementing necessary upgrades to take on the competition from new blockchain networks.
The Regulators are gearing up to regulate DeFis, with AnChain.AI, a blockchain analytics firm helping to investigate DeFi transactions.
The latest developments demonstrate the increased use cases of a blockchain network and growing regulatory scrutiny. These developments support the evolution of cryptocurrencies as an asset or currency and accelerate the growth of the technologies their platforms promote.
Solana still has a long way to go to catch up with its competitors, especially Ethereum, for which it offers a better alternative. However, market predictions say that Solana shows a lot of potential and promise and will eventually reach and surpass them.
Considering how well Solana (a relatively new token) has done so far, it is safe to say that it will continue to do very well in the foreseeable future.
Ways to Purchase Solana
Solana (SOL) is not yet available on most cryptocurrency exchanges. To do something on the Solana network, you’ll need to purchase SOL and transfer it to a Solana wallet such as Phantom. You can transfer some cash to FTX, buy the SOL there, and then transfer it directly to Phantom (not all crypto exchanges support direct withdrawal of funds to Solana, but FTX does). Additionally, you can also buy and withdraw some other coins supported on the Solana network — USDT is one example, and FTX supports direct withdrawals to Solana addresses.
Here is a step-by-step guide to help you with your Solana purchase:
- Open an online account. Create an account with the crypto.com trading platform by entering an email and providing personal identification. Once your identity has been verified, you’re ready to buy Solana (SOL).
- Buy a wallet (optional). Before you trade Solana, you need to consider where you’ll store your crypto. It would be best if you store your cryptocurrency in a hardware or software crypto wallet. Hardware wallets are the most secure way to store cryptocurrency, as they store your assets offline on a physical device.
- Make your purchase. Now, you are all set to purchase SOL. Deposit funds into your account. Fund your account with a bank transfer, pay with a credit or debit card, or deposit cryptocurrency from a crypto wallet to buy Solana. You can buy USDT or Bitcoin as your means of trading. Tether (USDT) is a stablecoin pegged to $1, so it simulates investing with fiat currency. You can place market orders or limit orders.
Conclusion
Solana has quickly evolved into an interconnected DeFi ecosystem with a growing sphere of dApps focused on interoperability and scalability.
Solana is a robust Proof of Stake smart contract network that can handle meaningfully more transactions per second than any L1 smart contract blockchain without meaningfully compromising on security or decentralization. The primary use cases for the $SOL token are staking and paying transaction fees.
Solana currently leads several competitors in terms of network participation (transactions per day and applications built on the network). The number of projects on Solana’s network is also increasing.
Solana shows a lot of promise; it has a burgeoning app ecosystem and continued support from FTX and some of the most prominent venture capitalists in the space.
Read more: https://coinstats.app/blog/how-to-buy-solana-sol/
Text source: CoinStats Blog
