What is Solana and how does it work?
Solana is a new blockchain project that needs to advance the improvement of decentralized applications (DAPPs) and for this it offers a stage that is the most versatile to date, secure and that tries to be as decentralized as possible. In addition, Dapps developer in its favor it plays that it has a system that does not need hardware or nodes, which avoids a large energy consumption, something that if they need bitcoin or ethereum. At the end of the day, it bases its innovation, on what is known in the crypto world, on the third-age confirmation of-stake agreement. In other words, it is a high-performance network that has come to improve the shortcomings of previous blockchain networks.
To understand it better, it should be noted that within blockchain technology when a transaction takes place, whether it is money or the sending of documents or information, it needs to be verified by the nodes. On account of bitcoin and ethereum, it is 'diggers' who accomplish this work. However, the Solana network goes a step further and seeks to do this in a more automated way, being able to support many more transactions per second than other types of networks that came before it. Of course, it is still a technology in the development phase because Solana was created in 2017, but it was not released until 2020 and, in fact, it is currently still working in beta.
How does it work?
Now that we have learned a little more about the characteristics of the Solana blockchain, many people are probably wondering about its cryptocurrency, which is listed on the market under the name SOL. This token is necessary to use as long as we are going to use the platform to develop a project, to interact within the blockchain or to generate smart contracts within it. Obviously, beyond that, it can also be used as a payment method or virtual money just like bitcoin is used or ethereum is used.
About the Solana token, called SOL, DApps development it must also be said that it is designed to be a deflationary currency, that is, little by little the number of tokens is reduced, which makes its value grow as it is increasingly reduced or a good increasingly scarce.
In summary, what we have to be clear about is that Solana is a new blockchain network that comes to cover features or improve features that other networks did not have. Broadly speaking, it offers more speed, lower energy consumption and lower rates, since the price of the rates is one of the characteristics that play the most against the ethereum network. In fact, these types of platforms that have come out to improve what Ethereum offered until now are often known as 'Ethereum Killers' or Ethereum killers because they were born to try to replace the network.
While what we have to know about SOL is that it is the token within the platform, that it is a deflationary token that reduces its volume over time and that it is necessary to be able to operate within the network. Looking at it from an investment point of view, what those who buy this token are thinking is that the Solana network will host many projects on it thanks to its advanced technology and that is why it will be necessary for those who use the platform to buy this token. As is logical, within the world of cryptocurrencies we also have to be clear about the high risk we are assuming if we decide to buy the Solana token. Since, although the technology is very advanced, it has great rivals such as cardanol or ethereum, which continues to be updated over time.