The 2020s have been fertile ground for the growth of the crypto market. Thanks to blockchain technology and the global popularity it’s gained, numerous cryptocurrencies have emerged in the last few years.
Conceived in 2017 and first made available only for limited private tokens in 2019, the public saw Solana in late 2020. Since then, it has become one of the new cryptos with a promising future.This article goes into the six vital reasons why you should keep an eye on it in 2024 and beyond.1 Proof of HistoryProof of History (PoH) is a Solana-generated algorithm used for transaction validation.The largest number of blockchains rely on proof of stake or proof of work for ensured security.The PoH method is a combination of those two mechanisms. Ideated and built by Solana Labs, it relies on something called Verifiable Delay Function – a cryptographic function used to create timestamps for every relevant block in the blockchain system. It additionally ensures that no one can meddle with these stamps.Thanks to this innovative tech, Solana is allegedly capable of handling up to 65,000 transactions in a single second. Hence, it’s getting widely used for different purposes, from building DeFi (decentralized finance) platforms, and selling NFTs (no fungible tokens) to gambling with Solana and developing blockchain games.2 Cost-Efficient, Time-SavingAs one of the rising stars of the crypto market, Solana has been positioning itself against Ethereum and Bitcoin – the two most widespread coins.Face to face with the former, SOL is a more affordable option, as one transaction costs about $0.00025. It makes Solana one of the most cost-effective cryptocurrencies on a global scale, with many new crypto enthusiasts starting to use this bargain.The latter – Bitcoin – on the other hand, is much slower. Even if we take into account that we’re comparing a first-generation blockchain with a third-generation one, Bitcoin still tends to be too slow, shoulder to shoulder. Compared to Solana’s stellar maximum of 65,000 transactions per second (TPS) above, the Bitcoin’s 7 TPS seem extremely slow. Again this makes it popular for things like gambling, where players want access to their winnings immediately.3 Positive Current MomentumSolana has gained the right market momentum in the last few years, attracting both venture capitalists (we’ll explain below why this might not be great) and regular crypto users. It hosts NFT marketplaces, Web3 apps, smart contracts, and many other projects – more than 5,000 in Q1 2024.Michael Jordan – yes, Air Mike – stirred some waters when he started his first NFT collection on one of the Solana-based platforms, called HEIR.Also, FTX – a household name in the world of crypto exchange – joined forces with Solana to construct Serum: a cutting-edge crypto exchange solution on the Solana blockchain.4 Solana Pay SolutionSolana Pay is definitely one of the most interesting projects under the Solana umbrellas. It’s a free-of-charge payment processing network, enabling consumers to make payments directly to merchants via the Solana network. That way, businesses and their customers don’t have to pay high payment processing fees and commissions, making Solana one of the tools and techniques for the 21st century business.As the transactions are carried out in USD Coin and some other stablecoins, there’s no fear that the paid amount in crypto coins will lose value soon. (Which might happen with some other cryptocurrencies).Potential DrawbacksAs everything in this world has a drawback, there are a few negative sides to the Solana coin.Namely, several outages have occurred on the Solana blockchain network in the last few years. Such inconveniences are frowned upon by investors, traders, and users. As for the investors (the VCs from above): a higher number of VCs in a crypto network raises some justified questions regarding its decentralization.Also, its validators – who make the proof-of-history method possible – face higher-than-average costs to set up the right hardware environment to validate Solana transactions.ConclusionSolana is a promising cryptocurrency that has already caused a lot of business hype and drawn even some celebrities to do business with it.Once it eliminates the minor issues and gets even more traction, it’s highly likely to become one of the major crypto options.
