Solana is a highly functional open source project that implements a new, high-speed, license-free Layer 1 blockchain.
Created in 2017 by Anatoly Yakovenko, former CEO of Qualcomm, Solana aims to increase productivity beyond what is typically achieved with popular blockchains, while keeping costs low. Solana implements an innovative hybrid consensus model that combines a unique Proof-of-Stake (PoH) algorithm with an ultra-fast Proof-of-Stake (PoS) timing mechanism. For this reason, the Solana network can theoretically process more than 710,000 transactions per second (TPS) without any scaling solutions.
Solana’s 3rd generation blockchain architecture is designed to facilitate the creation of smart contracts and decentralized applications (DApps). The project supports several decentralized financial (DeFi) platforms as well as non-fungible tokens (NFT) markets.
The Solana blockchain was deployed during the first ICO boom in 2017. The project’s internal test network was released in 2018, followed by several phases of the test network, eventually leading to the launch of the official mainnet in 2020.
What makes Solana unique?
Solana’s ambitious design aims to solve the blockchain trilemma, a concept proposed by Ethereum creator Vitalik Buterin, in a unique way. This trilogy describes a set of three main challenges developers face when creating a blockchain: decentralization, security, and scalability.
There is a common belief that the blockchain is built in such a way that developers are forced to sacrifice one aspect in favor of the other, as they can only offer two of the three advantages at once.
The Solana blockchain platform has proposed a hybrid consensus mechanism that undermines decentralization for maximum speed. The innovative combination of PoS and PoH makes Solana a unique project in the blockchain industry.
As a general rule, the more scalable the blockchain, depending on the number of transactions it can support per second, the higher the size the better. However, in a decentralized blockchain, the time lag and higher throughput slow it down, which means that more nodes confirming transactions and timestamps take longer.
In short, Solana’s design solves this problem by defining a single master node based on the PoS mechanism that collects messages between nodes. Thus, Solana network has the benefits of reducing workload, resulting in higher productivity even without a central source on time.
In addition, Solana creates a series of transactions by hashing the output from one transaction and using it as input to the next transaction. Transaction history calls Solana’s primary consensus mechanism: PoH, a concept that allows for greater scalability in the protocol, which in turn leads to improved usability.
How does Solana work?
An essential component of the Solana protocol is proof of history, which is a series of calculations that provide a digital record that proves that an event has occurred on the network at all times. It can be thought of as a cryptographic clock that provides a timestamp for every transaction on the network, as well as a data structure that can be a simple addition to it.
PoH is based on PoS using the Byzantine Tower Fault Tolerance (BFT) algorithm, which is an improved version of the practical Byzantine Fault Tolerance (pBFT) protocol. Solana uses it to reach consensus. Tower BFT ensures the security and health of the network and acts as an additional tool for verifying transactions.
In addition, PoH can be thought of as a high-frequency verifiable delay function (VDF), which is a triple function (setup, estimate, and control) to produce a unique and reliable output. VDF keeps the network in order by proving that block manufacturers have waited too long for the network to move forward.
Solana uses a 256-bit Secure Hash Algorithm (SHA-256), which is a set of special cryptographic features that produce a 256-bit value. The network periodically tests the number of SHA-256 hashes and provides real-time data according to the set of hashes built into the CPUs.
Solana validators can use this hash sequence to record a specific piece of data that was generated before a specific hash index was created. The timestamp of transactions is generated after this piece of data is inserted. To achieve the allegedly massive amount of TPS and block time, all nodes in the network must have encryption hours.