Solana is super fast, energy-efficient, and inexpensive.
It feels like a something from the futuristic society in Demolition Man.
Demolition Man if you don’t recall is a 1993 cult classic film starring Sylvester Stallone, Wesley Snipes, and Sandra Bullock . The story goes something like this: an old-school police officer is brought out of suspended animation/prison to battle his old ultra-violent nemesis who is loose in a completely non-violent and ill-prepared future society.
How does any of this relate to Solana?
Well in Demolition Man, fiat money is not really a thing anymore. Society in this dystopian future uses a monetary system called “credits”, which is both electronic and instantaneous. However, the system behind credits has total control over what can be bought or sold, even to the extent of fining individuals for swearing. It’s actually more of a CBDC / a social credit system.
Solana, on the other hand, promotes an open and censorship-resistant platform where transactions are almost instantaneous and fees are incredibly low. It’s a viable competitor for fiat credit card transactions. With its smart contract capabilities, utilities like DeFi, trading and NFTs are built on Solana. Low transaction fees alone are drawing in a lot of retail investors, developers, traders, artists and small businesses. Let’s not forget to mention that Solana has fostered a large and growing memecoin trading ecosystem, Solana powered mobile phones, and Phantom, easily the best crypto/web3 wallet that’s been released in years.
Solana is like Ethereum only it’s a lot faster and way cheaper.
Despite a few outages and some technical issues, Solana has quickly become a top tier crypto sitting in the number 5 spot by total market cap at the end of 2024.
Back in 2021 we saw the $SOL token rise from $0.50 all the way up to $259 USD. That’s up 518x for those keeping score. However, like everything else in the cryptoverse, it fell dramatically in 2022 after the FTX collapse. SOL dropped all the way down to around $8.
But by October 2024, SOL was trading in the $130-150 range with a market cap of about 67 billion. Data via—> CoinGecko
Key Takeaways
Solana offers high-speed transactions at very low costs.
$SOL is Solana’s native cryptocurrency. It’s used for transaction fees, staking, and within the ecosystem for various DeFi applications, NFT marketplaces, and more.
Solana is leading blockchain design with tech like Proof of History.
From DeFi to mobile, Solana’s ecosystem is rapidly growing with new applications and a growing community.
Despite challenges, Solana has a dedicated and growing community and increasing institutional interest.
$SOL is one of the top cryptocurrencies in total market cap and adoption.
What Makes Solana so Great?
The Problem:
High Transaction Fees!
Transaction fees for blockchains like Ethereum are still pretty high a lot of of the time. Even with less traffic and despite the transition to Proof of Stake (PoS) which was expected to improve scalability and reduce energy consumption. The issue of high fees, especially during times of high network demand or user error, remains a challenge.
It’s just not easy to make a blockchain that is both fast and cheap — even with advanced consensus mechanisms.
The Solution:
Solana Offers Fast and Cheap Blockchain Verification
Solana solves for high fees by using a unique method called Proof of History (PoH) combined with Proof of Stake (PoS). This allows it to process transactions very quickly and at very low costs. Solana is like a super-fast superhighway for digital transactions, where instead of waiting in traffic (high fees + slow transactions), you race through at lightning speed for pennies.
To keep transaction costs low, Solana boasts an average processing speed of 2,700 transactions per second.
Peak performance has been reported to hit 72,582 transactions per second (TPS).
Transactions are processed effectively quickly and cheaply for very small amounts. Because of this, Solana is designed to tackle real-world problems: DeFi, trading and sending/receiving are very inexpensive and this allows retail investors and small businesses to operate effectively.
Equity:
The Blockchain Should Be For Everyone
While many different cryptocurrencies promise a more equitable financial system, transaction fees give an unfair advantage to larger investors. To make finance more fair, Solana makes it just as cheap and quick for you to process your transaction, whether you own 1 SOL or 10,000 SOL.
Solana is like a super fast digital superhighway.
The Technology Behind Solana
Solana leverages a hybrid consensus model, melding Proof of Stake (PoS) with Proof of History (PoH), enhancing both security and efficiency
Proof of Stake on Solana:
To validate transactions, individuals or entities stake $SOL, which acts as as a form of collateral. A stake can be forfeited if there’s fraudulent activity. This discourages dishonesty but traditionally did not ensure lightning-fast transaction speeds.
Tower BFT for Consensus:
Solana implements Tower Byzantine Fault Tolerance (BFT), a variation of PoS that uses a distributed network to agree on transaction validity. This system is designed for speed and efficiency, allowing nodes to reach consensus without extensive computational overhead.
Proof of History (PoH):
Each transaction is timestamped with PoH, creating a verifiable sequence of events akin to a time-lapse photo of events unfolding in real-time. These timestamps reduce the need for heavy communication between nodes because the order of transactions is inherently clear, making validation straightforward.
Synced Clocks for Efficiency:
With all nodes utilizing synchronized clocks, PoH eliminates the need for energy-intensive computations typically required for consensus. Transactions are timestamped, sequenced, and verified with minimal latency, allowing Solana to process them rapidly and append them to the blockchain with ease.
All of this ensures that Solana processes transactions quickly, maintains security through economic incentives, and manages to scale by reducing the consensus workload through innovative timekeeping.
A Brief History of Solana
Solana was founded in March 2017 by former executives from Qualcomm, opening up the blockchain to the public in 2021. The parent company Solana Labs, received a rush of investments totalling an impressive $314 million just in the summer of 2021.
Founder Anatoly Yakovenko, inspired by the inefficiency he observed in existing blockchain networks, proposed a radical idea: using time as a verifiable truth in blockchain consensus. This led to the creation of Proof of History (PoH), a breakthrough that would lay the foundation for Solana’s speed and scalability.
Launched in March 2020, Solana aimed to solve the blockchain triad dilemma, offering decentralization, scalability, and security simultaneously. Its unique consensus model combined PoH with a variation of Proof of Stake (PoS), enabling Solana to process transactions at speeds previously thought unattainable in the blockchain space.
In 2024, Solana became like the Wild West of meme coins: a digital gold rush ensued that saw meme coins like Dogwifhat (WIF) and Bonk! (BONK) absolutely skyrocket.
Memecoins are a whole other story…
🤯 🤠 🤑
The key takeaway is that right now Solana is speeding past Ethereum and most other blockchains.
Buying SOL (with Fiat)
Find a crypto exchange that you’re comfortable with, go through their onboarding, KYC and sign-ups and then just stick with them as much as possible. If they don’t offer the specific coin, token or feature you’re looking for in the future, you can always sign up for new accounts then. You just don’t to manage a bunch of different exchange or trading accounts.
All of them should support buying and exchanging SOL.
Larger crypto exchanges (like the ones listed here) have proven track records and reliability.
Our top picks:
| Newton | Coinbase | Crypto.com | |
| Ease-of-Use | ✔✔✔✔✔ | ✔✔✔✔✔ | ✔✔✔✔✔ |
| Trading Fees | Zero fees but make money on the spread | Variable depending on transaction | Lower fees than Coinbase |
| Payment | E-transfer or wire transfer | Debit or Credit Card | Debit or Credit Card |
| Recurring Buys | Yes | Yes | Yes |
| Notes | Covers gas up to $5 (move to your wallet for free) | Offers the opportunity to earn various crypto for free through learning rewards | Promotion, when you join, waives fees for 30 days |
| Security & Reputation | Strong reputation and track record
FINTRAC#M19607029 |
Strong reputation and track record
FDIC Insured |
Strong reputation and track record
FDIC Insured |
Each of these has proven to be reliable and trustworthy for us for years. KuCoin is good too.
Recommend Newton / Coinbase for Canadians.
Where to Store SOL
After you purchase SOL from an exchange, you can either leave it on the exchange if you trust it, or move it to a private crypto wallet.
We always recommend moving your digital assets to your own private wallet. There is very little downside and you have control over your assets. You can participate in staking and earning rewards using either hot or cold wallets for storage.
If you plan to use your SOL for trading or to participate in DeFi, you might want to keep some of it stored in a hot wallet, software that stores access to your crypto on a phone or laptop.
The majority of it can be moved into off-line cold storage.
Cold wallets also allow you to use and store your crypto but they come with the extra security of being off-line until you decide to connect them. Slightly less convenient but much more secure.
If you’re not familiar with cold store think of a small physical device that looks like a USB or small hard drive. As long as it’s not connected to a computer and wifi network, your crypto is safely stored off-line.
Hot wallets:
Phantom, Exodus, SolFlare
Cold storage:
Ledger, Tangem, Trezor
| Hot | Cold | |||
| Wallet | Exodus | Phantom | Solflare | Ledger |
 |
 |
 |
 |
|
| Supported Platforms | Mobile, Desktop, Browser extension | Mobile, Desktop, Browser extension | Mobile, Desktop, Browser extension | Mobile, Desktop, connect to
Ledger Live |
| Connect to Cold Wallet? | Yes, Trezor | Yes, Ledger | Yes, Ledger | Supports Phantom, SolFlare |
| Initial Setup | Instant | Instant | Instant | 10 min |
| Private | Yes | Yes | Yes | Yes |
| Staking | Yes | Yes | Yes | Yes |
Get Phantom or SolFlare if you want to use SOL.
If you just want to store and stake SOL, Ledger is a safe and secure way to do it.
Staking Solana
Staking SOL allows you to earn yield or interest by contributing to Solana’s blockchain operations.
You can stake your SOL to participate in network validation and earn rewards. The inflation rate of SOL is designed to decrease over time, incentivizing early staking. To participate, you’d designate your SOL in order to validate transactions and secure the network, and you’ll earn more SOL as a reward, like interest.
Follow the instructions in your wallet—it’s straightforward.
- Staking is simply passive income; you earn by simply holding your SOL
- Staking supports network security and efficiency.
- Staking SOL will typically earn about 6-7% APY.
- It pays out every few days and goes directly into your wallet.
- You never lose custody of your SOL while staking it, but it can’t be used until it’s unlocked.
- It usually takes a few days to unlock and withdraw your stake.
Should You Invest in SOL?
Solana looks like a good investment.
It’s a fast and low-cost blockchain with a lot of applications and a large community.
It handles thousands of transactions per second, making it ideal for Dapps that need quick payments and low fees. Speed and affordability give it an edge over most other blockchains (like Ethereum).
Solana is also popular for new projects, especially in gaming and DeFi. Big companies and developers are building on it, which could help its value grow. As more people use Solana for everyday applications, demand for its token will increase.
Solana Pay is integrated with PayPal for example.
Solana mobile release the SAGA in 2023 and is launching a second device the Seeker (or S2) which has over 14,000 pre-orders.
Solana’s current price is still well below its all-time highs (ATHs), meaning it could have more room for growth if it retains popularity and sees continued increasing adoption.
Disadvantages?
There are no major red flags, however the biggest concern for Solana is its history of network outages.
Over the past few years, Solana has experienced several instances where the network went offline due to technical issues or overload from high transaction volumes. Although they are rare these outages raise some concerns about the blockchain’s reliability and long-term stability.
This is the official Demolition Man trailer:
Cult-classic sci-fi | Rating: ⭐️ ⭐️ ⭐️ ⭐️
Conclusion
Solana looks to have a promising future. Its fast, low-cost blockchain and expanding ecosystem—including popular Dapps and Phantom wallet along with product launches like the SAGA and S2 phones—make it attractive for developers and users. These factors could continue to drive growth and adoption, especially in gaming, DeFi, and Web3.
You can always buy and stake SOL earning around 6-7% APY.
