Solana’s performance this year has been astronomical. The value of the cryptocurrency rose by a good 5000 percent within a year. It thus performed significantly better than bitcoin, which recorded an increase of around 307 percent in the same period.
With a market capitalization of currently around 43 billion dollars, it is tiny compared to the largest and oldest cryptocurrency. Nevertheless, more and more investors are interested in the Solana Coin and see it as an alternative to the mainstream cryptocurrencies. In terms of market capitalization, it now ranks among the top ten cryptocurrencies, currently in seventh place.
Solana: exchange rate, opportunities, advantages and disadvantages of the Bitcoin alternative at a glance.
What is Solana (SOL)?
Behind the newcomer cryptocurrency is the Solana blockchain from the San Francisco-based company of the same name. Solana was conceived in 2017 by Anatoly Yakovenko. The story of Solana thus begins a good ten years after the emergence of bitcoin. The first Solana token (SOL) was launched in March 2020.
The Solana blockchain can be used to program digital contracts – so-called “smart contracts”. In the crypto world, these are used to link transfers to certain conditions and thus allow them to run automatically. The system is said to be capable of 50,000 transactions per second.
How has the Solana share price performed?
As recently as April of last year, the Solana price was trading well below one dollar until the coin sustainably surpassed that level in July 2020. But Solana has only seen an extreme price increase since this year. The crypto crash in May of this year also put a damper on the Solana price, as a result of which Solana rallied. Currently, the share price is trading at around $145. Solana reached its previous record high on September 9 at a price of 214.96 dollars.
Those who invested in Solana coins last year multiplied their investment significantly. Within one year, the price increased by 6000 percent. In the crypto scene, there is already talk of the “Solana summer”. And when the prices of all cryptocurrencies slid deep into negative territory in mid-September, Solana defied the correction.
On which exchanges is Solana (SOL) tradable?
Investors can buy the Solana coin SOL on major crypto trading exchanges. Binance, Coinbase, Kraken and Bitpanda have recently added Solana to their product portfolios. The situation is different for neobrokers. Neither eToro, nor Trade Republic or Scalable currently offer Solana coin trading.
How does Solana mining work?
The Solana consensus mechanism is based on a combination of the proof-of-history and proof-of-stake approaches. Proof-of-History proves that an event occurred at a specific point in time. In proof-of-stake, validators release the transaction and receive coins as a reward.
Unlike Bitcoin, Solana mining does not require expensive mining hardware. The world’s most valuable and oldest cryptocurrency uses proof-of-work. In this process, new coins are mined using the processing power of computers. That eats up a lot of energy. Solana’s technology makes it possible to create new coins in a more energy-efficient and thus environmentally friendly way.
What are Solana’s advantages over Bitcoin and co?
Crypto investors see great potential in the Solana coin. Just like Ethereum, Cardano and Polkadot, Solana is a smart contract platform that can be used to program digital contracts. The big advantage of Solana is that the platform is fast and cheap. Thanks to proof-of-history technology, more than 50,000 transactions per second are possible. Costs of just $0.00025 are incurred per transaction. This makes Solana popular in the DeFi (decentralized finance) industry.
Solana is also benefiting from the ongoing NTF boom. NFT stands for “Non-Fungible Token,” which is a non-exchangeable token. In this process, files are provided with a signature and thus made unique. Solana has launched its own marketplace for NFTs. To trade NFTs there, you need Solana tokens. Thus, Solana has growth opportunities even apart from the general development on the crypto market.
What disadvantages does Solana have compared to bitcoin?
Cryptocurrencies are susceptible to fluctuation. History shows that Bitcoin and co. prices drop rapidly every now and then. Because of their lower trading volume, smaller coins in particular are more likely to be affected. So far, however, the Solana Coin has not followed the other cryptocurrencies when their prices plummeted.