Solana is one of the cryptocurrencies that have grown in popularity this year – most especially in July and August. It made its presence known when it had an ATH value of $259.96. Over the last 12 months, it has had a speedy growth of over +9.63K. Thus, making the Solana blockchain one of the most talked about.
Apart from its growth, the Solana blockchain network is becoming one of the most used as its creators have been doing a good job developing the platform for years. The decentralized platform can boast of speed, scalability and security; the important pillars of cryptocurrencies.
In this article, we take a look at the Solana coin and know whether it will be a profitable investment in the short or long run.
What Is Solana?
Solana is one of the decentralized finance (DeFi) online ecosystems that use the permissionless blockchain platform for transaction purposes. The main aim of a DeFi is to create a means for people to make financial transactions without being dependent on third parties like financial institutions, insurance homes, etc.
Solana began as an idea originally in 2017 but became official in the crypto community in March 2020. It was launched by the Solana Foundation whose headquarters is in Geneva, Switzerland.
It is built on the Ethereum blockchain to create a solution to the issue of scalability. A lot of people call this protocol an “Ethereum killer” because it adopts Proof-of-stake (PoS) and Proof-of-history (PoH). The PoS permits it to be able to process over 50,000 transactions per minute.
Solana is designed to encourage the creation of Decentralized applications (DApps). The overall features of this DeFi platform have made both new and pro-crypto traders develop an interest in the platform.
What Is SOL?
SOL is the native governance token of the Solana network. It is a cryptocurrency that can be used by people to borrow, trade, lend and leverage crypto assets. SOL has been making remarkable progress and has grown over 14,000% since its launch. SOL is an ERC-20 token.
The SOL token was launched in March 2020 alongside the platform and has raised $300 million to support the creation of DApps since its launch.
Currently, on CoinMarketCap, SOL is ranked #5 with a live market cap of over $65 million. There are over 303 million SOL coins in circulation and it has no maximum supply.
History of Solana
Anatoly Yakovenko is the brain behind Solana. He started his professional journey in the tech world with a career at Qualcomm. His intelligence is evident as he rose in rank rapidly to become a senior staff engineer manager in 2015. As time proceeded, he had a career proceeding where he took up new roles as a software engineer at Dropbox.
In 2017, Yakovenko got a big idea which later became Solana. He and his Qualcomm colleague Greg Fitzgerald teamed up together and they founded a project called Solana Labs. With time, several other colleagues from his former workplace, Qualcomm, joined the duo in the process. After three years of the original conception of the idea, the Solana protocol and SOL token were made public in March 2020.
How does Solana work
Firstly, the Solana system of transactions starts from the input of transactions to the Leader. The Leader will then sequence the messages and order them efficiently. It will allow other nodes in the network to be processed. The leader then proceeds to execute the transactions on the current blockchain that is stored in the RAM. The next step is for the Leader to publish the transactions and signature of the final state to Verifiers, a replication node. These nodes will then carry out the same transactions on their own block. They will state and publish their signatures of the state once they receive confirmation. This published confirmation has a purpose- to be used as votes for the consensus algorithm.
Solana thrives on the combination of the proof-of-stake consensus mechanism and a new mechanism known as “proof of history.” The main purpose of Proof of history is to keep time computers on a decentralized network without all the computers connected by simply communicating about it.
Solana Price Analysis
Solana coin is one of the cryptocurrencies that started on a good note during launch. Some believe that it is because of its link to the Solana blockchain network, while some think that it is because of the coin’s road map and what it seeks to solve in the long term.
Solana was launched in March 2020 with the coin trading around $0.5. The coin traded below $1 within the first 4 months of launch until July when it traded above $1 and later rose to an all-time high of $3.6 on September 7th, 2020.
After some days, the coin turned bearish and traded around $1.8 (for the first time in weeks) on 12th November. The price staggered throughout the year between $2 to $3.
The Solana coin breakthrough came in the first week of February 2021 when it traded above $5 for the first time and rose to an all-time high of $17 on the 24th of February, drawing speculations on both the coin and the Solana blockchain. The coin rose to another all-time high of $55 on 18th May this year before suffering the May 25th cryptocurrency crash, which saw a majority of cryptos losing over 50% of their value.
However, while other cryptocurrencies were trying to stabilize in value, SOL coin shocked the crypto world when it traded above $190 on 8th September (more than 500% increase).
A few days later, it dipped and traded below $120 before going on another rally and rose to an all-time high of $258 on 11th November. This drew the attention of both traders and institutional investors to the Solana ecosystem.
The SOL coin is presently trading above $200 and could exceed $500 in a few months (that’s if we consider the surging popularity of the Solana network)
So, far, the Solana Blockchain is growing in popularity every day. And looking at the white paper, the SOL coin, which is the token of the platform could break into the top 5 coins by market cap in a short time.
Solana Price Prediction For 2022
Walletinvestor sees SOL as an awesome long-term (1 year) investment. In their future forecast (5 years), they predict the SOL price to reach $2,786.47. In essence, the experts in walletinvestor see Solana coin as a profitable short- and long-term investment.
Longforecast thinks the coin will be bullish in the short and long run. From their forecast, the SOL value will reach $536 by the end of 2021. And in 5 years, the coin could trade above $600. Considering the age of the platform, we could look into their forecast closely.
Digitalcoinprice foresees the coin trading slightly above $$390 by the end of 2022. And in 2023, it could trade above $400 and rise above $700 in 2026.
Where to Buy Solana
There are many decentralized cryptocurrency exchanges where users can buy Solana coins. Some of them are; Binance, Coinbase and Kraken, etc. However, it is important to do your research and understand some factors like trading and deposit fees, withdrawal fee, ease of use, and security of the exchange.
Is Solana Secure?
Solana’s network is quite secure with a unique consensus mechanism known as Proof-of-History (PoH). Proof-of-History is the foundation of Solana’s protocol which monitors the processing of transactions. It ensures that transactions are secured and speedy. Proof-of-Stake is the second tool that is used to monitor the PoH processes. It validates the trustworthiness of the sequence of each block it produces.
On a side note, Solana has similar characteristics to Ethereum. Hence, it acts like a computing platform that collaborates with smart contracts. Smart Contracts are the bedrock for the functionality of some decentralized applications (DApps) which include NFTs markets, games, social apps, and decentralized lotteries. Most of these apps are running on Solana’s blockchain network instead of Ethereum or Bitcoin because of the scalability and speed of the execution of transactions. It is also free from congestion and has low transaction rates. It has its downsides ranging from volatility and susceptibility to crypto bugs or hacks.
Due to its scalability and speedy transaction processing, Solana has begun to gain recognition which prompts people to invest in the blockchain network. Experts have faith in it as a long-term investment. The network also encourages holding because of its predicted growth.
The predictions above show that Solana hasn’t peaked yet. It holds many potentials that will expand its growth and users.