solana, a blockchain platform followed by top crypto investors, says it’s far faster than ethereum

Solana: A Rising Blockchain Platform

While not yet a household name, Solana is gaining recognition within the cryptocurrency sphere. Industry experts are increasingly interested in this blockchain platform, largely due to its founder, Anatoly Yakovenko. He previously spent over a decade as an engineer at Qualcomm, specializing in wireless protocols.

The Genesis of an Idea

Yakovenko recounts having a pivotal moment of inspiration at a San Francisco cafe, sparked by two coffees and a beer. This led to his core concept: creating a historical record to accelerate “consensus,” the decision-making process inherent in peer-to-peer blockchain systems.

Addressing the Limitations of Current Consensus Mechanisms

Currently, many blockchains achieve consensus through “proof of work,” requiring members to solve complex mathematical problems. Miners are rewarded with cryptocurrency for their efforts, but this process is slow – taking an hour for Bitcoin and a minute for Ethereum – and consumes significant energy. This energy intensity has hindered the scalability of both networks. Elon Musk recently cited this as a reason for Tesla no longer accepting Bitcoin for vehicle purchases.

The Promise of Proof of Stake

An alternative gaining traction is “proof of stake,” where participants lock up cryptocurrency to activate validator software. These validators store data, process transactions, and add new blocks to the blockchain, earning cryptocurrency as a reward. This method requires less powerful equipment, broadening participation and potentially accelerating consensus.

Yakovenko's Vision: Beyond Proof of Stake

Yakovenko acknowledges the potential of proof of stake, stating that Ethereum’s successful transition would be “devastating for the entire industry” if it fails. However, he believes even this system isn’t optimal. He argues that proof of stake still allows miners and bots to exploit users through front-running transactions by controlling transaction order.

Introducing Proof of History

Yakovenko’s solution is “proof of history,” a synchronized clock developed for the Solana blockchain. This system timestamps each transaction, preventing miners and bots from manipulating transaction order, thereby enhancing security and “censorship resistance.”

Solana’s Innovative Approach

According to Decrypt, Solana further enhances speed by forwarding transactions to validators before the previous batch is finalized. This maximizes confirmation speed and allows for concurrent and parallel transaction processing. Yakovenko emphasizes that the network’s speed is fundamentally limited by “the speed of light.”

Investor Interest and Current Status

Solana has attracted significant investor interest, having sold tokens but not equity. Garry Tan of Initialized Capital and Joe Lallouz of Bison Trails have both publicly expressed their enthusiasm for the project.

Developer Adoption and Network Growth

Despite the excitement, some observers note that Solana needs to attract more developer mindshare to solidify its long-term viability. Currently, Solana boasts 608 validators and 47 decentralized applications (dapps). In comparison, Ethereum has approximately 33,700 active validators and 3,000 dapps.

A Head Start and Unique Advantages

Ethereum launched in 2015, giving it a three-year head start. However, Yakovenko asserts that Solana possesses its own advantages. He leads a distributed team of 50 employees, many of whom are former Qualcomm colleagues. He also notes that while the proof-of-history concept is open source, few major competitors are actively adopting it.

The Complexity of Implementation

Implementing proof of history is a complex undertaking. Yakovenko explains that building a new layer-one blockchain takes two to three years, and retrofitting an existing system could add six to nine months and introduce vulnerabilities.

Disrupting Global Markets

With a market capitalization of $12 billion, Solana isn’t aiming to compete with Ethereum on all fronts. Yakovenko’s ultimate goal is to disrupt Wall Street and the broader global financial markets, creating “an open, fair, censorship-resistant global marketplace.”

The Potential for Price Discovery

Yakovenko envisions Solana as a superior platform for price discovery compared to traditional exchanges like the New York Stock Exchange. He believes the current volatility in cryptocurrency prices reflects developers exploring the network and building innovative applications.

The Power of Decentralized Innovation

He highlights the advantage of decentralized networks, where developers can “self serve and build stuff that they want to go to market.” This contrasts with larger companies like Bank of America or Visa, which he believes are slower to innovate.

Lessons from Qualcomm and the Rise of Linux

Yakovenko draws parallels to his experience at Qualcomm, where proprietary operating systems were overshadowed by the open-source Linux project. Initially dismissed as a hobby, Linux ultimately became the dominant operating system for mobile devices.

A Future Driven by Open Source Collaboration

He believes that the same dynamic is unfolding in the blockchain space, with decentralized networks empowering a global community of engineers to rapidly innovate and build the future of finance.