Solana is one of the fastest-growing blockchain-based ecosystems in the crypto industry. It’s taken it less than a year to rank in the world’s top 10 most popular cryptocurrencies after it launched. So, it’s not surprising that an increasing number of traders and investors from around the world, including Iowa, are becoming interested in Solana every day.
If you happen to be one of them, you’ve stumbled upon the right page. This article will explore Solana, discuss its features, and reveal the secrets behind its popularity. Keep reading.
What Is Solana (SOL)?
Solana is an open-source blockchain-based project launched in 2020. Its developers designed it to support its native cryptocurrency (SOL), smart contracts, non-fungible tokens (NFTs), decentralized applications, and many other software projects.
This versatility places Solana in direct competition with other popular blockchain networks like Ethereum. However, that’s not the trait that made this protocol popular in the crypto community. Solana’s strength lies in its transactional speed, which reaches as many as 50,000 transactions per second.
Solana owes its unparalleled scalability to its unique design. The project functions by combining two types of consensus mechanisms — proof-of-stake (PoS) and proof-of-history (PoH).
If you’re not new to the crypto industry, you’ve probably heard of PoS. The validators in the network use this consensus mechanism to add new blocks to the blockchain based on the number of staked coins.
On the other hand, PoH is an entirely new concept. Yakovenko, Solana’s lead creator, introduced it in a white paper he published in 2017. PoH uses cryptography to record the order of events and the passage of time between those events on the network. In this way, the mechanism helps the system process transactions submitted by many different validators much faster than other networks.
Solana’s ecosystem is quite complex. It consists of many components that work together to make it operable. We’ve listed the most important ones below to help you understand how this system functions and why it’s so unique.
- Proof-of-History — As mentioned, PoH encodes the passage of time into a ledger. Nodes in the network use this record on a trustless basis to verify transactions.
- Tower Byzantine Fault Tolerance — This system ensures that the network keeps working regardless of possible node failures. It functions like a shield that protects the whole system.
- Sealevel — Sealevel is the technology that allows Solana to run numerous smart contracts on the network simultaneously. It’s one of the main reasons why Solana is so fast and cost-efficient.
- Cloudbreak — This component has several important roles in the project. It allows for concurrent reads and writes of the transactional input and establishes a connection between software and hardware. In this manner, Cloudbreak increases Solana’s scalability.
- Gulfstream — This protocol forwards transactions to validators before new ones are added to the network. It clears the mempool area — a type of waiting room for transactions — and significantly reduces confirmation time.
- Turbine — Turbine accelerates Solana’s transaction settlement by splitting data into small pockets that are easier to validate.
- Pipelining — Pipelining is the process of assigning input data to different hardware so that it can be verified and replicated across the network faster.
History of Solana
Solana is built in Solana Labs in San Francisco and supported by the Solana Foundation in Geneva. Anatoly Yakovenko, a former Qualcomm executive, started working on it in 2017. He partnered with Akridge, Fitzgerald, and three others to found the company initially called Loom. They later changed its name to Solana, to avoid confusion with an Ethereum-based project with a similar name.
The project started running on cloud-based networks in mid-2018. The company also published a permissionless, 50-node public testnet around the same time. Solana officially launched in March of 2020 and picked up steam almost immediately. It managed to process more than 40 billion transactions by December 2021.
Solana Native Token
Like other blockchain-based projects, Solana has a native token — SOL. SOL is built on Solana’s blockchain network and has two functions. It serves as means of transferring value, so you can buy, sell, or exchange it for other currencies.
SOL is also a utility coin, which means you can stake it to improve this blockchain’s security. The PoS consensus mechanism helps SOL holders validate transactions by staking this coin. They can also receive rewards and participate in the governance of the project depending on the work they’ve done.
This cryptocurrency doesn’t have a maximum cap, so there will be more coins as more people continue to stake and buy them. There are currently around 330 million SOL in circulation, but its current total supply surpassed 511 million. SOL’s current price is $39.19.
Iowa Crypto Laws
The crypto industry has been the talk of the town in most US states in recent years. Fearing risks like fraud and tax evasion, many of these states have introduced various crypto-related laws and regulations. The Hawkeye authorities did the same.
The state passed several laws related to virtual currencies recently. These IA bills:
- Address the virtual currency taxation rules
- Forbid the state from accepting virtual currency payments
- Recognize the use of blockchain technology and smart contracts in providing transaction records
IA crypto laws also established that digital currency businesses fall under the jurisdiction of Iowa’s Uniform Money Services Act. As a result, they’ve obliged virtual currency dealers to obtain IA money services licenses to legally work with cryptos like Solana in this state.
Where Can I Buy Solana in Iowa?
Nothing is standing in your way if you would like to buy Solana in IA. All you need to do is decide on the method you’d like to use to make this purchase. IA Solana enthusiasts can buy this crypto on a crypto exchange platform or directly from an individual.
These two methods differ significantly, so we’ll discuss them below. Read them carefully to decide on the method you’d like to opt for.
Crypto Exchange Platforms
Crypto exchange platforms are marketplaces where you can buy, sell, or exchange digital currencies. They can be centralized and decentralized.
Centralized crypto exchanges are regulated and licensed platforms. They’re owned and operated by a single authority in charge of their network of transactions. Centralized exchanges are safer and more popular among crypto users.
Decentralized crypto exchanges don’t rely on a single, centralized authority to manage their finances. Instead, they facilitate transactions using self-executing agreements known as smart contracts. They are not as common or safe as their centralized counterparts.
The main difference between centralized and decentralized exchanges lies in the way they allow users to trade. Members of centralized exchanges can exchange cryptos for fiat currencies, while those of decentralized platforms can’t.
If you’re new to the industry and have no cryptos to trade for SOL, centralized crypto exchanges are your best option.
Choosing a Centralized Crypto Exchange to Buy SOL
There are several important aspects you should take note of when picking the platform where you’d like to purchase SOL. For your convenience, we’ve listed and explained them below. Have a look.
- Availability and licensing — Make sure the platform you’d like to join is available in Iowa and has a valid IA MTL. You won’t be able to use it to buy SOL otherwise.
- Reputation — Make a point of thoroughly researching the crypto exchange you plan to join. The platform you go with should have a solid reputation and a positive track record.
- Liquidity — Don’t forget to check what SOL trading volumes the exchange you’re joining boasts. High Solana trading volumes will ensure your transactions are always fast.
- User interface — Visit the crypto exchange you’re interested in and test its interface before joining it. Your platform of choice should be easy to navigate and use on a daily basis.
- Payment options — Remember to look through the list of payment methods the exchange you’re joining offers. This list should comprise enough variety to suit users’ needs with different preferences.
- Fees — Learn about the fees the platform you’re considering imposes on its members. These costs should fit your budget and match the platform’s offer of services.
Buying SOL Directly
Buying SOL directly from an individual is another way you can come by this crypto in Iowa. Like any other, this method has its advantages and disadvantages. On the one hand, you can forgo fees exchange platforms impose and negotiate the price of the coins. On the other, you’ll put yourself at a high risk of being scammed.
If you’re determined to purchase SOL directly, make sure you’re as careful as possible. We advise you to buy from a reliable person and set up the meeting in a public space.
Buying Solana Through a Centralized Crypto Exchange — Step-by-Step Guide
If the previous paragraphs have swayed you into buying Solana through a centralized crypto platform, this guide is all you need. Follow the steps we’ve listed below, and you won’t have any problems.
- Find a reputable crypto wallet and set up an account.
- Go through our tips and choose a crypto exchange platform that suits your needs best.
- Log into your account, find the Deposit section, and select it.
- Pick the payment method you’d like to use and enter the amount you’d like to transfer.
- Confirm the transaction and wait for the funds to appear in your account balance.
- Find the crypto-fiat currency pairing you like to use, input the number of SOL coins you’d like to buy, and submit your request.
- Trade your coins further or send them to your e-wallet to keep them safe.
Solana doesn’t have many years to its name, but it already enjoys an enviable amount of popularity. Its scalability, security, and cost-effectiveness have piqued the interest of global investors and traders alike. Thanks to Iowa’s recent crypto-related regulations, you can legally invest in Solana, too. Simply choose a crypto exchange, follow our step-by-step guide, and make your first purchase. Good luck!