Tennessee is among the US states that have realized the importance of emerging technologies. With the appearance of cryptos and blockchains, the Volunteer State has been trying to fill the gap between innovation and legislation. Therefore, it has proposed several bills intending to regulate this sphere. The latest legislation allows LLCs to register as decentralized organizations.
If you are interested in Solana or any other crypto, you would be pleased to know that Tennessee also proposed a bill that would allow the state to invest in cryptos and NFTs. And if you want to know more about Solana, its distinctive features, and where you can buy it legally, stay with us until the end.
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What Is Solana (SOL)?
With over 20,000 cryptocurrencies in circulation, Solana ranks among the top ten. It is an open-source blockchain project that provides a scalable, secure, and, most importantly, decentralized platform.
Solana’s key advantage over Bitcoin is its capability to develop decentralized applications (DApps). Moreover, Solana supports decentralized finance solutions (DeFi) and non-fungible token marketplaces (NFT).
This promising cryptocurrency was created in 2017 when Anatoly Yakovenko partnered with Eric Williams, Greg Fitzgerald, and Raj Gokal. The four created this infinitely scalable blockchain and named it after Yakovenko’s favorite beach — Solana. However, Solana was not launched until 2020. This project is currently run by the Geneva-based Solana Foundation, with its blockchain created by the San Francisco-based Solana Labs.
With more than $25 million raised through public and private sales, Solana has attracted the attention of several prominent crypto companies, including Serum, Multicoin Capital, CMCC Global, and more.
Serum is one of the most successful projects built on the Solana blockchain. Aside from providing low gas fees and low latency, this decentralized derivatives exchange can offer high liquidity to its network.
Solana’s network also offers a free payment system, Solana Pay, which merchants can use to accept direct payments from customers. Consequently, businesses will not be charged high processing fees.
How Does Solana Work?
The Solana network is able to outperform other more established crypto projects by using a patented consensus mechanism known as proof of history (PoH). The system labels real-time transactions with time stamps.
By using it, nodes no longer need to communicate with one another when they produce new blocks. This results in higher throughput and better overall efficiency for Solana.
Thus, Solana can handle as many as 50,000 transactions per second. Visa, on the other hand, can process up to 1,700, while Bitcoin has only 4.6 transactions per second.
As a result of its remarkable speed, Solana offers significantly lower gas prices than other similar networks. It only charges $0.01 per transaction.
Due to this and many other factors, Solana is becoming a more popular crypto investment option. With continued growth, this new network could surpass even the most famous cryptocurrencies, like Ethereum.
What Makes Solana Unique?
Solana was designed to address the main problems cryptocurrencies face. This is known as the blockchain trilemma, first described by Ethereum creator Vitalik Buterin. In reality, there are only three main problems with every blockchain — scalability, security, and decentralization.
The drawback is not that you can’t attain these three, but rather that you can’t achieve all three simultaneously. For example, despite being completely decentralized and highly secure, Bitcoin is not sufficiently scalable. Ethereum is also somewhat similar in this regard.
However, Solana appears to have solved this issue the most effectively. Although Solana has been able to achieve incredible levels of security and fast speeds, some decentralization has been sacrificed in order to increase scalability.
This is evident through the fact that around 60% of all SOL tokens on the market are owned by the Solana Foundation and its founders. However, the blockchain trilemma can be solved if more independent validators are added to the mix in the future.
SOL Token Explained
Solana’s native token is SOL. This cryptocurrency can be used for staking, paying for smart contracts, or transaction fees. Token staking allows users to safeguard the network and earn rewards simultaneously. They are rewarded based on how much they stake.
SOL owners pledge their tokens to validators who handle transactions and operate the network. The more coins you delegate to a validator, the more transactions they generate. Whenever they write a transaction, they share benefits with their delegators.
Unlike Bitcoin, Solana does not have a cap on its supply. Currently, it has a circulating supply of almost 347 million, and its market capitalization exceeds $14 billion.
Nevertheless, it is worth noting that Solana is highly volatile, just like other cryptocurrencies. Due to its constant price fluctuations, its future direction is impossible to predict. Thus, before investing in Solana, you should familiarize yourself with how this cryptocurrency works.
Crypto Laws in Tennessee
Tennessee recognized the importance of cryptocurrencies and blockchain technology. Thus, it was one of the first states to approve the use of blockchain smart contracts by introducing Senate Bill 1662 in 2018.
However, the Volunteer State didn’t stop there. In 2022, state Representative Jason Powell proposed Bill 2644, allowing the state and all its municipalities and counties to invest in NFTs and digital currencies. Lawmakers aim to make Tennessee a US blockchain hub by implementing these crypto-friendly regulations and attracting crypto companies and inventors.
Powel also asked Tennessee lawmakers to create a study committee to develop a favorable economic environment for blockchain and cryptocurrency and become the most forward-thinking and pro-business state regarding these technologies. The task of such a committee would be to study cryptos, blockchain, and NFTs and decide which laws apply to this sphere.
Noticing that Decentralized Autonomous Organization (DAO) assets could grow to $1 trillion over the next few decades, the Tennessee governor has signed a bill to allow DAOs to register as LLCs. Being the second state that granted DAOs the legal status made Tennessee a trendsetter for blockchain corporate governance.
Where Can I Buy Solana in Tennessee?
Buying Solana or any other cryptocurrency in Tennessee is not illegal because Tennessee has a regulated crypto market. It comes down to two options — centralized cryptocurrency exchange platforms and direct purchase from another SOL holder.
It is also possible to trade cryptos on a decentralized platform. However, you are unlikely to find them as safe or reliable as centralized ones. You cannot buy crypto with fiat currencies on these exchanges, and they are more suitable for tech-savvy users but not for beginners.
Therefore, we will discuss the two main options below. After that, you can choose which one suits you best.
Centralized Crypto Exchanges
The most popular way to purchase SOL or any other cryptocurrency is through centralized crypto exchanges. These platforms facilitate the sale, purchase, and trade of cryptocurrencies.
Centralized exchanges have one central authority managing the network of transactions. The company is accountable for executing transactions and safeguarding user data. Furthermore, users must undergo a KYC procedure before using its services.
When considering an exchange, you should keep the following factors in mind:
- Availability in Tennessee — Although most crypto exchanges in the US are regulated nationwide, it is still vital that they are licensed in Tennessee.
- Accepted cryptocurrencies — Make sure you study the assets each exchange offers. Most major cryptos are available everywhere, but some smaller tokens like Solana aren’t. To make informed decisions, it’s essential to understand which exchanges offer what options.
- Security and privacy — Take your time to study the exchange’s security protocols, as your personal and financial data needs to be protected at all times. Ensure that your funds are stored in a secure location and that there haven’t been any cyberattacks in the past.
- Reputation — Learn more about the platform’s reputation by reading its ratings and comments. Check out their social media profiles and Google reviews since these are the places where most people leave comments.
- Liquidity — The exchange may have SOL available, but that does not mean there is enough to trade. In the absence of sufficient trading volume, you will not be able to make a single trade at any given moment.
- Fees — Most centralized exchanges charge fees for transactions and withdrawals. Thus, you should pick exchanges with the lowest fees to avoid losing money.
- Limits — Every exchange has a maximum trade, deposit, or withdrawal amount. To avoid disappointment, ensure you fully understand all the limitations before committing.
- Payment methods — Most exchanges accept credit cards, debit cards, and bank transfers as payment methods. Be sure that the exchange you’re considering offers your usual payment method.
- User interface — Study the platform’s interface. Newcomers to the market may find some options harder to use and navigate. Try using the exchange for a while to determine whether it is convenient for you.
Aside from buying SOL on a centralized exchange, you can also purchase it directly from someone who wants to sell it. Even though it is faster and easier than finding the right exchange platform and going through the entire process, it is also more hazardous.
There are two sides to the coin – you can profit from a lucrative deal or lose everything you own to a scammer. Therefore, if you are considering a direct purchase, choose a trustworthy seller, perhaps someone you know or someone with solid references. Plus, arrange a meeting in a public place to minimize the risk of anything going wrong.
How to Buy SOL on an Exchange — Step-by-Step Process
Buying SOL or any other coin on any exchange is generally straightforward. In case you have never done it before, here are some instructions that will walk you through the process:
- Set up a wallet — Choose a crypto wallet that supports SOL and open an account. If you want to keep tokens for a long time, you’ll need to store them safely.
- Pick an exchange — Review our recommendations and learn all you can about exchanges to make an informed decision.
- Visit the site and set up an account — Go to the official exchange site and sign up. After providing personal information, there is usually a verification process.
- Make a deposit — Once your account has been verified and ready, you can choose a payment method and deposit money. Most likely, you will receive your money right away.
- Buy SOL — Select the USD to SOL trading pair and buy the desired amount.
- Withdraw SOLs to your wallet — To store your tokens more securely, transfer them to your wallet. However, if you plan to trade them soon, you should keep them on the exchange.
Despite being relatively new crypto on the market, Solana is one of the most popular cryptocurrencies. With its speed, security, and network scaling capabilities, it is expected to attract more and more investors in the future.
Many regulated and legalized exchanges operate in Tennessee, where you can buy Solana tokens. Take your pick from our list, and you’ll be on your way to owning your first coin in no time.