Vermont leads the way when it comes to technology and innovation. As a result of the state’s enactment of multiple laws, tech companies starting their operations will have an easier time doing business.
There is no doubt that the interest in Solana and other cryptocurrencies is on the rise among Vermonters. The number of crypto transactions in the Green Mountain State skyrocketed during the pandemic and remains steady.
As a result, getting Solana or any other coin in Vermont is easy. Read this guide to learn about the notable crypto, how and where you can buy it, and everything else you need to know before investing.
Table of Contents
What Is Solana (SOL)?
In addition to being a cryptocurrency with a token, Solana is also an open-source platform. Its ecosystem allows users to build decentralized applications (dApps). Even though Solana first became prominent in 2020, it has been around since 2017.
Anatoly Yakovenko, a former Qualcomm and Dropbox employee, created Solana. Together with Greg Fitzgerald, they developed one of Ethereum’s biggest competitors. Solana gets its name after Solana Beach in San Diego, where Yakovenko used to surf.
By the end of 2018, Solana was generating hundreds of thousands of transactions per second on test networks, which helped it raise money from investors. Over $25 million was generated through private and public sales. As a result, Multicoin Capital, Serum, and many other companies expressed interest in the project.
In 2020, Solana held its first ICO, generating $1.76 million in revenue. It was founded the same year by the Geneva-based non-profit — Solana Foundation.
How Does Solana Work?
Solana has a hybrid consensus model, as it combines two mechanisms — proof-of-stake (PoS) and proof-of-history (PoH). The former is an old and well-known consensus mechanism that rewards people for validating new transactions by staking their coins. The latter is an innovative feature Solana introduced, and it operates on time.
Unlike proof of stake, which validates blockchain transactions, proof-of-history verifies their order and the passage of time between them. Simply put, it records the exact time when each transaction took place.
A timestamp is built into every transaction on the blockchain, so the nodes that verify transaction times are not required to communicate with each other. This way, PoH reduces the workload of validators, resulting in faster processing time.
This innovative model allows Solana to process up to 710,000 transactions per second. As a result of its fast and cheap transactions, this hybrid protocol has attracted many investors.
The network’s open-source nature means it can be used in a variety of ways. Developing DeFi platforms (decentralized crypto exchanges), selling, trading, and mining NFTs are some of them. As part of the Solana network, merchants can accept payments directly from customers using its free payment system, Solana Pay. By doing this, businesses can avoid high processing fees.
Solana Token Explained
Solana’s token is SOL. Besides being a utility token, it is responsible for conducting all blockchain transactions. It can be used for:
- Paying fees — The Solana network has to charge fees to its users to run smart contracts or support transactions. Even so, these charges are quite reasonable compared to industry standards. Solana’s average fee is $0.00025 per transaction.
- Investing — Like other popular cryptocurrencies, anyone can purchase, trade, and sell Solana. The value of SOL grew by over 10,000% in 2021, despite its constant price fluctuations. Although it’s impossible to predict the direction SOL will take, investing in it can prove to be beneficial in the long run.
- Staking — Validators are essential for keeping the network secure. Solana chooses them by using the proof-of-stake consensus mechanism. It is not possible for everyone to become a validator. You must have a high level of technical knowledge to perform this role. Validators secure the network and, in exchange, can receive SOL coins or fee reductions as a reward.
Downsides of Solana
Being relatively new, Solana has yet to prove itself among the big players. Although some investors believe there are not too many disadvantages associated with SOL, others see it as not being decentralized enough.
Compared to the ETH network, with over 200,000 validators, Solana currently has a little over 1,100. The higher the number of validators, the more secure the network. However, becoming a validator is difficult and takes a lot of resources and computing power.
Another downside is that Solana is still in its beta phase. Despite its numerous plans for the future, most are a work in progress. Only when they are put into action will we be able to analyze how successful this impressive crypto might become.
Solana in Numbers
Solana ranks among the top ten cryptos despite being relatively new in the market. Compared to Bitcoin, whose total token supply is well known, Solana has a circulating supply exceeding 348 million coins and an unlimited maximum supply. In terms of market capitalization, its value exceeds $14 billion, according to CoinMarketCap.
When SOL launched in April 2020, its price was as little as $0.88. During the next few months, the price remained the same until January 2021, when it began to increase. In July 2021, its price soared, reaching an all-time high of $258 on November 6, 2021. Currently, the SOL token is worth around $41 (as of August 2022).
Crypto Laws in Vermont
Vermont is among the crypto-friendly states that keep up with the latest news regarding the cryptocurrency and blockchain realm. Intending to carve out a legal framework for blockchain technology, legislators passed many laws to foster the captive insurance industry, spur economic innovation, and create new jobs.
The Green Mountain State Governor, Phil Scott, signed Senate bill 269. This Act Related to Blockchain Business Development, created to promote the state’s economic development through blockchain technology, became effective on July 1, 2018.
The same Act allowed blockchain-based companies to register as LLCs, making Vermont the first US state to do such a thing. The law doesn’t specifically refer to DAOs (Decentralized Autonomous Organizations), but it generally applies to companies that make substantial use of blockchain technology.
This was not the first blockchain-related legislation Vermont passed. On June 2, 2016, former Governor Peter Shumlin signed House Bill 868 into law, establishing the state’s progressive stance on blockchain technology. Moreover, Vermont’s money transmitter law permits digital currencies to be used as investments according to House bill 182, signed into law by Governor Phil Scott on May 4, 2017.
Where Can I Buy Solana in Vermont?
If you are interested in buying Solana in Vermont, you have two options — via crypto exchange platforms or from another SOL owner. Here are some details about each choice so you can pick the one that works best for you.
Most crypto users acquire coins through crypto exchanges. Members can buy, sell, and trade different cryptos on these digital marketplaces.
There are two main categories of crypto exchanges — centralized and decentralized. In many ways, centralized exchanges operate like traditional financial institutions. From securing sensitive data to executing transactions, all operations are controlled by a single authority. Their users can legally trade fiat currencies for cryptos and vice versa, as they are licensed and regulated.
Unlike centralized exchanges, decentralized marketplaces operate independently. They are not so reliable and don’t allow purchasing cryptos with fiat currencies. Plus, they are more suitable for tech-savvy users, not beginners.
We recommend you buy SOL through centralized crypto exchanges due to their user-friendliness, security, and flexibility.
Centralized Crypto Exchanges
A perfect crypto exchange can’t be found by following a formula. However, you need to consider a few things before choosing the right platform. To guide you during this process, we’ve compiled a list of features you should look for in your first centralized exchange.
- Availability and licensing — Checking the credentials of an exchange is the first step. The platform should hold a state license.
- Reputation — An exchange’s reputation indicates how reliable and trustworthy it is. You should read current and past user reviews about each platform to gain a deeper understanding of it.
- Supported cryptos — Most reputable crypto exchanges accept a wide range of tokens. Pick a platform that lets you trade SOL and other popular cryptocurrencies.
- Security — Centralized exchanges are safer than decentralized ones. Even so, it’s a good idea to check what security protocols an exchange implements before joining. Having this information will give you peace of mind about the security of your data and funds.
- User-friendliness — Centralized exchanges usually have user-friendly interfaces. To determine which platform boasts the best one, we recommend visiting all sites you’re interested in.
- Liquidity — This is another key feature of every crypto exchange. A platform with high liquidity will have many participants and be able to process transactions faster. Hence, it is important to check your exchange’s SOL trading volume.
- Payment methods — Quality exchanges offer enough payment options for all users. Therefore, make sure the platform you’re interested in joining supports the payment method you typically use.
- Fees — Cryptocurrency exchanges make money by charging fees. Even so, some platforms may be more affordable than others. Before choosing a platform, check the costs it might incur.
Crypto exchanges aren’t everyone’s cup of tea, so you can always buy SOL coins directly. If you use this method, you have to find someone who is willing to sell their coins. Obviously, this method has its pros and cons.
If you buy directly, you might be able to negotiate the price and avoid paying exchange platform fees. However, it is important to know that purchasing SOL in this way is not the most reliable way to acquire it.
There are a lot of scams in the crypto community, so you should be extra careful. You should meet your seller in a public place in the presence of a mediator.
How to Buy SOL Tokens on an Exchange — Step-by-Step Guide
Buying Solana on a centralized crypto exchange is the easiest, fastest, and most secure method. You can buy the tokens on any Vermont exchange by following these steps:
- Get a crypto wallet — Choose a wallet that supports Solana and set it up.
- Pick a crypto exchange — You can use our guidelines to find one on your own or choose one of our recommended exchanges.
- Create an account — Complete the sign-up process and ensure you input the correct personal information.
- Verify your identity — Be sure to submit the necessary documents confirming your identity.
- Make a deposit — You can make a deposit when your account is ready by choosing one of the available options.
- Buy SOL — Choose the SOL/USD pair and input your desired amount. As soon as the exchange processes the transaction, you’ll receive your first SOL tokens.
- Transfer SOL to your wallet — If you aren’t planning to trade your tokens, it’s safer to remove them from the exchange and keep them in your wallet.
With lower transaction costs and faster transactions, Solana is a cheaper alternative to Ethereum.
It is positioned among the top ten cryptos globally, with multiple projects running within its ecosystem. It also allows users to stake their SOL tokens. Nevertheless, considering the volatility of all cryptos, it is an investment that comes with a dose of risk.
Our recommendation is to invest only the amount you are prepared to lose. If you are a beginner in the crypto world, you should delve deeper and follow the latest crypto trends and numbers. Additionally, consulting a crypto expert before investing is a good idea.