The popularity of cryptocurrencies continues to grow. People worldwide, including Virginia, enjoy the anonymity, fast transactions, low fees, and many other qualities these assets boast. However, not all cryptos receive the same amount of attention.
Solana is one of the world’s top 10 most popular virtual currencies, with over 30 million active users. If this data intrigues you enough to consider investing in it, you’re in the right place. This article will explain what Solana is, discuss its characteristics, and explore where and how you can obtain this crypto in Virginia. Read on to learn all you need to know!
Table of Contents
Solana is an open-source blockchain-based project officially launched at the beginning of 2020. It was created to support smart contracts, including various decentralized applications (dApps) and non-fungible tokens (NFTs). However, this network’s most notable feature is the capability to achieve high levels of scalability while keeping its decentralization, security, and low costs intact.
Theoretically, Solana can process over 65,000 transactions per second. At the time of its creation, other cryptos’ transactional speed was limited to around 15 per second. They were lagging far behind fiat currency transactions provided by major payment processors like Visa or PayPal. In that sense, Solana’s creation completely revolutionized the crypto industry.
Yakovenko, an ex-Qualcomm executive and the founder of the Solana ecosystem, explained how this crypto worked in his 2017 white paper. Solana runs a unique hybrid protocol that combines two consensus mechanisms — proof-of-stake (PoS) and proof-of-history (PoH).
PoS is a system that sequences messages in the network by letting crypto holders pledge — stake — their coins to a validator. Validators are to Solana what miners are to Bitcoin. They add new blocks of transactions to the network depending on the size of their stake. The staking secures the network, solidifies its decentralization, and allows for its development, so validators get rewarded for their participation. The rewards include SOL (native tokens) and the right to vote on project governance.
PoH represents a sequence of computations that creates a digital record of events on the network. More precisely, the record notes the order and the passage of time between these events. It can also be described as a cryptographic clock that timestamps every transaction. Nodes in the system use this information to process transactions.
The leader node starts the tally, and each subsequent node continues it without consultation with the rest of the network. As a result, transactions are more efficient and effective, which boosts Solana’s scalability and usability in the long run.
Other Solana Elements
The unique consensus mechanism combo that Solana leverages is not the only important component of this network. You can read about other noteworthy elements and their roles below:
- TowerBFT — Tower BTF is an improved version of Practical Byzantine Fault Toleration (PBFT). It uses PoH to reach consensus, avoiding transaction latency and massive messaging overhead.
- Turbine — Turbine is a protocol that breaks data that the Solana network transmits into smaller pockets. This system makes data transfer smoother and more manageable, which, in turn, makes Solana’s transactions faster.
- Gulf Stream — Gulf Stream is a transaction-forwarding protocol that caches and pushes transactions to the edge of the network ahead of time. It eliminates the issue of a transaction-filled mempool and reduces confirmation time. The system allows Solana to reach the high transactional speed mentioned above.
- Pipelining — Pipelining is a transaction-processing unit that assigns input data to various hardware. This accelerates the validation and replication of transactional information across network nodes.
- Sealevel — Sealevel is a transaction-processing engine that allows transactions to co-occur on the same state blockchains. In that way, Sealevel improves the overall runtime of the network.
- Cloudbreak — Cloudbreak is a data structure that enables concurrent reading and writing of Solana’s transactional input. The system makes the network more scalable without the risk of sharding.
- Archivers — Archivers represent Solana’s distributed ledger storage. They are nodes that download data from validators and make it accessible to the network.
Like other blockchain-based projects, Solana has a native token known under the abbreviation SOL. This token is a unit of value you can buy, sell, and trade for fiat currencies or other cryptos. It’s also a utility token you can stake to support the network, as we explained earlier.
Solana’s current circulating supply counts over 347 million, while its total supply equals more than 511 million SOL. This cryptocurrency has no max cap, meaning it can be produced indefinitely. Its initial inflation rate was 8%. However, this number is set to lower annually until it settles on the so-called long-term inflation rate of 1.5%. SOL’s current price is $43.25.
Where to Buy Solana in Virginia
Virginia doesn’t include the transfer of virtual currencies, like Solana, under the definition of money transmission. However, the rules change if those transactions involve fiat currencies. VA crypto/fiat transactions are regulated by the Code of Virginia (Money Order Sellers and Money Transmitters). To that end, organizations that work with both virtual and fiat currencies need to obtain a Virginia MT license.
This legal situation leaves Virginia residents interested in buying Solana with two options. They can purchase this crypto through a licensed crypto exchange platform or from an individual in possession of these coins. We discuss what both of these methods entail below.
Buying Solana Through Crypto Exchanges
Crypto exchanges are platforms that specialize in trading cryptocurrencies. They can be centralized and decentralized. Centralized exchanges are operated by a single authority. They’re usually licensed and regulated and work with fiat currencies. Decentralized exchanges are P2P marketplaces that connect crypto buyers and sellers and facilitate transactions through self-executing smart contracts. They’re not regulated and don’t support fiat currencies.
Licensing, stricter security measures, and fiat currency availability make centralized exchanges the more popular category. So, they’re a more common and convenient choice if you’re not an experienced crypto buyer.
There are tons of centralized crypto exchanges on the Virginian market. Choosing between them can be a daunting task, so we’re here to help. The following list comprises the essential characteristics of a centralized crypto exchange. Take a look at it.
- VA licensing and availability — Your crypto exchange of choice must be available in Virginia and carry a valid Virginia MTL. That’s the only way you can use it to buy, sell, or trade your coins legally in the state.
- Available currencies — Once you’ve checked its license and availability, look for the list of currencies your crypto exchange supports. The longer that list is, the better future trading possibilities you’ll have.
- Good reputation — Some exchange platforms don’t have the best reputation. Make sure you avoid them by researching each exchange you’re interested in. You can find plenty of helpful information online from user feedback.
- Strict security — Crypto exchanges are a common target of cyber criminals because of the funds and sensitive information they hold. So, you must find out what security protocols and privacy policies a platform implements before joining it. Look for exchanges with state-of-the-art encryption and no history of security breaches.
- High liquidity — Platforms with high liquidity provide fast transactions round the clock. You can ensure you’ll enjoy fast transactional speed on your exchange by checking whether its SOL trading volume is high.
- Various payment options — Crypto exchanges collaborate with different payment processing companies. Make sure the platform you intend to use supports your preferred payment method. This way, you won’t have to register with other companies and share sensitive information.
- Low fees — All centralized crypto exchanges charge their users. However, these fees are not the same across the board. Learn about the costs you’ll have to bear as a member of your preferred platform before you join it to ensure they are within your budget.
Buying Solana Directly
The other way you can buy Solana in Virginia involves finding a seller. While this might seem simple enough, there’s more to the process than you’d think. Besides being an SOL holder willing to sell the coins, the individual you’re buying from must be reliable.
There are many scammers in the crypto world, and novices are the easiest targets. If you’re sure direct purchase is how you want to obtain SOL, take some precautionary measures. Make sure you’re buying from a person you know is trustworthy, and bring a mediator with you for the exchange.
Purchasing SOL on a Crypto Exchange — Step-by-Step Guide
Those Old Dominion residents who’d like to buy SOL through crypto exchanges may wonder how that works. You can find all you need to know about the procedure below. We’ve broken it down into simple steps to help you out:
- Research crypto wallets, choose a reputable one, and open an account.
- Use our advice above to compare crypto exchanges and pick the best one for your needs.
- Visit the exchange’s official website and follow on-page instructions to create an account.
- Verify your email address and identity using the verification code and providing the personal information the platform requires.
- Top up your account balance with the fiat currency of your choice by using one of the payment methods available on the platform.
- Purchase SOL by selecting a currency pairing, entering the number of coins you want to buy, and confirming the transaction.
- Send your coins to your crypto wallet to keep them safe or trade them further on the platform.
Solana is one of the hottest blockchain projects in the crypto realm today. Its incredibly high transactional speed and low costs have made it a favorite among many investors worldwide. Thanks to Virginia’s crypto legislation, you can also jump on the Solana bandwagon. All you have to do is select a centralized exchange you like, follow our step-by-step guide, and make your first purchase. Best of luck!