Solana is a public blockchain designed for the transfer of digital assets and the operation of decentralized applications. From a practical standpoint, it can be described as a network people can use to perform token transactions and interact with smart contracts deployed there without a single governing authority. The native token of the network is called SOL. Beyond being a tradeable asset, SOL is the fuel that lets users take actions on the network.
What Makes Solana Different?
All blockchain systems require a mechanism that ensures transactions are validated and ordered. In the case of Solana, they use Proof of Stake (PoS). Validators process transactions and vote on blocks, with their voting power proportional to the amount of SOL delegated to them. Token owners can delegate their SOL without losing ownership of the tokens.
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Term |
Beginner-friendly meaning |
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Solana |
The blockchain network that records transactions and runs applications. |
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SOL |
The token used for network fees and staking. |
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Validator |
An operator that processes transactions and participates in consensus. |
How Proof of History Works
Proof of History (PoH) is a cryptographic clock that is not meant to substitute for Proof of Stake. The algorithm involves generating a series of SHA-256 hashes, where each next hash is derived from the previous one. As such operations cannot be conducted in parallel, it provides a means to prove that time passed and that the order of events took place. Transaction identifiers can be incorporated into the stream, showing where they appeared in the network’s history.
This allows validators to spend less time ascertaining when those events happened. The hash checkpoints allow them to confirm the sequence efficiently. PoH, on the other hand, will allow coordination for ordering and parallel verification.
Why You Need SOL
There are two main functions performed by the SOL token. Firstly, it pays for network fees. All transactions on Solana incur fees that are denominated in SOL tokens and paid by the fee payer. The fee consists of a base amount for signature verification and may contain an optional prioritization fee.
Second, SOL can be staked.
Staking SOL increases the voting power of the validator and makes the staked tokens eligible for earning rewards. These rewards are not static; their amount can vary depending on the environment and the validator’s performance and fee. Because of that, it is a good idea to have some un-staked SOL for fees.
A Sensible First-Step Checklist
Before diving into the ecosystem, make sure you build good habits:
- Set up an honest self-custody wallet and don’t forget where your recovery phrase is stored – it should not be accessible online.
- Keep some SOL in your wallet ready for use, despite staking part of it if you wish.
- Always double-check websites’ URLs, wallet instructions, receiving addresses, and transaction details.
Free SOL Accumulation with RollerCoin
Buying SOL is not the only way to learn about the token, though “free” rewards still require time and may be small. If you want to earn free solana without making a purchase, RollerCoin offers a play-to-earn mining simulator. Users are able to sign up for an account, play retro-inspired mini-games to generate in-game hashrate, direct it to their chosen reward pool, and earn rewards, including SOL.
Consider RollerCoin a gaming method. Start with free activities, review the current withdrawal conditions, and use your own wallet when withdrawing money from the program. Don’t spend money to earn projected profits: they depend on many factors, including exchange rates and market conditions.
Summary
Solana is a rapidly growing blockchain platform, with SOL being its native digital currency used to pay network fees and participate in staking. If you’re new to cryptocurrency, we recommend starting small, securing your wallet and seed phrase, and taking time to learn about how the network works. Good security practices and reasonable expectations allow you to become familiar with the Solana ecosystem and avoid making impulsive purchases or investments.