Where to Buy Solana (SOL) Crypto Coin (& How To): Guide 2022

Solana is a high-performance blockchain for creating scalable decentralized applications.

Solana has some innovative solutions to some of the most common challenges that blockchain faces. One of the biggest ones isn’t new. Scalability has been a hot topic in the blockchain community, and one of the biggest reasons why many people doubt that a decentralized blockchain could replace centralized payment systems like Visa.

Bitcoin was one of the biggest breakthroughs in bridging trust and the creation of new money, but it probably isn’t going to be the platform that creates a decentralized global settlement system. Like many of the blockchains that exist, it simply can’t settle transactions fast enough to be practical as a global platform.

Solana has a good solution to the scalability dilemma, and it also has some other great ideas that could help blockchain enter its next phase of development.

Learn more about Solana below and find out where and how to buy Solana’s native token SOL in our complete guide.

What is Solana?

Solana was founded in 2017 by Anatoly Yakovenko, a former executive at Qualcomm with vast experience working with decentralized and distributed systems, alongside working on compression algorithms for Dropbox.

Anatoly joined forces with CTO Greg Fitzgerald and Chief Scientist Eric Williams to create a trustless and distributed protocol that encodes the passage of time within the data structure and allows higher scalability than common layer 1 blockchains.

Solana Features

Solana has created eight key innovations that may change how blockchain is implemented as a decentralized system. It has implemented Proof of History (PoH), a protocol to embed passage of time into the blockchain data structure, and integrated it with TowerBFT the system’s Proof-of-Staked based consensus mechanism.

By using PoH, which is a high frequency Verifiable Delay Function (VDF), Solana hopes to eliminate the issues which have given rise to other potential solutions, such as sharding.

A Verifiable Delay Function is a function that requires more computational time to evaluate than to verify. Solana uses a serialized, recursive SHA256, periodically sampling the count and hash, as an effective VDF. This data structure takes real time to generate given the specific SHA256 instructions included on CPUs and can be verified in parallel by splitting the hash chain across multiple GPU cores. According to the company:

“Solana’s specific implementation uses a sequential preimage resistant hash that runs over itself continuously with the previous output used as the next input. Periodically the count and the current output are recorded.

For a SHA256 hash function (also Bitcoin’s hash algorithm), this process is impossible to parallelize without a brute force attack using 2¹²⁸ cores.

We can then be certain that real time has passed between each counter as it was generated, and that the recorded order of each counter is the same as it was in real time.”

Integration With TowerBFT

The use of the PoH ledger allows a user to compute the state of all the nodes with a fraction of the messaging overhead of most PoS systems. It also works with Solana’s version of PBFT (Practical Byzantine Fault Tolerance)  as the network’s clock, allowing the protocol to encode vote lock-outs in the ledger.These lock-outs are used to ensure that Validators (block producing nodes) aren’t able to vote on two separate forks of the blockchain at the same time. If an attempt is detected, the malicious Validator will be penalized and have his stake slashed.

Practically, each time a validator votes for a specific version of the ledger at a specified PoH height, there is a lockout that is associated with that vote. That validator is restricted from voting on a future version of the ledger that doesn’t contain that vote for a specified amount of PoH time (w/out the risk of slashing). Each additional vote on a ledger increases (doubles) the vote lockouts of each previous vote, creating an exponentially growing commitment to safety (consistency) on the given branch.

Proof of Stake

TowerBFT thereby provides the slashing rules that underlie Solana’s Proof of Stake consensus architecture. In this design, validators’ ledger votes are weighted by the amount of capital (SOL) they have locked at stake while validating.

Valiators can also receive tokens from non-validating token holders and stake those tokens on their behalf. Rewards are distributed to validators in proportion to their stake, so non-validating token holders can earn rewards by delegating to a validator and receiving the associated rewards, minus a commission fee taken by the validator.

Solana’s block production is determined by a randomly generated leader schedule, which is set according to his proportion of the total stake at the start of an epoch. That is to say, a validator is expected to be elected leader with a frequency that is commiserate with their proportion of total stake (e.g. a validator with 20% of total stake will represent roughly 20% of the leader schedule)

Rewards for block production will be paid by both inflation, that is expected to reduce over time, and by transaction fees.

Ideas that Matter

The novel use of PoH, TowerBFT and PoS aren’t the only innovations that Solana is bringing to the table. The company has also created other viable systems that address some of the shortcomings in the first generation of decentralized blockchains.

Archivers

At full capacity, Solana estimates that its blockchain would generate roughly 4 petabytes of data on an annual basis. If it were a requirement that a full node store this data, it would introduce a huge barrier to entry for participation in the protocol.

To address this, Solana is able to leverage PoH to stripe and store the growing ledger across storage light-clients (Archivers). This means that the ledger can be split up and distributed across many network participants with no single participant needing to store the entirety of the ledger while the network can ensure multiple redundancy of the global ledger. Additionally, this provides a low barrier to entry to become involved with Solana as a network participant. All is needed is some extra storage space and an internet connection and it is possible to begin earning Solana tokens are rewards for participating as an Archiver on the network.

Solana plans to incentivize full nodes with an estimated 3% of SOL inflation (yearly), which is a clear benefit over Bitcoin. Although Bitcoin is the most valuable blockchain in the world when measured by market cap, full nodes aren’t incentivized.

Turbine

The amount of time it requires to propagate all blockchain data to all nodes can be a major hindrance to scalability, because of the lack of bandwidth.

Solana thinks that the answer is to break the data down into packets, which is how BitTorrent distributes huge files with relatively small amounts of bandwidth. Turbine leverages the entire network to move data and allows nodes to do more with less.

Sealevel

Solana thinks that parallel validation can be applied to smart contracts, and that the entire network can benefit from gains in efficiency.

According to Solana:

“Solana’s runtime can process tens of thousands of contracts in parallel, using as many cores as are available to the Validator. This is because Solana transactions describe all the states a transaction will read or write while executing. This not only allows for non-overlapping transactions to execute concurrently, but also for transactions that are only reading the same state to execute concurrently as well.”

It is clear that Solana has created an integrated blockchain platform that offers up well thought out solutions to some of the biggest issues that decentralized blockchains face as they grow in popularity.

The SOL Token

Solana also has a token, called SOL, which can be passed to nodes on the Solana blockchain for running an on-chain program or validating its output. Solana says that:

“…a SOL may be split as many as 34 times. The fractional SOL is called a lamport. It is named in honor of Solana’s biggest technical influence, Leslie Lamport. A lamport has a value of approximately 0.0000000000582 sol (2^-34).”

Solana Wallets

Software Wallet

Hot wallets, also called software wallets, are one of the most popular cryptocurrency storage options. They are always online, hence the affiliation with the ‘hot’ tag. Investors can easily get a hot wallet once they open an account with a crypto exchange. This allows them to store and manage their private keys, which prove their ownership of their assets to the blockchain network. Hot wallets are usually more convenient for everyday crypto transactions and can be custodial or non-custodial.

A custody wallet is responsible for storing assets to an exchange or a third-party platform. The user only places an order for a transfer or receipt, and the exchange signs off on the transaction, much like the traditional banking system. Meanwhile, a non-custodial or self-custody wallet gives the full responsibility to the end-user.

Hot wallets are usually free, but they are largely considered less secure due to their constant internet connectivity. An instance of a hot wallet is the Binance Wallet.

Hardware Wallet

A Hardware wallet is a device which has been created to provide an extra layer of security when interacting with your various cryptocurrency wallets.

Normally you would use your private key to move funds, the problem is though, if your computer has been compromised with malware or a virus, it is possible for your private keys to be captured and used to steal your funds.

With a hardware wallet, the private keys are stored on the device and never exposed to your computer, which means even if you are infected with such a program your private keys will remain safe. These options are safest way to store your crypto if you have more than a small amount.

Popular examples of cold storage offerings are the Ledger and Trezor line of hardware wallet solutions, read our reviews:

Mobile wallet

A mobile wallet is essentially a hot wallet on a smartphone device. They offer users an even more convenient way to use their coins for daily activities. Mobile wallets store and manage users’ private keys while enabling them to pay for things they love with their digital assets.

These wallets are usually free and always online for transactions to be processed. Popular mobile wallets are eToro Money Wallet and Coinbase Wallet.

Desktop wallet

A desktop wallet is a PC version of a hot wallet. It is essentially software that an investor downloads into their personal computer or laptop for easy interaction with their digital coins. They also offer a browser extension which allows users to interact using an extension instead of downloading the entire software. Desktop wallets are also hack-prone due to their online nature. A popular example is the Exodus Wallet.

Paper Wallet

The paper wallet is arguably the oldest form of crypto wallet. They are no longer common in the modern crypto industry. It contains users’ public and private keys. The paper wallet is the least secure type of wallet as it can easily be lost, stolen, or torched.

How to Buy Solana on Binance

After exploring where to buy and the coin’s use cases, the next thing is to explore how to buy it for your portfolio. Binance is our recommended exchange, so we’ll explore how to purchase the asset using Binance.

Step 1: Sign Up

Go to the Binance home page and click on “Register”.

Binance allows investors to register using their mobile phone, email address, or Google account. Most users choose the first two options and provide their phone numbers, emails, and desired passwords. A link will be sent to their registration channel of choice, and investors can click on it to authenticate their accounts.

Step 2: Verify Your Identity

Like many other regulated brokers, Binance requires that investors verify their identity before commencing their purchase.

To complete the process, visit the “Identification” tab. Investors will have to share personal information, their proof of residence, and a government-verified means of identification. This process should take no more than a few minutes to complete.

Step 3: Deposit Your Funds

Next, investors will have to deposit into their Binance wallets. The exchange makes deposits possible using payment processors, wire transfers, bank deposits, and direct crypto transfers. And its required minimum deposit is $10.

To make a deposit, go to the “Payment” section and click “Add a new payment method” to enter payment details. Alternatively, investors can click the “Buy Crypto” button to select a payment method and complete their transfer.

Step 4: Buy

With a funded wallet, investors are ready to make a your purchase. Head to the “Buy Crypto” section and enter the desired amount. Click on “Continue” after reviewing the terms, and the wallet should be updated immediately.

Conclusion

Solana is working to create scalability solutions for decentralized blockchain systems, and it has addressed some of the biggest issues that decentralized platforms face. By removing sharding from its design, Solana makes network-wide validation faster, and potentially more secure in the long-run.

The Solana blockchain has the potential to match a platform like Visa, without any sort of centralized system. The non-linear architecture that Solana employs may force other blockchain developers to rethink linear blockchain systems, due to their inherent limitations.

Proof of History (PoH) protocol is an interesting way to remove the problem of time from a blockchain, and the system that Solana may be successful in creating a global relative time standard for decentralized blockchain operations.