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What is Solana? Is the Super Fast, Ultra Cheap Crypto for Real?

By Jinia07/05/2024


Often regarded as the “Ethereum Killer,” Solana is a cryptocurrency and blockchain protocol built for speedy transactions, energy efficiency, and a decentralized network of validators, making it ideal for mass adoption. At its core, Solana’s open-source network can host a variety of scalable decentralized applications that rival blockchains like Ethereum. 

With a native cryptocurrency aptly named after a small Southern Californian coastal city, SOL tokens can be used for various purposes within the network. These include paying transaction fees, staking to support network security, and participating in governance decisions.

Solana’s architecture addresses several limitations faced by older blockchain networks. Here are some of the standout pros and cons that contribute to its reputation as an “Ethereum Killer”:


  • Highly scalable

  • Energy-efficient and sustainable

  • Negligible network fees

  • Speedy transaction finality

  • Strong development community

  • Highly secure architecture


  • Occasional network outages

  • Complex development architecture

  • Relatively centralized validator network

  • Regulatory uncertainty

Brief History of Solana

Founded in 2017 by Anatoly Yakovenko (a former Qualcomm engineer), Greg Fitzgerald, and Stephen Akridge, Solana was built to tackle the scalability and high transaction costs that plagued existing blockchains like Ethereum and Bitcoin. 

Thanks to his background in distributed system designs at Qualcomm, Yakovenko realized that a reliable clock cloud could simplify network synchronization, resulting in an exponentially faster network limited only by its bandwidth. Yakovenko’s groundbreaking insight led to the creation of Solana’s unique Proof-of-History (PoH) consensus protocol. 

Yakovenko hypothesized that integrating PoH would significantly speed up Solana’s operations compared to those without clocks, like Bitcoin and Ethereum, which struggled to scale beyond 15 transactions per second (TPS). In contrast, centralized payment systems like Visa could handle peaks of up to 65,000 TPS. 

Solana’s architecture, leveraging PoH, overcame this limitation by allowing every node in the network to rely on the recorded passage of time, thereby enabling high throughput and low latency. 

How Solana’s PoH compares to Traditional Systems

Simply put, instead of relying on each transaction being validated sequentially by the entire network, Solana’s Proof of History (PoH) protocol timestamps each transaction as it occurs. Think of it like a synchronized swimming routine versus a dance-off. 

In traditional blockchains, transactions are like dancers taking turns to perform, each waiting for their spotlight (validation), which takes time. Solana, however, is like synchronized swimmers who perform in perfect harmony because they all follow a precise, pre-recorded routine (timestamp), allowing them to move simultaneously without waiting for their turn. 

This synchronization makes Solana incredibly efficient, enabling it to handle thousands of transactions per second, making it faster and capable of supporting a wide array of decentralized applications. This innovative approach set the stage for Solana’s rapid growth, positioning it as a formidable contender in the blockchain ecosystem with the potential to revolutionize transaction processing and decentralized finance.

What are the Best Uses for Solana?

Thanks to its scalability, high throughput, and low transaction costs, Solana’s blockchain network is ideal for a variety of applications:

Tokenized Real Estate:

Solana is built for the efficient tokenization of real-world assets. Real estate, in particular, can be tokenized on Solana, making it easier to sell, buy, and trade property shares on-chain. 


High-performance gaming requires a speedy network with near-instant block finality. Solana is built for speedy transactions and low fees, which makes it ideal for on-chain games where players trade in-game assets. 

Decentralized Finance (DeFi): 

Solana offers a reliable blockchain network for lending and borrowing applications such as Solend, where users can lend and borrow assets seamlessly through an automated market maker. Solana also works well with decentralized exchanges, as the DEXs can leverage Solana’s low costs and speedy transactions to give users efficient capital allocation throughout the trading process. 

Examples of popular DEXs on Solana include Jupiter, which has a total value locked of over $300 million, as well as Radium Orca and Serum. Yield farming protocols also thrive on Solana, as users can earn rewards by providing liquidity to various DeFi platforms hosted on the network. 

Decentralized Autonomous Organizations:

DAOs can use Solana’s efficiency to launch governance voting systems and fund management apps. Solana-based DAOs feature smart contracts and treasury funds that token holders can use to enable collective decision-making. DAOs can also create reputation points through Spolana and award those points to members based on their contributions to the DAO.

Non-Fungible Tokens (NFTs):

Solana’s blockchain already hosts a variety of NFT marketplaces where you can discover, collect, and trade NFTs. Examples include Solanart and Magic Eden, where users can create, buy, and sell NFTs while paying negligible network fees. 

Other use cases for Solana’s blockchain include payment and remittance applications, as Solana’s fast transactions are suitable for micropayments and cross-border remittances. 

Supply chain management platforms are also operational on Solana thanks to the network’s capacity to transparently track goods through the supply chain, thus limiting fraud cases. 

Just How Fast is Solana?

Solana can theoretically handle transaction speeds of up to 65,000 transactions per second. This represents a monumental leap in performance and scalability compared to legacy blockchains such as Bitcoin and Ethereum. Even in a practical scenario, Solana’s network can consistently achieve around 2,000 – 3000 TPS, which still outperforms most blockchains. 

In terms of latency, Solana boasts a block time of about 400 milliseconds, meaning it can finalize a block of transactions in under one second. In comparison, Ethereum can only handle around 15–30 TPS with a block time of 13 to 15 seconds. Solana network speeds are at par with Visa’s network, which can handle around 1,700 TPS and have near instant latency speeds. 

Why Are Companies Like Visa Taking an Interest in Solana?

Solana’s remarkable blockchain performance has caught the attention of Visa – the giant payment processor. Recently, the Visa team has closely followed the technical innovations around blockchain technology while stating that Solana’s blockchain stands out for its potential to be the network to drive mainstream payment flow. 

The global payment giant issued a statement last September showing plans to accelerate credit card payments in USDC on Solana’s blockchain. Solana’s capacity to handle a high transactional throughput aligns well with Visa’s needs. Also, Solana’s low transaction costs make it economically viable to process micropayments in everyday credit card usage. 

What was Solana’s Relationship to FTX, Sam Bankman-Fried?

Solana (SOL) had a significant and intricate relationship with Sam Bankman-Fried and his companies, FTX and Alameda Research. Bankman-Fried revealed during his fraud and conspiracy trial that he began purchasing SOL tokens at just 20 cents each, funded by Alameda’s operating profits and third-party lenders. 

This early investment reflects the deep ties between Solana and Bankman-Fried, who heavily promoted Solana’s blockchain and invested substantially in its ecosystem. His enthusiasm for SOL was further highlighted by his notorious offer to buy all available SOL tokens for $3 each. At the peak of 2021’s bull market, Solana’s price soared from $2 to an all-time high of $260. Some of the attention gathered by Solana at the time was attributed to Sam Bankman-Fried’s advocacy of SOL. Sam even went as far as creating a decentralized exchange on Solana called Serum. Sam’s previous success with FTX prior to its collapse also contributed to Serum’s success. 

This close association led to SOL being dubbed a “Sam Coin.” However, the collapse of FTX had devastating effects on the Solana ecosystem, leaving its community striving to recover from the ensuing turmoil and dissociate from Bankman-Fried’s shadow. Solana did recover, however, and by 2024 it had recovered much of the value it lost in the bear market.

It’s important to note that while SBF purchased a considerable amount of SOL, he was never on the development team behind the coin.

Why Are Memecoins/NFTs Shifting to Solana?

At the moment Solana is the top choice for meme coin and NFT issuers looking for a fast, scalable, developer friendly blockchain network for their projects. Compared to Ethereum’s constant network congestion and skyrocketing fees, Solana offers a reprieve that has seen most projects launch on its network. 

As mentioned, Solana is faster, cheaper, and boasts a strong community, thus giving developers and meme coin launchers a significant advantage. While developing on Solana might be a bit more complex than Ethereum, Solana offers a robust ecosystem of developer tools and support that makes it easy to deploy and maintain their meme coin and NFT projects. 


Solana has quickly emerged as a formidable contender in the blockchain ecosystem. Solana’s impressive Proof-of-History protocol allows for speedy transactional throughput, low latency, and cost efficiency that is attractive even to mainstream players such as Visa.

Despite facing challenges such as occasional network outages and regulatory uncertainty, Solana’s robust architecture and strong community make it a top choice for developers and investors alike. 

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Jinia is a fintech writer focused on the cryptocurrency market and passionate about blockchain technology. With years of experience, she contributes to some of the most renowned crypto publications such as Cointelegraph, Coinmarketcap and others. She also has experience writing about the iGaming industry.

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