With the ongoing development in the crypto sector, Solana has emerged as Ethereum’s top rival. Solana is a high-speed blockchain network capable of processing over 65,000 transactions per second.
The growing adoption of Solana has captivated investors’ interest in investing in its native token, SOL.
Compared to other blockchain networks, Solana has lower transaction costs, making it a suitable option for investors. This guide will explore the multiple methods to purchase SOL and their advantages and shortcomings.
What is Solana Network?
The Solana project was first developed by the renowned tech expert Anatoly Yakovenko in 2017. The project was launched when crypto was still a new concept after Yakovenko identified that Ethereum and Bitcoin had serious scalability concerns.
He noted that Ethereum and Bitcoin could not process 15 transactions per second (TPS). The scalability concerns forced Yakovenko to develop a unique Layer 1 protocol to house decentralized and scalable applications.
Having gained vast experience operating systems, Yakovenko was committed to creating a unique blockchain network named after the coastal province of San Diego Solana Beach.
How Does Solana Operate?
After launching the Solana ecosystem, Yakovenko invested in distinguishing his project from another blockchain network by integrating the consensus mechanism, combining the proof of history (PoH) with proof of stake (PoS).
The integration of the consensus mechanism enables the nodes and devices storing transaction information on the blockchain to process the transaction seamlessly. The Solana reduced the transaction processing time through the consensus mechanism that does not require data sharing between nodes and devices.
With the ongoing development within the Solana ecosystem, the network can process 65,000 transactions per second. The fast processing speed has made Solana an attractive network for developers. The Blockchain Council has profiled Solana as the quickest and most efficient blockchain network in history.
Also, Solana is considered a cost-effective network, allowing users to pay network fees to process transactions. The developers building on the Solana project that the blockchain network will outpace centralized payment processors in future.
Currently, Solana has supported numerous decentralized finance projects (DeFi), meme coins, non-fungible tokens (NFTs), decentralized applications (dAPPs) and smart contracts. The Solana network has gained prominence as a payment option to node operators.
To ensure the development of the Solana ecosystem, investors are allowed to stake their assets to reap profits.
Where to Purchase SOL?
The growing popularity of the Solana ecosystem has challenged the investor to invest in SOL tokens. You might be wondering where SOL tokens are bought. Lately, exchanges and platform have been offering Solana tokens.
A recent report shows that Solana is listed in over 200 crypto exchanges. However, some exchanges are restricted from operating in certain countries. The investors are advised to select a crypto exchange that is legally allowed to operate in their home country.
Investors are encouraged to conduct due diligence checks to assess whether the crypto exchange conforms to the country’s legal and tax requirements.
Also, the investors can use the decentralized crypto exchange to acquire SOL tokens. Unlike centralized platforms, decentralized crypto exchanges operate without central authority.
How to Purchase SOL?
The investor is required to create an account on centralized exchanges such as Binance, Kraken or Coinbase. The account creation process involves opening an account with your preferred crypto exchange.
This process requires account creation and verification of password and username to complete the security requirements. After account creation, the investor should deposit funds in the exchange to purchase SOL.
On the other hand, investors preferring decentralized exchanges (DEX) to centralized exchanges will be required to have a digital wallet connected to the Solana network. Investors should deposit adequate crypto to purchase SOL tokens.
The digital wallet should be connected to DEX to purchase SOL tokens. The DEX platform requires investors to carefully handle confidential information such as private keys and wallet security. Unlike the centralized exchange, DEX transactions do not involve third parties.
How to Store SOL?
Investors are advised to ensure that the SOL tokens are secure. The centralized exchange offers the customer custodial services for the SOL purchased on the platform. Investors are urged to ensure that their centralized crypto exchange accounts are protected by alphanumeric and two-factor (2FA) passwords.
Similarly, investors who own DEX digital wallets are encouraged to remain the primary custodian of their private keys. The private keys should remain stored in cold wallets with no internet connection.
The investors seeking to hold their SOL tokens until the next bull market are advised to shift their assets to cold wallets. The cold wallet is less vulnerable to hacks than a hot wallet. Investor should not share their private keys with anyone at all times.
