We have already covered a variety of projects that aim to fix the main issue that worries the blockchain community all around the world: the potential of scalability becoming a big issue that may hinder the implementation of the technology all together, as it may not have the capacity to cater to the needs of every potential user.
Many proposals have been published taking advantage of systems like new consensus mechanisms to accelerate the validation process of each transaction in the blocks, and many others are working on top of a new concept called sharding, where the state of the chain is split in shards that exists simultaneously, with certain nodes only having to catch up to the state of their respective shard while other nodes are responsible for the synchronization of shards.
However, some are worried that this segmentation goes against the principles of blockchain in which the whole of the information is readily available at any given time, and that is the motivation behind projects like Solana, where they focus on tackling the issue from a different angle than reducing the amount of data that needs to be validated.
Proof of History – A Required Improvement
The two most used consensus mechanism in these days, Proof-of-Work (PoW) and Proof-of-Stake (PoS), are not necessarily suited for handling the amount of transactions-per-second required to be implemented in some of our day-to-day activities that require near-immediate confirmation, like retail purchases.
Inspired by a self-stablished objective of not implementing sharding in any way, the team at Solana developed a completely new consensus mechanism that is able to make their blockchain process nearly 50,000 transactions per second.
Where previous systems required the reconstruction of the hashrate of previous blocks in order to add new ones to the chain, or ask for an amount of cryptocurrency to give a user the right to participate in the validation process, Solana gives each node the task to find a particular timestamp associated with every transaction, and then uses these timestamps to correctly organize the state of the blockchain. This allows for precise, fail-proof reconstruction and incredibly fast processing times, given that the state of the chain is constantly being updated as the most recent transaction is added to it, and also opens the way for the creation and optimization of massive networks.
Where to Go Next?
With a solid and fast structure built and working, the only thing left is to scan the landscape to define where it can be applied. The Solana team has already done their work and found four major fronts where they can succeed: Decentralized exchanges, payments, distributed web services and storage and distributed advertisement. All of these fronts are directly benefitted by the implementation of a digital chain that can withstand their workload, and Solana is that chain.
Decentralized exchanges are the most straightforward use for Solana, as it can be easily implemented and taken use of to establish exchanges where the entire order book and ledger are securely replicated, while the exchange itself is never in contact with the users’ private key and can even reach performance rates of the likes of Nasdaq’s and beyond.
Payments are also a main objective of most projects, but most are limited by the maximum transaction processing rate they can achieve. To be comparable to other great names like Visa and Mastercard, they need to process somewhere between 1,500 and 3,500 transactions per second, and big names like Bitcoin and Ethereum can barely process one transaction every ten minutes or every 15 seconds, respectively. The PoH algorithm powering Solana is, allegedly, capable of handling more than 50,000 transactions, so it may be the first real player in the giants’ court.
In terms of distributed web services and storage, Solana can bring forward a model of completely decentralized cloud services that would cut costs for the user, given that the data will be replicated in the chain instead of a group of servers that need to be kept working and maintained constantly, while also securing all the data from tampering and malicious attacks.
And lastly, another use for such a powerful ledger could be to store ad data to open up new business possibilities available only to networks with numerous and powerful nodes, along with faster validation times and stability. Opportunities like tracking, measurement, rating and industry reporting can become easier and cheaper, potentially revolutionizing web advertisement as we know it.
As it seems right now, Solana might have the tools to build a great platform on top of a solid technology, suited for heavy duty uses without sacrificing security by sharding the blockchain, maintaining a single structure based on principles of time instead of depending on how powerful its nodes are. Their success will be closely tethered to how many uses do the userbase find to their potential.