The History of Solana: The First Blockchain To Use Proof-of-History
One of the fastest recorded blockchain transactions is 10,000 Transactions Per Second (TPS), as assured by Ethereum 2.0, which has shared chains for performing these transactions at such speed. Transaction Speed (TS) is one of the major factors in blockchain development as it also drives network traffic. The increased transaction speed of blockchain results in better data transferring amongst the various parties for confirming the transactions.
One such high-speed blockchain is Solana. Solana blockchain has an attribute of cryptographic time-sampling that can regulate the network traffic and can accommodate up to 65,000 TPS. Solana is thus the fastest blockchain that performs transactions in a blink.
In this article, we’ll understand Solana and its fundamentals and how it works, guiding you through the concept, components and features of the Solana blockchain.
Solana is a public base-layer blockchain protocol that optimizes for scalability. Its goal is to provide a platform that enables developers to create decentralized applications (dApps) without needing to design around performance bottlenecks. Solana features a new timestamp system called Proof-of-History (PoH) that enables automatically ordered transactions. It also uses a Proof of Stake (PoS) consensus algorithm to help secure the network. Additional design goals include sub-second settlement times, low transaction costs, and support for all LLVM compatible smart contract languages.
Solana is similar to the Ethereum blockchain and has its own token, the SOL, and a distributed machine for executing smart contracts and connecting decentralized applications (dApps). On closer view, Solana’s blockchain architecture introduces some novel ideas and is a competitor to Ethereum. Solana’s currency is currently the fifth largest by market cap, with a modest $15 billion market cap at the time of this writing (which, not incidentally, is the midst of 2022’s crypto winter). Solana is also one of the most used blockchains for developing on-chain applications.
With Proof-of-Stake, cryptocurrency owners pledge, or “stake,” their coins to a validator.
A validator is a computer running the blockchains software with its own copy of the blockchain. These validators are the equivalent of miners in a proof-of-work blockchain like Bitcoin’s.
Instead of competing with other computers to complete complex puzzles like in Proof-of-work, validators are chosen to add the next block of transactions based on how large their stake is (how many coins they have pledged to the network), how long they have staked for and a number of other criteria.
The idea is to measure the level of commitment network participants have and reward them for their dedication. The larger the stake relative to circulating supply, the more decentralized and secure the network becomes.
Proof-of-history is a method for proving that transactions are in the correct sequence and found by the right leader.
Solana’s blockchain is broken into slots or periods of time where a validator ingests transactions and produces a block. In this system, leaders are chosen ahead of each slot in order to save time.
A node (or validator) is chosen to be a “leader” of a slot through the proof-of-stake mechanism based on the quantity of SOL held. Each validator is responsible for continuing a count or tally of the passage of time, known as a proof-of-history sequence, and the next block of transactions for the slot they have been chosen for.
How proof-of-history works
- Validator A is assigned to slot one and spends five seconds finding the next block.
- Validator B is assigned slot two and takes five seconds to find the following block, amounting to the passage of 10 seconds.
- Validator C is assigned to slot three and takes five seconds to find a block. By the end, a total of 15 seconds have passed.
It takes each validator the same amount of time to complete this process. We know validator C is assigned to slot three and because each block takes the same amount of time, we know that slot three should only begin at the 10-second mark. Therefore, validator C cannot start before or after the tally has reached 10 seconds.
Because this tally of the passage of time can be seen by all validators, and the slot leaders are chosen ahead of time, everyone knows when a leader is supposed to begin. If there were a fourth validator (validator D) chosen as the leader for slot four, all parties would know that validator D is only allowed to begin at the 15-second mark.
We can trace back the origin of Solana to late 2017, when creator, Anatoly Yakovenko, released a draft whitepaper outlining a novel timekeeping method for distributed systems called Proof of History (PoH). Anatoly formerly worked at Dropbox and Qualcomm and specialized in developing compression techniques and distributed systems.
One of the scalability constraints in blockchains such as Bitcoin and Ethereum is the time needed to achieve an agreement on the sequence of transactions. Anatoly felt his innovative method might automate the transaction sorting process for blockchains, offering a critical component that would allow crypto networks to grow well beyond their current limits.
Yakovenko later collaborated with Greg Fitzgerald, a former Qualcomm colleague, to create a proof-of-history blockchain Testnet. Fitzgerald now occupies the role of Chief Technology Officer (CTO) at Solana. The two published the project’s first official paper and the internal Testnet in February 2018.
Another former colleague of Yakovenko, Akridge Stephen, proposed that outsourcing signature verification might boost transaction performance. Greg and Stephen, alongside three others, joined Anatoly at Solana to start the company that later became Solana Labs.
The veteran team that started Solana also included some former Apple engineers. Initially, they called the project “Loom” but later changed it to prevent confusion with the Loom Network, a prominent multichain Ethereum interoperability service.
In the second quarter of 2018, Solana Labs started gathering money to develop its new crypto network. Multicoin Capital led a financing round for Solana and generated about $20 million in private token sales by the end of July 2019.
The fundraising campaign coincided with Solana’s development on the protocol. This went through various permissionless Testnet stages until the company announced the Tour de SOL public incentive Testnet in the third quarter of 2020.
Solana’s beta Mainnet debuted in March 2020, with innovative contract features and basic transaction capabilities, after gathering an additional $1.76 million through its inaugural auction on Coin list.
Solana Labs is still the network’s primary contributor. On the other hand, the Solana Foundation, a non-profit headquartered in Zug, Switzerland, assists in financing continuing development and expanding the blockchain’s community-building activities.
The Solana blockchain is still fairly new to the web3 space. The idea of running a network sporting billions in assets may raise a few eyebrows, but that’s Web3 for you. Solana looks like it’s going through the process of shaking out bugs to reach a high degree of stability based on the Proof of History concept.
To have an idea on the performance of Solana’s PoH mechanism, here are the average block validation times of different blockchains:
- Bitcoin: 10 minutes
- Ethereum 1.0: 10 to 19 seconds
- Ethereum 2.0: 12 to 14 seconds
- Solana: 800 milliseconds
Solana’s block throughput is really impressive — and it has not gone unnoticed. Institutional investors have poured over $100 million into Solana this year alone. Solana is technologically fascinating and should be an interesting project to watch as it continues to mature.