How To Buy Solana? And Why You Don’t Want To Miss Out on SOL
The crypto space has long been dominated by players like Bitcoin and Ethereum as these titans revolutionized the world in unprecedented ways. However, new players have joined the race for the crown as the space continues to mature.
Coins like Bitcoin created new financial opportunities for millions of people around the world by moving central agents. On the other hand, Ethereum built on this by creating a network that could be used to create complex systems… Further expanding the capabilities of crypto.
As the crypto market has continued to grow, new demands have emerged. This has resulted in thousands of projects and cryptocurrencies making their way to the crypto market. With more than 9.4 thousand coins out there according to CoinGecko, keeping up with these projects can be a challenge.
However, keeping up with what the new stars are and what they aim to achieve is not enough. After all, crypto is all about using and investing in it, which requires you to be able to buy it in the first place.
Well, in this guide we will be talking about one of those projects that have gained widespread attention among crypto investors: Solana. We will not only be telling you all you need to know about what and how it does it but also where to buy Solana. Trust us, this is a project you don’t want to miss on!
What Is Solana?
There is a reason why we mentioned Solana in our article, “What Are The Best Altcoin Investments For 2021-2022?”. Solana is widely considered as one of the projects that could dethrone Ethereum.
Solana is a blockchain network designed and developed with one purpose in mind: To improve the decentralized Finance (DeFi) ecosystem. In case you are unaware of what DeFi is, we recommend this article.
DeFi was one of the major drivers behind the bull run of 2020 during the period known as the “DeFi” summer. This boom allowed new projects and use cases to emerge, further decentralizing the crypto space.
However, it also highlighted a major source of concern… Ethereum’s dominance was becoming a problem. Not only was the network unable to handle the enormous traffic that DeFi generated but its transaction fees increased exponentially.
To improve the DeFi industry and allow it to grow, something had to be done… And Solana was one of the answers to this issue. With DeFi requiring a network able to process transactions quickly and securely, Solana introduced a hybrid consensus algorithm. This approach would allow it to become one of the fastest blockchain networks out there.
Ever since its release in 2020, the network has expanded rapidly as new projects were developed to take advantage of all of its capabilities. Now, the network has platforms, protocols, and dApps in several niches like DeFi, NFTs, Web3, gaming, and much more.
This success has translated to the rise in the price of the network’s token: SOL. Over the past year alone, Solana’s value has grown by over 4300%. While this might make it sound like you already missed out, that is not really the case. To understand why, let’s postpone talking about where to buy Solana to take a look at how it works.
How Does Solana Work?
Solana’s most innovative mechanism is the use of a hybrid consensus algorithm that introduced the concept of Proof of History. Basically, each Solana validator keeps an internal clock that is also encoded, ensuring that the network has a new source of objectivity.
This mechanism creates a historical record that reduces the validations that nodes need to do, improving their efficiency.
Solana also uses Proof of Stake, which allows the network to be highly scalable and energy efficient. This combination of PoS and PoH allows the network to theoretically handle over 50k transactions per second (TPS).
However, there are other features that help Solana stand out from the competition. Some of these features include:
- Gulf Stream: A memory-less transaction forwarding protocol that effectively allows nodes to execute transactions ahead of time by using caching.
- Turbine: A block propagation protocol that facilitates the transfer of data between nodes, reducing the bandwidth needed and increasing performance.
- Tower Byzantine Fault Tolerance (BFT): Improves transaction speed by allowing consensus to be reached by reducing the number of messages nodes have to send, receive, and verify.
- Archives: A special type of node that limits their functions to the storage of data, reducing the workload for validators and allowing them to allocate their resources to essential functions.
- CloudBreak: A special data structure that allows the network to read and write data in multiple databases simultaneously, removing bottlenecks.
Solana also has a native token that can be staked to generate passive gains in the form of rewards for helping the network. This incentivizes participation in the network while also deterring the dumping of the tokens.
The token itself, SOL, has a deflationary mechanism in the form of burning, which ensures the supply of the token diminishes over time. This has the effect of increasing scarcity, which according to basic economic theory results in the token’s value tending to increase.
Why Should You Consider Buying Solana?
As you can see, Solana is not only about increased performance and scalability but also about strong economic principles.
Most crypto enthusiasts won’t understand what being able to process more than 50k transactions per second really means… let us put that into perspective. This is how many TPS you can get with other popular networks according to AlephZero:
- Bitcoin: 7 TPS
- Ethereum: 25 TPS
- Litecoin: 56 TPS
- Cardano (without Hydra): 250 TPS
- IOTA: 1,500 TPS
- Ripple: 1,500 TPS
- Tron: 2000 TPS
- Avalanche: 5,000 TPS
- Cosmos: 10,000 TPS
- Hadera Hashgraph: 10,000 TPS
This should give you an idea of how fast Solana can be. While TPS is an important metric in several niches, it is especially relevant in DeFi. As a niche that aims to take on traditional financial systems, being able to surpass the 2k TPS offered by networks like Visa is essential. Well… Solana does this. While other networks can achieve great speeds by using layer 2 solutions, Solana does this natively.
Let us be clear, the network has still not reached this speed, which is the case for some of the other networks too. These numbers are theoretical and will depend on the number of nodes running and similar factors. However, Solana is already showing speeds of more than 3k TPS at this time despite being a pretty young network… More than enough to surpass the veterans.
This is not the only benefit that Solana brings to the table as the transaction fees are extremely low. If you want to make a payment of $40 for a product or service, would you be alright with paying over $10 in fees when using Ethereum? Probably not. Well, Solana’s average cost per transaction is $0.00025 at this time, which makes it virtually free.
This gap in fees is one of the reasons behind Ethereum’s declining popularity among DeFi developers. Increased congestion, low performance, and high transaction fees have become a major problem for the network, which has forced users to migrate.
While there are other networks like Polkadot and Cardano that have been considered potential “Ethereum killers”, Solana is in a more advanced stage of development.
At the time of writing, it has been less than a week since Cardano launched its Smart Contracts functionality. In the meantime, Solana has already integrated major projects like Tether while also creating a varied ecosystem full of native protocols.
All in all, Solana is a blockchain network that offers incredible speeds, scalability, and low fees while counting with an already vibrant community and portfolio of decentralized solutions. This makes Solana a network that should be considered by every crypto investor… that is our opinion.
Where to Buy Solana?
Now it is time to talk about where to buy Solana. Unlike other relatively young projects, Solana has grown so much in popularity that it is readily available in major exchanges. This also translates to wallet support, with the most popular wallets already offering SOL support.
Solana is available on platforms like eToro, Crypto.com, Coinbase, Bitfinex, Kraken, FTX, and more. However, we consider Binance to be the best option to buy the coin for most users.
As we said in our Binance Exchange Review, the exchange characterizes itself for having a wide range of features. This ensures that no matter if you are a beginner or veteran, Binance will have the features you are looking for.
However, if you are not a fan of Binance or would rather use another exchange, we have other options for you. At this time we have covered 3 other exchanges that support Solana: PrimeXBT, Bitpanda, and Coinbase. Feel free to take a look and choose!
For now, let’s take a look at how buying Solana with Binance works.
Step 1: Get a Crypto Wallet
As with all cryptocurrencies, you will need a crypto wallet to store your new Solana. While Solana is more than likely to be supported by your favorite wallet, it is important you double-check before using it!
If you don’t know what a crypto wallet is, we recommend you check our “What is Cryptocurrency” guide under “How To Store Your Cryptocurrency”. we have written several reviews on some of the most popular wallets out there, which you can find in our “Wallets” section.
While checking these resources might sound cumbersome if you are a beginner… Crypto investing is not to be taken lightly, especially when considering that most of the time you will be 100% responsible for your crypto’s safety.
Some of the most popular wallets supporting Solana are:
|Wallet Name||Type of Wallet||URL|
|Trust Wallet||Software Wallet||https://trustwallet.com/|
|Phantom Software Wallet||Software Wallet||https://phantom.app|
Once you have chosen your preferred wallet and set it up, you are ready to buy your Solana. However, we want to remind you to store your Seed Phrase in a safe place! You don’t want to lose access to your SOL in the future, after all.
Step 2: Create a Crypto Exchange Account
While in this case, we will be talking about Binance, you will find that the account creation process will be similar for other exchanges. The only thing you need to keep in mind is to make sure to do your research before using an exchange you are not familiar with.
To start, head to Binance and fill in the required information before clicking/tapping the “Create account” option. Now it is a matter of following the instructions, which is a straightforward and simple process.
Step 3: Verify Your Identity
To comply with regulations, your new account will have certain limitations once created. To gain access to all the functionality Binance offers, you will need to verify your identity.
This can be done by clicking on the profile icon in the main menu bar followed by “Identity Verification”.
There are 3 verification levels that will give you access to different features and limits. However, we recommend completing the advanced verification process to ensure all restrictions are lifted.
Step 4: Buy Solana Using Debit/Credit Card
Now that you have an account and are ready to buy Solana, you can use your debit or credit card to do so in an easy manner. To buy SOL in this way, you will need to locate the “Buy Crypto” button, click on it, and then choose the “Credit/Debit Card” option.
Fill the form with the information the platform will request and add your card. Once you review the information and finalize the operation, your new SOL will be added to your Binance crypto wallet.
Step 5: Transfer Solana To Your Wallet
If you are new to crypto, you might be wondering why you can’t just use Binance’s crypto wallet to store your SOL. Well, while you can certainly store it there, it is not recommended for security reasons. As a centralized platform, Binance has control of your wallet’s private keys, which means that if it was to be hacked or mismanaged… Your crypto could be lost forever.
For this reason, transferring your SOL to a wallet only you control, is the best way to go. To do this, you need to locate the “Wallet” option located in the menu. Once there, click on the “Withdraw” option you will find on the right side of the “Solana” column.
You will now need to fill how much SOL you want to transfer and paste the address of your Solana wallet. You can get this address by going to your wallet and looking for the “receive” or “deposit” option, followed by choosing Solana.
Once you click on the “Withdraw” option in Binance, you will be sent two codes: One via SMS and the other via email. Just fill the fields for each code and confirm the withdrawal and your SOL will be transferred to your wallet in a matter of seconds.
Now that you know not only where to buy Solana but also what it is and how it works, it is up to you to decide if it is a project you believe in. Personally, we believe Solana is and will continue to be a major player in the crypto industry. Expect Solana to generate gains in the long term as the ecosystem continues to expand. However, if you are expecting to make gains of 1000% over the next month, you might be disappointed.
While Solana is one of the fastest-growing networks out there, we recommend you also look at its competitors. This will ensure you can balance your portfolio instead of betting all your money on a single horse.
This doesn’t mean Solana and its competitors can’t grow at the same time, however. We have listed some of the coins we expect to do well during the next year in our “What Are The Best Altcoin Investments For 2021-2022?” article, so you might want to take a look.
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