Solana is now relatively unknown outside of the crypto culture. However, insiders believe the blockchain network is intriguing for a number of purposes, starting with its amiable inventor, Anatoly Yakovenko, who spent more than a dozen years as an engineer working on wireless protocols at Qualcomm and who claims to have had a lightbulb moment many years ago after two coffees and a beer in a San Francisco cafe.
His main concept was to provide a chronological archive to move up “consensus,” this is how choices are taken on blockchains, which are peer-to-peer networks in and of themselves.
At the moment, representatives of different blockchains achieve agreement by solving a cryptographic problem, a process known as “proof of work.” These miners are paid with cryptocurrencies for their work, but the operation takes an hour in the case of Bitcoin and a minute in the case of Ethereum, and it is very energy-consuming, which is why neither Bitcoin nor Ethereum has proven to be quite scalable. (Elon Musk listed Bitcoin’s strong dependence on fossil fuels earlier this week as the explanation why Tesla no longer accepts Bitcoin as payment for the company’s electric cars.)
But there is another choice. Indeed, cryptocurrency enthusiasts and developers are enthusiastic about Ethereum and other currencies that are migrating to a modern scheme known as “proof of stake,” under which people who choose to lock up a certain sum of their cryptocurrency are invited to activate so-called validator tech, which allows them to store records, perform transactions, and introduce new blocks to the blockchain. “Validators,” like miners, carry on the task of earning more bitcoin, but they need much fewer specialized machinery, allowing more users to participate. Meanwhile, since further validators will join a network, the agreement can be achieved more quickly.
Yakovenko is ecstatic about the shift and he isn’t cheering against Ethereum, claiming it would be “devastating for the whole company” if Ethereum couldn’t complete the move to proof of stake, considering its mindshare and nearly $500 billion market cap.
Nonetheless, he claims that even evidence of stake is insufficient. He claims that even with proof of stake, miners — and bots — have advance access to transaction details, allowing them to trick users or front-run transactions since they have power over transaction ordering.
Enter Yakovenko’s huge theory, which he calls “evidence of history,” under which the Solana blockchain has created a sort of coordinated clock that, in turn, assigns a timestamp to each transaction and disables miners and bots from deciding which transactions get registered into the blockchain in which order. According to Yakovenko, doing so provides better protections and “censorship resistance.”
According to a recent Solana explainer in the outlet Decrypt, Solana has also innovated in other respects, such as routing transactions to validators well before the previous batch of transactions is finalized, which apparently aims to “maximize validation pace and increase the number of transactions that can be processed both simultaneously and in parallel.”
“Basically, the speed of light is how far we will let this network go,” Yakovenko explains.
Solana, which has offered tokens to developers but never shares in the firm, certainly has many people optimistic about its prospects. Solana has listed in recent interviews by both investor Garry Tan of Initialized Capital and CEO Joe Lallouz of the blockchain infrastructure company Bison Trails as one of the ventures they find most exciting right now. (It is presumed that both have their tokens.)
Others claim behind the scenes that, while they recognize the developer advantages and the need for more scalable blockchains than Ethereum, Solana also needs more developer mindshare to show its long-term value, and it isn’t there yet. According to Solana, there are currently 608 validators assisting in the security of the Solana Network, as well as 47 decentralized applications (or “dapps”) controlled by Solana. Meanwhile, as of late December, there were approximately 33,700 active validators assisting in the security of “Eth 2.0,” and 3,000 dapps operating on the Ethereum network as of February.
To be honest, the Ethereum network launched in 2015, giving it a three-year head start on Solana. Meanwhile, Solana has its own lead, according to Yakovenko, who is headquartered in San Francisco and has recruited a scattered team of 50 workers, including several former Qualcomm colleagues. When asked about other projects that have adopted a proof-of-concept methodology, he states that while it’s “all open access” and “anybody can go do it,” “no set of our main rivals has said they’re going to rework their framework to use this.”
One possible explanation is that it is almost comically confusing. “It simply requires a lot of effort to develop these systems,” says Yakovenko. “It takes two or three years to create a new layer one because you can’t even take a concept from one and put it in the other. If you manage to do so, you can put yourself back at least six to nine months and can add glitches and vulnerabilities.”
In either case, Solana, which has a market cap of $12 billion, isn’t involved in dealing with Ethereum and other cryptocurrencies on any front, according to Yakovenko. Its true goal is to fully destabilize Wall Street and the rest of the financial markets.
He is aware that it appears absurd. Although, in his opinion, Solana is constructing “a free, equitable, censorship-resistant global marketplace” that is superior to the New York Stock Exchange or some other means of settling trades. It’s definitely a far bigger opportunity than he expected when he sat in the cafe.
“Everything we do to make this thing quicker and faster succeeds in stronger censorship resistance and, therefore, better markets,” he said. “And price discovery, I believe, would be the game-changer for open public networks. Will we become the price discovery engine of the world? It is an intriguing question.”