The cryptocurrency industry has been thriving in recent years all around the globe, even in the US. Many states have already introduced virtual currency-specific stipulations into their legislature. One of the latest to join this list is Arkansas.
The Natural State added virtual currency transmissions into its definition of money transmission in 2021 and made it subject to licensing under its money transmissions bill. This means that you can buy Solana, one of Ethereum’s fiercest rivals, using any of the exchange platforms that operate in this state completely legally.
If you’re interested in investing in Solana, stay with us to learn more about this crypto, how it works, and where you can find it in Arkansas.
What Is Solana (SOL)?
Solana is an open-source blockchain project created to host decentralized and scalable applications (DApps) and support decentralized finance solutions (DeFi) and nonfungible token (NFT) marketplaces.
Anatoly Yakovenko, a former Qualcomm executive, engineered the project in 2017. However, it was officially launched in 2020 after several testnet phases. Today, the Geneva-based Solana Foundation runs this project, and its blockchain is built at Solana Labs in San Francisco.
Solana’s uniqueness lies in its scalability. Namely, this crypto project makes use of an innovative amalgam consensus model, which is a combination of a proof-of-history (PoH) algorithm and synchronization engine (a version of proof-of-stake (PoS)). As a result, Solana can scale an incredible number of transactions per second on its own, keeping its costs low.
Since scalability is one of the elements most decentralized blockchain protocols find challenging, Solana seems like a perfect solution. It’s decentralized, secure, scalable, and cost-effective.
How Does Solana Work?
The main component of the Solana project is its proof-of-history (PoH) consensus — the only one in the crypto industry that relies on the component of time.
Yakovenko originally introduced this concept in 2017 in a white paper. He explained it as a sequence of computations that records all events occurring on the network, noting their order and the time between them. In that sense, nodes in the network have internal clocks that verify and timestamp the transactions happening within it.
Unlike other protocols, Solana’s design allows it to facilitate message sequencing between its nodes using one leader node. It constructs a transaction chain where the output of one transaction is the input of the next. These processes reduce Solana’s workload and boost its throughput, scalability, and, thereby, usability.
Besides these, numerous other complex computations also take place as part of Solana’s functioning. They include algorithms with diverse functions that add to the protocol, allow it to reach a consensus, and make it secure and reliable.
Solana’s Native Token — SOL
As you know by now, Solana is a blockchain-based project and, as such, has a native cryptocurrency token called SOL. It was first launched in 2020, and it quickly reached the world’s top 10 cryptocurrencies list.
SOL is a regular coin you can buy, sell, trade, or invest in, just like other standard cryptocurrencies. However, like DOT, SOL has another function — it’s a utility token. You can use it for staking and paying fees for transactions and smart contracts on the network. Staking SOL will grant you rewards depending on your activity on the network and allow you to participate in the project’s governance in the future.
A little over 500 million SOL tokens have been created so far, and there are currently over 305 million of them in active circulation. Around 60% of this token’s total supply is in control of the Solana Foundation and its founders, and approximately 38% is left to the general public.
SOL reached its all-time high in early November 2021, when its worth was estimated at $259.96, while its current price sits at $69.19.
Where Can I Buy Solana in Arkansas?
Earlier, we mentioned that Arkansas has recently included virtual currencies like Solana into its money transmission laws. As a result, you can purchase this crypto entirely legally in the state. You can do so by using a crypto exchange platform or directly from a person willing to sell SOL to you.
Crypto exchange platforms are marketplaces where you can buy, sell, and trade cryptocurrencies. They act as an intermediary between crypto sellers and buyers and make money by charging transaction and conversion fees.
Crypto exchanges can be centralized and decentralized. The former allows its users to buy and sell cryptos for fiat currencies, while the latter doesn’t. If you’re planning on using a crypto exchange to purchase SOL and have no cryptos to exchange them for, you’ll have to resort to the centralized version of these platforms.
Centralized Crypto Exchanges
Centralized crypto exchanges are the most popular platforms for trading cryptocurrencies. About 90% of all crypto transactions today occur through these platforms. They’re owned and managed by a company and typically licensed by a local regulatory body.
There are dozens of centralized crypto exchanges operating around the globe today. Some of the more popular ones available in Arkansas are Coinbase, Kraken, eToro, and Voyager.
Picking the right one is not easy, especially if you’re new to the crypto scene, so we’ve decided to help you out. You can find a list of the most important aspects of crypto exchanges below. Use them to help you choose the best platform for your needs.
- Arkansas availability — The first thing you’ll want to check is the exchange’s availability in Arkansas. The most popular platforms in the US also operate in Arkansas, but it doesn’t hurt to verify this.
- Arkansas license — Valid MT licensing is great proof of a platform’s legitimacy. So, we advise you to confirm whether the platform you’re interested in holds an Arkansas-issued license before you join.
- Solana availability — Your next step should be making sure the exchange you’re considering supports Solana and, if so, whether you can buy SOL for USD on it.
- Coin diversity — The crypto exchange you want to join should offer more than several different cryptocurrencies, as you might want to trade your SOL for other coins in the future. So, don’t forget to check what cryptos are available on the platform before you make a final decision.
- Liquidity — The liquidity of the exchange will tell you how popular it is with crypto traders and how quickly you’ll be able to trade your coins using it. So, make sure the platform you’re thinking about joining has a solid trading volume of Solana before you commit.
- Security — You should also pay close attention to the exchange’s security protocols. Make sure the platform you’re picking uses advanced security measures to keep your funds protected against cyberattacks.
- Customer feedback — Another great indicator of legitimacy lies in the exchange’s reputation. So, we suggest you do some research on its history and read customer reviews to see how reliable it is.
- Payment methods — Most exchange platforms work with numerous payment companies, from credit cards to digital wallets. Remember to check the list of payment methods the exchange you plan to join works with to see whether it supports the options you tend to use to make online transactions.
- Fees — All crypto exchanges impose different types of fees on their users. Make sure these costs fit your budget before you join an exchange platform.
Buying SOL Directly
If using crypto exchange platforms seems too complicated, you can always buy SOL directly from a person interested in selling these coins to you. However, this is not the safest way to obtain your first SOL. Unless you personally know the individual you’re planning to purchase SOL from, there’s a high chance you’ll be scammed. Therefore, we suggest you make sure the person you’re buying from is reliable and trustworthy before you go ahead with the exchange.
How to Purchase SOL Using a Crypto Exchange
Buying SOL through an exchange platform can be intimidating if you’re new to the industry.
You can follow our step-by-step guide below to make this process easier:
- Choose a crypto exchange — Use our advice to select the best exchange for your needs and join the platform.
- Pick a crypto wallet — Find a trustworthy crypto wallet that supports SOL and accepts users from Arkansas and create an account.
- Make a deposit — Log in to your crypto exchange account and make a deposit picking one of the available payment methods.
- Purchase SOL — Select a trading pair (SOL/USD if you’re using American dollars for the purchase), enter the number of coins you want to buy, and submit your request.
- Send SOL to your wallet — Use your crypto wallet’s address to send the coins you’ve bought to it for safe storage.
Solana is one of the newest cryptocurrencies that’s been turning investors’ heads recently. Thanks to Arkansas’ recent legal updates, you can legally purchase it in this state in two ways, using an exchange platform or directly from a seller. If you’ve decided Solana is your next investment, read the tips and follow our guide, and you’ll have your first SOL in no time. Good luck!