New Mexico has a long history of embracing new technologies, including Solana and other cryptocurrencies. Albuquerque using cryptos as payment for city services in 2014 indicated that the state was open to this new technology. Plus, the Land of Enchantment has favorable regulations and a supportive crypto community, making it a perfect environment for crypto businesses.
If you are interested in Solana, stay with us and learn more about how it was created, what it is used for, and where you can buy it safely.
What Is Solana (SOL)?
Solana is an open-source blockchain-based project launched in 2020. Aside from being famous for its very low transaction cost and famous scalability, Solana supports smart contracts, various decentralized applications (DApps), non-fungible tokens (NFTs), and enables decentralized finance (DeFi) solutions. It is estimated that more than 4,000 DApp projects run on its network.
The former Dropbox and Qualcomm employee, Anatoly Yakovenko, created Solana with Raj Gokal, Greg Fitzgerald, and Eric Williams back in 2017. They wanted to create a blockchain-based project that would be on par with brands like Visa and Mastercard regarding transaction speed.
Since many cryptos could not process more than 15 transactions per second at the time, competing with the payment companies mentioned above seemed bizarre. Despite this, the concept introduced in Yakovenko’s 2017 white paper could make this idea feasible.
This is known as proof of history consensus (PoH) and forms the basis of Solana’s functionality. The following section expands on PoH’s role in this popular blockchain-based project.
How Does Solana Work?
Solana runs on a unique hybrid consensus protocol combining proof of stake (PoS) and proof of history (PoH).
PoS refers to a mechanism for verifying transactions and adding new blocks to a network. It allows validators to lock cryptocurrency tokens as stakes as part of the exchange process for getting a chance to validate new transactions and earn rewards.
On the other hand, PoH is a new concept, introducing a cartographically safe time source into the Solana network to make it scalable. This mechanism allows every node to verify transactions by measuring the order and passage of time between events. Each validator (node) is assigned a specific amount of time and a slot in the network to find the next block. The nodes can then sequence messages between them, creating a transactional chain.
Each transaction has a timestamp since nodes verify transactions using the time component. This timestamp can serve as a compass for other nodes ordering the subsequent transactions within this block.
As a result, Solana is highly scalable and capable of performing up to 65,000 transactions per second. Solana achieves this without sharding solutions and at almost no cost since the price per transaction is $0.01.
Similarities and Differences Compared to Ethereum
Solana, like Ethereum, is a blockchain project with its own cryptocurrency, and it also provides a platform for building decentralized apps. In contrast, Solana is designed to solve some of the problems observed in the Ethereum network, such as congestion and low scalability.
Due to the network’s speed, you can purchase and sell the Solana token (SOL) easily and quickly. Additionally, you can trade SOL, hold it as an investment, or stake it.
Solana, like Ethereum, has no limit on its total token supply. Currently, there are over 511 million SOL coins in circulation, which is more than many other cryptocurrencies can boast.
SOL Token Explained
Similar to other cryptocurrencies, Solana has a native token — SOL. Aside from the possibility to sell, buy, trade, or invest, you can also use SOL to run smart contracts, pay transaction-related fees, and participate in the project’s governance. These functionalities make SOL a utility token, like DOT.
Currently, Solana is among the world’s top 10 cryptocurrencies. The token price was $0.04 at the time of the initial seed sale in 2018 but soared to $256.96 in November 2021. Solana’s value at the moment of writing this article is $37.83 (July 2022).
There are currently over 343 million SOLs in circulation, with a market cap of almost 13 billion. Plus, over 511 million SOL coins have been released so far.
Investing in Solana
As one of the newer projects, Solana’s token value grew by more than 10,000% in 2021. Solana is not only gaining mainstream attention, but it is also attracting institutional investors, thanks to its developed ecosystem, developer adoption, and expanding offerings (such as NFTs).
Since its founding in 2017, Solana has raised more than $25 million through public and private sales. Numerous crypto companies, including Multicoin Capital, Serum, CMCC Global, and others, became interested in Solana at this point.
Solana also attracts investors because it’s environment-friendly. Its network does not contribute to the carbon footprint and it saves energy. As opposed to Bitcoin, for example, Solana’s token doesn’t involve mining. To make Solana even more eco-friendly, the Solana team created a bridge that allows ETH assets to be transferred to Solana.
Despite these factors, Solana still has room for growth and expansion. Based on market capitalization, it is one-tenth the size of Ethereum, its main competitor. However, with over 1,000 new projects and high transaction speeds, Solana is expected to grow even more in the future.
Nevertheless, investors should be aware that investing in Solana or other cryptocurrencies may carry potential risks. Due to the crypto market volatility, Solana may show massive gains or huge losses. If you are considering investing in it, you should be aware of the risks and seek professional guidance if necessary.
Crypto Laws in New Mexico
Although the Land of Enchantment has had a love-hate relationship with cryptocurrencies and other digital assets over the years, the government is still more pro-crypto oriented and wants to regulate its status.
In 2015, the New Mexico Supreme Court ruled that cryptocurrencies are not subject to state money transmitter laws. Since then, the state began loosening its regulatory belt and businesses were free to operate without fear of being legally prosecuted.
In June 2022, the New Mexico House of Representatives approved a bill that would regulate cryptocurrency businesses. Although the bill has not yet become law, it demonstrates that lawmakers are taking an active role in regulating the crypto sector. Additionally, New Mexico has a vast and active crypto community.
Where Can I Buy Solana in New Mexico
You can buy Solana on many US-based crypto exchanges, including those in New Mexico. It is essential to know that these sites are mainly centralized and are called cryptocurrency exchanges.
In essence, crypto exchanges serve as marketplaces to exchange cryptocurrencies and fiat currencies and can be centralized and decentralized. Our focus will be on the former since they are licensed, safe, widely accessible, and accept fiat currencies.
Centralized Crypto Exchanges
Today, most cryptocurrency trading takes place on centralized exchanges. Crypto exchanges like Binance, Coinbase, Gemini, and Kraken are large exchange platforms that even people who are not crypto users may be familiar with.
These platforms are all centralized, meaning they are owned by specific organizations and have licenses from regional regulatory bodies. They are the safest places to buy cryptocurrencies, including Solana.
Although many exchanges are excellent, you still need to choose one. For that, you’ll need to consider the following factors:
- Availability of SOL — This is undoubtedly the most important factor. SOL/USD is offered on most major exchanges, and they cover a variety of other trading pairs. However, it is best to check first.
- Coverage in New Mexico — It’s a good idea to check if popular exchanges in the US cover New Mexico.
- Security — Security is another vital feature of a crypto exchange. As breaches are not as rare as some people think, find out what measures they use and how they handle them.
- User-friendliness — Consider a beginner-friendly crypto exchange if you’re new to the market. Nevertheless, the exchange interface still needs to be modern and easy to use.
- Reputation — A company’s reputation is extremely important, so be sure to read online reviews and user feedback. This way, you’ll get an accurate picture of the platform.
- Payment systems — Exchanges accept various payment methods, including credit and debit cards, bank transfers, and e-wallets. Ensure that the list includes the deposit and withdrawal methods you typically use.
- Fees — Crypto exchanges are free to use, but they make money by charging fees. Ensure that everything is disclosed in the pricing system, even the hidden fees, if any.
- Liquidity — Analysis of a platform’s liquidity is essential for understanding the trading volume of Solana. You will be able to trade faster if more SOL is traded.
Buying Directly
In case you don’t like trading via exchanges, you can always purchase SOLs directly from someone who wants to sell them. This type of crypto trading is very simple since all you need to do is give the person the money, and they need to transfer the crypto to your wallet.
However, this method is highly risky if you don’t know the person and aren’t sure you can trust them. Thus, it is advisable to make your trade publicly to avoid getting scammed. Alternatively, you might consider hiring a mediator to ensure both parties get what they want.
How to Buy SOL on an Exchange — Step-by-Step Process
Here are a few things you should know before buying Solana on an exchange in New Mexico. There’s nothing complicated about it, and the process is pretty much the same regardless of the exchange you’re using. This is how it works:
- Set up a wallet — To begin, you’ll need to choose a crypto wallet that supports Solana. The easiest way to find it is by visiting Solana’s official website and picking one of the supporting wallets. Once you have registered, you can start using it.
- Choose an exchange — You can choose one we recommend or one you have thoroughly researched.
- Register an account — Go to the exchange’s official website to create an account. The process is essentially the same as on most regular websites, though it requires more personal information. Afterward, make sure you verify your account so you can start using it.
- Make a deposit — Select a payment method and follow the instructions to deposit funds successfully. The sum you deposit should cover both the tokens and the trading margins and fees.
- Buy SOL— Now that you have the money, all you need to do is find the right trading pair (USD to SOL) and buy the desired quantity of tokens. Generally, you should receive the assets quickly, but the speed will depend on the network and exchange platform.
- Transfer SOL to your wallet — It’s best to leave your SOLs on the exchange if you plan to trade them in the future. When storing them long-term, it’s safer to transfer them to your wallet.
Bottom Line
Solana is one of the world’s largest cryptocurrencies. In addition to being a crypto token and enabling a decentralized app platform, it’s an intriguing project for investors, developers, and crypto enthusiasts alike.
New Mexico has many major crypto trading platforms that legally allow you to invest in Solana. You only need to choose one, create an account, make a deposit, and purchase SOL. The entire process lasts relatively shortly, but you need to decide whether or not this is the right investment for you.
