North Dakota may be known for its oil and agriculture industries, but it might soon add crypto to that list. State officials have invested a lot of money into various crypto projects and want to attract mining companies. Everything has worked seamlessly so far, which is excellent news for fans of Solana and other cryptocurrencies.
As for Solana, we’ll discuss it from its origin to the present. This article will also explain how and where to buy it and what to do with it investment-wise.
What Is Solana (SOL)?
Although it is a new player in the crypto world, Solana quickly became a prominent player. In addition to being a cryptocurrency, it also supports smart contracts and is an open-source blockchain. It is also used to develop numerous NFTs and a wide variety of DApps. Anatoly Yakovenko and Raj Gokal first created Solana in 2017, and the Geneva-based Solana Foundation officially launched it in 2020.
With Solana, you can expect fast transactions and scalability of your applications. Apart from its low cost and ultra-fast speed, Solana is also censorship-free. As a result, apps will always have internet access, and transactions won’t be interrupted. Thanks to the system’s scalability, transaction fees are under $0.01.
In addition to operating a superfast blockchain and crypto ecosystem, Solana also hosts a wide range of projects. The list includes Solana Pay, DeFi platforms, Web3, gaming, and NFT world.
Solana’s Distinctive Features
Proof-of-stake and proof-of-history form the basis of Solana’s hybrid consensus model. Furthermore, the platform incorporates a few innovations that enable it to work efficiently. Here are some of the distinctive characteristics of the Solana network:
- Proof-of-history — This is the foundation of Solana. With the proof-of-history protocol, Yakovenko introduced an alternative to traditional proof-of-stake and proof-of-work blockchain networks that require consensus from every new node. The PoH system means that new blocks do not need a consensus to be added to the blockchain. With this system, every event is recorded digitally and can be tracked down to the exact moment it happened. Thus, it serves as a cryptographic clock that assigns a timestamp and data structure to each event (transaction). According to Solana’s developers, this is the reason why the network can handle 65,000 transactions per second. Additionally, each validator keeps track of events using its own cryptographic clock, meaning they do not have to wait for other validators to verify transactions. As a result, the network becomes more efficient and transactions faster.
- Tower BTF — Tower Byzantine Fault Tolerance algorithm represents a safety shield for the Solana network. In addition to keeping the cryptographic clock running, it ensures that the network reaches an agreement on time. This algorithm also allows nodes to continue working even when they repeatedly fail.
- Turbine — Solana divides each blockchain node into smaller packets to increase transaction processing speed. This way, Solana validates smaller packets of information more quickly and handles bandwidth issues.
- Solana cluster — The cluster consists of validators that serve client transactions and maintain the integrity of the ledgers. Even though clusters are collections of independent computers, they can operate together as long as they share a common genesis block.
- Gulf stream — Gulf stream represents Solana’s mempool, a term derived from the words “memory” and “pool.” This is a crypto node mechanism where unprocessed transactions wait for verification. Validators process transactions in the mempool area, ensuring no unconfirmed transactions remain.
- Cloudbreak — The Cloudbreak memory mechanism keeps track of participant balances. In addition, it connects hardware and software.
- Sealevel — Sealevel allows Solana to run multiple contracts concurrently. Consequently, the blockchain network can save time and be more cost-effective.
- Pipelining — Solana’s ecosystem separates most tasks to ensure a fast transaction processing time. It assigns input data to various hardware components involved in the network. Through a process known as pipelining, multiple hardware devices can quickly validate information blocks.
SOL Token Explained
The SOL token is the native token of Solana, used to conduct all blockchain transactions.
Staking SOL tokens is one of its benefits, as it can generate passive income. Proof-of-stake is used to validate transactions and lets you stake your coins and earn rewards. For this to work, you need to pledge your SOL tokens to a validator that verifies cryptocurrency transactions. Afterward, the validator receives a portion of the block as a reward for sharing a piece with the staker.
Despite this, the staking process does not happen instantly, and you shouldn’t expect success overnight. Moreover, the price of Solana is highly volatile.
Solana in Numbers
Even though Solana is a newcomer to the crypto scene, it ranks among the top 10 cryptocurrencies. While Bitcoin is famous for having a limited total token supply, Solana has an unrestricted maximum supply and a circulating supply of over 345 billion coins. Plus, CoinMarketCap estimates its current market capitalization at over $14 billion.
When SOL launched in April 2020, its price was $0.88. The price remained the same for a while, but it started growing in January 2021. As with all cryptos, its price fluctuated but eventually skyrocketed to its all-time high of $258 on November 6, 2021. Currently, the SOL token’s worth is approximately $40 (as of July 2022).
Crypto Laws in North Dakota
The Peace Garden State has jumped on the bandwagon of pro-crypto-oriented states and has been trying its best to attract cryptocurrency mining organizations and, thus, diversify the state economy. For this reason, the state officials attended the 2022 Miami Bitcoin conference to promote North Dakota as the home of the “cleanest crypto on the planet.”
Additionally, the state has announced an investment of another $3 billion on projects with different investors, some of whom they met in Miami. Commerce Commissioner Jim Leiman said his department plans to double or triple this crypto mining investment.
The state also offers a range of benefits for companies interested in mining digital currencies sustainably. Following the Miami conference, the mining company Bitzero announced building its North American headquarters in North Dakota.
Where Can I Buy Solana in North Dakota?
Suppose you are interested in purchasing SOL tokens in North Dakota. In that case, you have two options — you can either buy them from a centralized crypto exchange or directly from another SOL owner. While we discuss both options in the text, we focus on the former because it is a faster and safer option.
Centralized Crypto Exchanges
A centralized crypto exchange is a platform for buying, selling, and trading cryptocurrencies. In these transactions, a middleman is responsible for managing assets and conducting trades between the two parties.
These exchanges are operated by companies, which makes them more secure and reliable. In addition to executing transactions, they also protect their users’ data. Furthermore, all users must undergo KYC procedures. The most popular exchanges are Binance, Kraken, Gemini, Coinbase, Coinmama, OkCoin, and eToro.
Decentralized crypto exchanges also exist. They don’t rely on anyone’s authority or involve third parties. In addition to facilitating peer-to-peer transactions anonymously, they don’t require personal information from you. They also don’t accept fiat currencies, such as the dollar.
North Dakota offers a wide selection of central exchanges or CEXs, but before choosing one, you should consider the following factors:
- Availability in North Dakota — Accessing an exchange’s website from your device does not necessarily mean it is available in your state. Look for a North Dakota-licensed platform and one that does not limit you in any way.
- Accepted cryptocurrencies — When choosing an exchange, check its selection of cryptocurrencies. The smaller tokens, such as Solana, may be harder to find than the larger ones. Therefore, you should be aware of what cryptos each exchange supports.
- Security and privacy — Check each exchange’s security protocols to ensure your financial and personal information remains secure. Read the privacy policy before registering on any website.
- Overall reputation — Before joining, check the exchange’s reputation. Countless factors contribute to the negative reputation among users, including inadequate security, poor customer service, and frequent hacker attacks.
- Fees — Centralized exchanges usually charge conversion and transaction fees. Since some may also charge withdrawal fees, it is imperative to check for hidden costs.
- Limits — Some platforms limit withdrawals, deposits, and trades daily or monthly. Before committing to any exchange, find out if such restrictions exist.
- Liquidity — Even though SOL is listed on an exchange, that does not mean enough tokens are available. It is crucial to ensure that there is enough trading volume to trade anytime you want.
- Ease of use — If you are new to the crypto market, it may seem challenging to use all of the options on a CEX. Therefore, you should learn how the platform works until it becomes convenient for regular use.
Buying Directly
In addition to buying SOL tokens from an exchange, you can buy them from another SOL holder. Unlike on an exchange, this process is simple since there is no verification procedure to complete. SOL holders must send you tokens in exchange for the funds they receive.
But this can be risky, especially if you see the person on the other end for the first time. Thus, it is better to stick to a CEX. The security measures on centralized exchanges are state-of-the-art, which you won’t get when buying from an individual. Additionally, each state has its own crypto regulations, including North Dakota, complicating matters further.
How to Buy SOL on an Exchange — Step-by-Step Process
Buying SOL on a crypto exchange is easy, even if you’ve never done it before. Here’s a step-by-step guide to walk you through the entire process:
- Get a wallet — You’ll need a wallet to store the SOL tokens after you buy them. You can choose one of the supported options on the official Solana website.
- Pick an exchange — Considering everything we’ve discussed, you can select an exchange from our list. You can also go for a different one, but we suggest researching it thoroughly beforehand.
- Register an account — Registering and submitting the required information and documents is standard procedure on every exchange. After you create an account, you’ll have to verify it.
- Deposit fiat funds — Select the desired payment method and follow the instructions. The amount you deposit should cover the cost of the tokens and any fees associated with their purchase.
- Purchase SOL — After your account is credited with funds, select the number of tokens you want to purchase.
- Withdraw SOL to your wallet — The coins will be transferred to your wallet in a few moments. However, the best way to ensure the protection of your funds is to transfer them to your wallet.
Bottom Line
In addition to providing the same kind of decentralized ecosystem, Solana was also created to compete with Ethereum. Its fast chains and low transaction fees make it one of the most efficient scaling solutions. As a result of these features, Solana is a rapidly growing network that attracts investors worldwide interested in developing DApps, NFT projects, and DeFi protocols.
