What is Solana (SOL) cryptocurrency and how does it work?

History and Origins of Solana

Solana is a blockchain network launched in 2020 as a response to one of the biggest limitations of blockchain technology – scalability. Its founder, Anatoly Yakovenko, a former engineer at Qualcomm, envisioned a network capable of processing thousands of transactions per second without compromising security or decentralization.

Together with a team of experts from the tech and cryptography sectors, Yakovenko founded Solana Labs, the company that developed and launched the Solana blockchain. The project's core innovation was the introduction of a unique consensus mechanism called Proof of History (PoH) – a method that enables fast and accurate time-stamping of transactions without the need for traditional mining.

Thanks to this technology, Solana quickly gained attention from the crypto community and investors. Within just a few months, the project raised substantial funding through private and public rounds, and its native cryptocurrency, SOL, began to show significant growth.
Since then, Solana has evolved into one of the most active blockchain networks, hosting numerous decentralized applications, NFT projects, and DeFi platforms that continue to launch on its infrastructure daily.

Key Features of Solana

What sets Solana apart from other blockchain networks is its speed, low transaction fees, and innovative technology. Thanks to these advantages, Solana has become a popular choice for developing decentralized applications, NFTs, and DeFi projects.

Extremely High Speed

Solana is one of the fastest blockchain networks in the world. In theory, it can process over 65,000 transactions per second (TPS), while most other networks (like Ethereum) process significantly fewer. This allows for a smooth user experience even during high demand.

Proof of History (PoH)

Solana’s core innovation is the Proof of History mechanism – a system that uses cryptographic timestamps to optimize transaction processing. PoH allows validators to know the order of events in advance, reducing the need for lengthy verification processes and significantly speeding up the network.

Low Fees

Transactions on Solana are extremely affordable – the average fee is less than one cent. This is a major advantage compared to other networks, which often experience high costs, especially during periods of congestion.

Support for Smart Contracts and dApps

Solana supports the creation and deployment of decentralized applications (dApps) and smart contracts, enabling the development of a wide range of platforms – from NFT marketplaces to DeFi protocols and blockchain games.

Rapidly Growing Ecosystem

Hundreds of projects have already been built on Solana – including well-known NFT collections, decentralized exchanges, lending platforms, and developer tools. Its community continues to grow rapidly, and the project regularly receives support from investors and industry partners.

What Is SOL Used For?

SOL is the native cryptocurrency of the Solana network and plays several important roles within its ecosystem.

Paying Transaction Fees

Every activity on the Solana network—whether it's sending funds, executing a smart contract, or using a decentralized application—requires a small fee. These fees are paid in SOL tokens.

Staking and Securing the Network

Users can stake (lock) their SOL tokens to help secure the network. In return, they earn rewards in the form of additional SOL tokens. This process helps maintain decentralization and stability across the Solana blockchain.

Participation Within the Ecosystem

Many applications within the Solana ecosystem use SOL as a base currency. For example, users can spend SOL to buy NFTs, participate in decentralized finance (DeFi) activities, play blockchain-based games, or make payments within Solana-based apps.

Investment Purposes

Like other cryptocurrencies, SOL can also be used as an investment asset. Many users see long-term potential in Solana due to its technology, rapid development, and growing community, which is why SOL often becomes a part of crypto investment portfolios.

SOL Tokenomics

Tokenomics—meaning the structure of supply and distribution of SOL tokens—is a key aspect of understanding the Solana ecosystem.

Total Supply and Inflation

Unlike Bitcoin, Solana does not have a fixed maximum supply of tokens. Instead, it follows an inflationary model, meaning new SOL tokens are gradually introduced into circulation.

The initial annual inflation rate was approximately 8%, but it decreases by 15% each year until it reaches a long-term target rate of 1.5%. This mechanism is designed to keep the network sustainable while preventing excessive token supply growth over time.

SOL Token Distribution

When the project was launched, SOL tokens were distributed across several funding rounds and internal allocations. The main distribution breakdown includes:

• 16% – Private seed investors
  
• 13% – Public sale (ICO/launch)
  
• 12.5% – Team members and founders
  
• 12.5% – Solana Foundation
  
• 46% – Reserved for future ecosystem development

This distribution model supported the project's stable development but also sparked some discussion in the community due to the relatively large portion allocated to the team and foundation.

Usage and Token Burn

A portion of the transaction fees paid in SOL is automatically burned, meaning the tokens are permanently removed from circulation. This creates a deflationary effect, which partially offsets inflation and could help reduce total token supply over time.

How to Buy Solana (SOL)?

Buying SOL tokens on the Bitcoin Store platform is simple and fast. Here's how you can purchase Solana in just a few steps:

1. Create an account and verify your identity

To get started, you’ll need a wallet to store your cryptocurrencies. The next step is to complete identity verification, which is required to meet legal regulations and ensure the security of your account.

2. Deposit funds into your account

Before you can buy SOL tokens, you need to deposit funds into your Bitcoin Store account.

• Choose a payment method: You can deposit funds via bank transfer, credit or debit card, or in cash at one of our physical exchange offices.
  
• Make a deposit: Select your preferred payment method, enter the amount you wish to deposit, and follow the instructions. Your funds will soon appear in your Bitcoin Store account.

3. Buy SOL tokens

Once your funds are available in your Bitcoin Store Wallet, you’re ready to buy Solana.

• Go to the Prices section and search for SOL or Solana.
  
• Click on Buy SOL and enter the amount you wish to purchase – either in euros or in tokens. The platform will automatically convert the amount based on the current market price.
  
  Review the transaction details, then click Buy SOL for EUR to complete the purchase.

After the transaction is complete, your SOL tokens will appear in your Bitcoin Store Wallet, ready for use or long-term storage.

Solana (SOL) – Frequently Asked Questions (FAQ)

What was Solana’s all-time high (ATH)?

Solana reached its all-time high on January 19, 2025, hitting a price of $294.85, which was approximately €253.76 based on the exchange rate at that time.
Additionally, CoinGecko records a very similar peak of $293.31 on the same date.
Currently, SOL is trading at roughly 45–47% below that historical high.

Can Solana reach $1,000?

Reaching a price of $1,000 per SOL token is theoretically possible, but it depends on several factors. For that to happen, Solana would need to significantly increase its overall market capitalization, which means growing its user base, attracting more developers and investors, and driving global demand for its technology.

Factors that could support such growth include broader network adoption, continued technological innovation, favorable macroeconomic conditions, and deflationary mechanisms like token burning.

Although $1,000 may seem far off, the crypto market is known for its unpredictability. It’s important to note that such forecasts carry a high level of risk, and there is no guarantee that Solana will reach that value.

Is Solana still a good investment?

Solana is still considered one of the most promising blockchain projects, primarily due to its speed, low fees, and growing use across NFTs, DeFi, and decentralized applications. Some investors continue to see potential in the SOL token thanks to its technological edge, expanding ecosystem, strategic partnerships, and an active development community.

However, as with any cryptocurrency, it's important to be aware of potential risks—such as strong competition, security challenges, and price volatility.

Does Solana have a future?

Solana is increasingly seen as a project with long-term potential, mainly due to its strong technological foundation and ongoing development. Its innovative Proof of History mechanism enables fast and inexpensive transaction processing, making it especially well-suited for NFTs, DeFi apps, and blockchain gaming.

The project has a vibrant and growing community, with a rising number of applications, tools, and partnerships within its ecosystem. It also enjoys support from major investors and brands, particularly in the NFT space.

Unlike other blockchain networks that rely on additional layers to achieve scalability, Solana aims to keep all core functionalities within a single, unified network, making it simpler and more efficient for end users.

Where can I store my Solana (SOL)?

If you purchase Solana through the Bitcoin Store platform, you can securely store it directly in your Bitcoin Store Wallet. This option is ideal for users who value convenience, as everything is managed within the same platform—no need for additional apps or external devices.

Can Solana be used for payments?

Yes, Solana can be used for payments. Thanks to its key advantages—high transaction speed and low fees—more and more projects and merchants are considering it as a means of payment.

One practical way to use Solana for everyday purchases is through the Bitstore Card. This is a Visa debit card linked to your Bitcoin Store Wallet, allowing you to spend Solana (and other cryptocurrencies) in both physical and online stores, as well as withdraw cash from ATMs. With each transaction, SOL is automatically converted into euros based on the current market rate.