Solana is a leading blockchain platform and a growing rival to Ethereum. While Solana claims to be the fastest blockchain in the world, the platform’s popularity and scalability have made its native token—SOL—one of the top 10 cryptocurrencies by market cap.
Compared with well-known cryptocurrencies like Bitcoin and Ethereum, Solana’s price is relatively low, trading at around INR 7,475 at the time of this writing, making it an attractive option for new investors. If you want to invest in Solana, here’s what you need to know to buy and sell SOL.
What Is Solana?
With a name inspired by an area of coastal California, the Solana project was begun in 2017 by Anatoly Yakovenko, who once led the development of operating systems at Qualcomm.
So how does Solana compare with other cryptos? Yakovenko found that Bitcoin and Ethereum had scalability issues. At the time, they couldn’t process more than 15 transactions per second (TPS).
The former Qualcomm engineer designed Solana, a Layer 1 protocol, to be a blockchain platform that could host decentralized, scalable applications at much faster rates and lower costs.
This crypto’s key innovation is its “proof of history” (POH). POH is not a consensus mechanism like proof of work or proof of stake. Instead, it’s a system that revolves around a “crypto clock.” Each Solana node maintains its own clock, encoding the passage of time into an SHA-256 encryption, a widely used hashing algorithm.
As of May 2022, Solana processed an average of 2,700 TPS. Its lightning-fast processing times make it appealing to developers, who hope its low fees will make it competitive against centralized payment processors in the future.
Today, Solana is used to support decentralized finance projects, including non-fungible tokens (NFTs), decentralized app developments (also known as dApps) and smart contracts. According to Yakovenko, more than 15 million NFTs are listed on Solana as of late June.
Solana token’s SOL is a native crypto token used for transactions on the blockchain, including micropayments. Users can also delegate and stake SOL for additional rewards. Currently, there is a supply of 342 million SOL with a total supply of 508 million.
Where Can I Buy Solana?
To buy the Solana token SOL, you need to open an account with a crypto exchange. Leading exchanges that allow users to buy and sell SOL with Indian fiat currency (INR) include:
With some cryptocurrency exchanges, you can buy and sell Solana paired with Tether (USDT), a stablecoin. If you’re relatively new to the cryptocurrency world, a stablecoin is a comparatively safe cryptocurrency with a more stable valuation.
Exchanges that pair SOL and INR include:
How to Buy Solana (SOL)
To buy SOL tokens, follow these three simple steps:
1. Choose a Crypto Exchange
Crypto exchanges are platforms that facilitate trades of cryptocurrency, serving as an intermediary between buyers and sellers. Some exchanges are simple, but others are more suited for experienced investors.
When comparing your options, look for a crypto exchange that offers low account minimums and low trade fees. To help you get started, we researched available options and selected the top cryptocurrency exchanges.
2. Buy SOL
Once you have an account, you need to fund it. You can fund your account with existing cryptocurrency holdings or you can fund it with your bank account or debit card.
Some cryptocurrency exchanges do allow you to buy cryptocurrencies with a credit card, but you should think twice before using that payment method; the credit card company will likely view the transaction as a cash advance, and you’ll have to pay cash advance fees and a higher annual percentage rate (APR). Plus, going into debt to invest—particularly in cryptocurrencies, can be volatile.
Once your account is funded, you can place your first order. Just type in Solana’s ticker symbol—SOL—and the amount you want to invest, such as INR 100 or INR 200. Typically, you can select an order type, such as a market or limit order.
3. Store Your SOL
When you invest in Solana or other cryptocurrencies, you must store your tokens using a crypto wallet.
There are several storage options available; which are best for you is based on your risk tolerance level and intended use for your cryptocurrency:
- Hardware Wallets. A hardware wallet is a physical device that resembles a flash drive. Unlike other storage options, hardware wallets are not connected to a network or the internet, so they’re considered “cold” storage and are generally more secure.
- Paper Wallets. As the name implies, a paper wallet secures your private keys on a piece of paper or with a printed QR code. If you decide to use a paper wallet, have a plan in place on where to store it; if you lose that paper, you won’t be able to regain access to your cryptocurrency.
- Software Wallets. You may prefer a software wallet if you want more convenient ways to access your cryptocurrency and buy and sell your holdings. With this option, you use a software program or downloadable app to store your crypto. The software is connected to the internet, so it’s less secure than hardware or paper wallets, but you can more easily use your cryptocurrency.
- Crypto Exchanges. Some crypto exchanges, such as CoinDCX, will store your crypto holdings. However, relying on an exchange to handle storage can be risky, and it’s usually only a good idea for small amounts and short periods.
What You Can Purchase With Solana
Solana has a maximum supply of 508 million tokens. If you purchase the Solana token, you can use SOL to pay transaction fees for running smart contracts or other transactions. It can also be used for staking, where you can stake your SOL tokens and earn rewards.
As with any cryptocurrency, investing in SOL can be risky. Only invest what you can afford, as your investment could lose its value.