Solana

Secure

Bitcoin

Jito

<h4>This is the second part of this article. Here is the <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/how-solana-works-an-executive-overview-part-1/" target="_blank" rel="noopener">first part</a>.</h4> 
Let’s discover more about how Solana works: 
<h5>Proof of History (PoH)</h5> 
<a href="https://www.blockchain-council.org/blockchain/what-is-proof-of-history-and-how-does-it-work/" target="_blank" rel="noopener">Proof of History</a> (PoH) stands out as a breakthrough in the Solana blockchain. It acts as a cryptographic timekeeping device that establishes a confirmed sequence of events and time stamps without needing constant <a href="https://koinly.io/crypto-glossary/validator/" target="_blank" rel="noopener">validator</a> communication. 
Unlike the <a href="https://www.investopedia.com/terms/p/proof-work.asp" target="_blank" rel="noopener">PoW</a>, PoH complements Solana’s <a href="https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-proof-of-stake" target="_blank" rel="noopener">PoS</a> by enabling efficient transaction processing. 
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<h6 style="text-align: center;">Source: <a href="https://report.helius.dev/" target="_blank" rel="noopener">Helius</a></h6> 
<h5>Key Features of PoH</h5> 
<ul> 
 <li>Deterministic Hashing:&nbsp; The <a href="https://www.n-able.com/blog/sha-256-encryption" target="_blank" rel="noopener">SHA256 algorithm</a> underlies PoH, ensuring that the same input produces the same hash, with outputs always being 256 bits. This feature makes sure people can rebuild the chain of events.</li> 
 <li>Sequential Computation:&nbsp; Validators keep a running string of SHA256 hashes going, with each hash taking the previous one’s output as its input. This sequence builds a checkable “mini proof of work,” backing up the flow of time and the order of transactions.</li> 
 <li>Efficient Verification:&nbsp; Creating these hashes needs step-by-step computing. Other validators can also check if a given set of hashes is right all at once, making the system both safe and productive.</li> 
 <li>Trusted Timestamps:&nbsp; Using <a href="https://www.criipto.com/blog/trusted-timestamping" target="_blank" rel="noopener">trusted timestamps</a> in messages also prevents validators from making blocks and sticking to the leader’s schedule.</li> 
</ul> 
During a leader’s slot, the PoH service integrates processed entries from transactions with the current PoH hash, creating a cryptographic record of the transactions. This record not only timestamps the transactions but also establishes their sequence. The leader selected via the proof-of-stake system has a vital part to play in this process. They make sure they add new entries. 
<h5>Accounts Model</h5> 
In Solana, they maintain the global state in a specialized database called <a href="https://docs.solanalabs.com/proposals/accounts-db-replication" target="_blank" rel="noopener">AccountsDB</a>. This system keeps all accounts in a key-value structure. The account address serves as the key, while the account data acts as the value. 
The idea that ‘Everything on Solana is an account!’ shapes its design. This means tokens, smart contracts, and other elements exist as accounts. This setup creates a solid and adaptable framework, allowing different apps to run on the platform. 
<img decoding="async" class="wp-image-147672 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxcvdsdfdfssdf-300x158.jpg" alt="" width="620" height="327" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxcvdsdfdfssdf-300x158.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxcvdsdfdfssdf.jpg 683w" sizes="(max-width: 620px) 100vw, 620px"> 
<h6 style="text-align: center;">Source: <a href="https://report.helius.dev/" target="_blank" rel="noopener">Helius</a></h6> 
<h5>Types of Accounts</h5> 
<ul> 
 <li>User Accounts: These are basic accounts that private keys control. People often use them to hold SOL tokens.</li> 
 <li>Data Accounts: This stores state information such as token balances or other app-specific data.</li> 
 <li>Program Accounts:&nbsp; It stores executable bytecode that allows users to run smart contracts. Solana segregates the runnable code from the state, which improves performance and security.</li> 
</ul> 
<img decoding="async" class="wp-image-147673 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvxfdgfgdfg-300x158.png" alt="" width="569" height="300" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvxfdgfgdfg-300x158.png 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvxfdgfgdfg-696x366.png 696w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvxfdgfgdfg.png 714w" sizes="(max-width: 569px) 100vw, 569px"> 
<h6>Native Program Accounts</h6> 
These are programs already set up on the network. They perform the Vote Program and the BPF Loader. 
A Solana account holds information like the owner’s public key, the amount in lamports, and relevant data. 
<h5>Rent and Account Storage</h5> 
Solana uses a rent mechanism to manage state bloat. To keep an account running, users need to maintain a particular balance, called the “<a href="https://docs.solanalabs.com/implemented-proposals/rent" target="_blank" rel="noopener">rent-exempt</a>” amount. 
When an account is no longer in use, you can shut it down and take your rent-exempt SOL back. 
<img decoding="async" class="wp-image-147674 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/csscdsdvdsssdv-300x159.jpg" alt="" width="540" height="286" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/csscdsdvdsssdv-300x159.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/csscdsdvdsssdv.jpg 669w" sizes="(max-width: 540px) 100vw, 540px"> 
<h6>Turbine</h6> 
Solana disseminates transaction data across the network using <a href="https://docs.solanalabs.com/consensus/turbine-block-propagation">Turbine</a>. It divides the transaction data into small lots known as “shreds”. 
Afterwards, it employs a tree-like structure to distribute these data to all validators. 
<h5>Shredding and Data Propagation</h5> 
<ul> 
 <li>Shredding: First, transactions are into shreds and then sent to validators within the system. Every tiny piece contains a part of the transaction data, so they encode it with <a href="https://www.techtarget.com/searchmobilecomputing/definition/forward-error-correction" target="_blank" rel="noopener">Forward Error Correction</a> (FEC).</li> 
</ul> 
This classification handles the integrity of the data; even if the system loses or corrupts some shreds, this data is still saved. 
<img decoding="async" class="wp-image-147675 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/cvxfdgfggfhy-300x186.jpg" alt="" width="556" height="345" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/cvxfdgfggfhy-300x186.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/cvxfdgfggfhy-356x220.jpg 356w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/cvxfdgfggfhy.jpg 612w" sizes="(max-width: 556px) 100vw, 556px"> 
<ul> 
 <li>Secure Transactions with Merkle Trees: The leader signs the <a href="https://spl.solana.com/account-compression/concepts" target="_blank" rel="noopener">root</a> of each merkerized batch of shreds. That is the root, and guardians submit shreds associated with the Merkle root to confirm that the data is genuine.</li> 
 <li>Tree Structure: The system structures the validators in a tabular manner under the “<a href="https://www.helius.dev/blog/turbine-block-propagation-on-solana" target="_blank" rel="noopener">Turbine Tree</a>,” which means the data transfer is more efficient and reduces the load on any single node.</li> 
 <li>Consensus: Solana reaches a consensus by combining PoH and <a href="https://docs.solanalabs.com/implemented-proposals/tower-bft" target="_blank" rel="noopener">Tower BFT</a> (TBFT), a tweaked version of <a href="https://www.c-sharpcorner.com/article/what-is-byzantine-fault-tolerance/" target="_blank" rel="noopener">Practical Byzantine Fault Tolerance</a> (PBFT). This approach engages the compulsory sort PoH in the consensus process to make it more lucid.</li> 
</ul> 
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<h5>Voting and Forks</h5> 
<ul> 
 <li>Voting: Validators can vote on whether blocks are valid, and these votes are the basis for the transactions in the chain. Validators get the highest score among a cluster; the rewards will be the correct and timely processing of the processes.</li> 
 <li>Handling Forks: Solana enables different blocks to exist from a single parent block, which results in <a href="https://www.geeksforgeeks.org/blockchain-forks/" target="_blank" rel="noopener">forks</a>. Validators vote for such forks, and the chain selects the fork with the highest votes.</li> 
</ul> 
<img decoding="async" class="wp-image-147678 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvcbbnvbnmfgdf-300x172.jpg" alt="" width="623" height="357" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvcbbnvbnmfgdf-300x172.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/08/vcxvcbbnvbnmfgdf.jpg 659w" sizes="(max-width: 623px) 100vw, 623px"> 
<h5>Finalization and Confirmation</h5> 
A transaction will advance from ‘processed’ to ‘confirmed’ to ‘finalized’ as more validators vote on its relevance. This multi-stage process, along with Solana’s security features, assures the audience of security. 
<h6>Gossip and Archive</h6> 
The gossip network serves as the communication backbone for Solana. It distributes metadata and status updates among validators and other network participants. It uses a modified PlumTree algorithm for efficient information propagation. 
<h5>Archive Nodes</h5> 
Solana stood out as a project that only needed nodes to digest the whole history to work with it. Instead, “archive” nodes keep an entire record and give access to historical data. This method reduces the storage responsibility of the validators and improves network efficiency. 
<h5>Economics and Jito</h5> 
Solana’s monetary policy involves using an inflationary peg to incentivize validators. The starting inflation rate was set at 8%, which they brought down to 1.5% annually. Because of Jito’s incentivization, validators can increase their staking rewards. <a href="https://x.com/jito_sol?s=21" target="_blank" rel="noopener">Jito</a> is the alternative client outside SOL’s protocol that conducts the auctions of off-chain block space. Here, the highest bidder receives the desired block. 
<h5>Liquid Staking</h5> 
<a href="https://chain.link/education-hub/liquid-staking" target="_blank" rel="noopener">Liquid staking</a> enables you to stake your tokens and get benefits while holding liquidity through <a href="https://www.bitcoin.com/get-started/what-is-a-liquid-staking-token/" target="_blank" rel="noopener">LSTs</a>. When the user stakes $SOL, they can trade or use the tokens in applications. 
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<h5>Conclusion</h5> 
Solana’s design allows it to process an enormous amount of data with minimal time lag. Its capabilities are the pillars indicative of its potential as a ground for apps. 
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<h6>Disclaimer</h6> 
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd. 
The post <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/how-solana-works-an-executive-overview-part-2/">How Solana Works: An Executive Overview – Part 2</a> appeared first on <a href="https://www.altcoinbuzz.io">Altcoin Buzz</a>.

How Solana Works: An Executive Overview – Part 2

Altcoin Buzz

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