Today, we’ll take a look at the story of a cryptocurrency that, according to Forbes, is the sixth most valuable cryptocurrency in the world. How is Solana different from traditional cryptocurrencies? And why did it have such an extremely difficult journey that knocked it out of the mainstream for several years? You can find out more in the next article in our series on cryptocurrencies.
Article contents – Solana:
- How it all began – The beginnings of a cryptocurrency called Solana
- Proof of History – A revolutionary way to validate cryptocurrencies
- Peak and turning point – Why are conservative investors afraid of Solana as a cryptocurrency?
- The fall to the bottom – How the failure of a crypto exchange nearly destroyed Solana
- Solana's advantage is its technical side and transaction speed
- Is Solana the cryptocurrency for you?
How it all began – The beginnings of a cryptocurrency called Solana
The story of Solana begins sometime around 2017. At that time, a Ukrainian named Anatoly Yakovenko was pondering why cryptocurrencies were so slow. He worked at Qualcomm, so he knew a thing or two about network technologies — and he was quite annoyed that Bitcoin could handle a few transactions per second and Ethereum barely thirty. When he compared this to traditional payment systems such as Visa or Mastercard, which can handle thousands of transactions per second, he thought to himself: *”This isn’t normal.”* And then it dawned on him — the problem wasn’t the hardware, but time. Each node in the network perceives time slightly differently, and when they disagree on when something happened, everything freezes. And if you’re thinking about investing in blockchain, you know that speed and scalability are key. At the time, Solana promised exactly what the market desperately needed — a network that would *finally* not slow down its own technology.
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Proof of History – A revolutionary way to validate cryptocurrencies
Yakovenko then came up with an idea that sounded crazy but worked: to create a common “time for everyone.” He called it Proof of History. In 2018, he went full steam ahead and founded Solana Labs, named after a California beach where he often surfed. Raj Gokal and Greg Fitzgerald joined him, and together they began writing a completely new blockchain. This was not a clone of Bitcoin or Ethereum—they wanted a system that would be built from the ground up for speed and efficiency. When you look at it as an investor, you see a typical “high risk, high reward” moment—a small team, but with an idea that could change the rules of the game.
In 2020, they launched the first version of the network, which they called mainnet-beta. From that moment on, it was possible to send and receive their cryptocurrency SOL. The network worked surprisingly well and became the talk of the town – lightning speed, almost zero fees. But you know how it is: when something starts getting talked about a lot, the hype grows faster than reality. And even here, it was difficult to tell where technological progress ended and FOMO began.
Peak and turning point – Why are conservative investors afraid of Solana as a cryptocurrency?
The year 2021 was a huge turning point for Solana. That’s when the crazy wave of NFTs took off – digital images, collectible tokens, just hype everywhere you looked. Ethereum, where it all started, was overloaded, with fees reaching tens of dollars. People were looking for something faster and cheaper. Solana was just what they needed—transactions took a fraction of a second, cost pennies, and projects like Serum, Magic Eden, and Raydium were popping up like mushrooms after rain. The price of SOL went from a few dollars to around $250. The media talked about the “Ethereum killer.” But you know that when everyone is shouting “new king!”, it’s good to keep your feet on the ground.
But just as it was taking off, disaster struck – in September 2021, Solana came to a complete standstill. The network froze, and validators had to restart everything manually. And that, you have to admit, is a real mess for a “decentralized blockchain.” It looked like a central server with manual operation. And it wasn’t the last time. In 2022, there were more outages – sometimes caused by bots, sometimes by bugs in the code. As an investor, you have to read between the lines: every such outage means a loss of trust and, therefore, value.
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The fall to the bottom – How the failure of a crypto exchange nearly destroyed Solana
And then came 2022 and the fall of FTX. The exchange, owned by Sam Bankman-Fried, went under – and with it Solana, because FTX was one of its main investors. Cema SOL fell by more than 90%. On top of that, there was a lawsuit in the US because the token could be considered an unregistered security. For a moment, it looked like it was the end. But Solana didn’t give up. The community rallied, cut ties with FTX, and started building again.
Since then, things have been slowly picking up. New software versions, a more stable network, new projects, even a Solana-enabled mobile phone – the Saga Phone. By 2025, Solana has a reputation as one of the fastest blockchains in the world. But you know that the past is not forgotten – technical failures, questions about decentralization, and legal uncertainties still hang in the air.
Solana’s advantage is its technical side and transaction speed
Solana runs on a combination of Proof of Stake and Proof of History. Proof of Stake means that the network is validated by people who have staked their SOL tokens in it. Proof of History, however, gives it its characteristic edge – instead of arguing about the order of transactions, each one has an exact timestamp. This allows the network to theoretically handle up to 65,000 transactions per second. From an investor’s perspective, it looks like a dream – speed, low fees, no energy consumption. But as you know, even the fastest engine can burn out if it lacks stability.
Is Solana the cryptocurrency for you?
Validators need powerful machines, which can lead to centralization. Outages occur from time to time, and legal uncertainty persists. And this is where the key question for you comes in: do you want to bet on speed or resilience? Solana is like a sports car – incredibly fast, beautiful, but sometimes it ends up in the repair shop. If it can withstand the pressure and manage to be not only lightning fast but also reliable, it could become the new standard for applications that require extreme performance, such as games, micropayments, or systems connected to artificial intelligence.
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