Solana and Proof of History

Robot with Solana logo on face fixing a gadget

Over the past year, there’s been a debate in the blockchain world about the best consensus mechanism. This debate was largely ignited by Ethereum’s decision to completely switch from a proof-of-sork (PoW) to proof-of-stake (PoS) consensus mechanism. Interestingly, one outcome of this debate is that a lot of people now assume PoW and PoS are the only consensus mechanisms that exist in blockchain technology. 

But they aren’t. There’s a third consensus mechanism, and that mechanism is part of what sustains the Solana blockchain. 

While proof of history (PoH) is only a part of Solana’s consensus architecture, it’s an important element that allows the chain to run faster than most blockchains. We’ll be exploring what Solana is, how it works, and how PoH allows it to confirm transactions faster than any other chain. 

What Is Solana?

Solana is a public blockchain platform that has smart contract functionality. SOL is the chain’s native currency. The idea for Solana was first proposed by Anatoly Yakovenko in late 2017. However, it took some time before Solana became an actual chain. 

In early 2018, Yakovenko took concrete steps to create the Solana blockchain. Yakovenko worked on creating the blockchain with Greg Fitzgerald, a colleague of his at Qualcomm Incorporated. It was Fitzgerald who encouraged Yakovenko to build the chain in Rust programming language. Fitzgerald was also the one who first demonstrated that Solana was super fast, and could in fact process over ten thousand transactions in around half a second.

In the beginning, the Solana team wanted to call the blockchain Loom because they planned to weave the world’s transactions on a single scalable blockchain. However, while they were still building the chain, Loom Network, an Ethereum-based project, sprang up and became popular. The Solana team decided to go with another name as a result. 

They eventually settled on Solana, which was a reference to a small beach town in San Diego called Solana beach. Yakovenko and Fitzgerald had surfed at the beach for three years while they worked together, so it held sentimental value for them. A short while later, the Solana GitHub organization was formally created. That same year, a public testnet was published. The testnet ran until the Solana GitHub organization was finally comfortable enough to publish the actual chain. 

The chain’s first block was minted in early 2020, which means that Solana was born just a few months before the 2020 bull market. Like Ethereum, Solana is run by a foundation. The foundation is called Solana foundation, and it’s based in Geneva. The work of building the blockchain, on the other hand, was done by Solana Labs, a company based in San Francisco.

What Is Proof of History?

Proof of history (PoH) is a consensus mechanism that uses the passage of time to reach an agreement on decentralized networks. PoH networks use historical events to calculate the passage of time, which makes it easier for the system to validate when transactions took place, and in what order they took place. This ease of consensus results in faster transaction time, and a more scalable network.

Before Anatoly Yakovenko got the idea of building Solana, he’d always wondered about the limitations of blockchains. He reasoned that they simply weren’t fast enough, as many of them couldn’t even complete a hundred transactions in one second. 

If blockchains were going to become a global network, they needed to have the scalability of global networks. Visa is one of the largest payment processors in the world, and it processes thousands of transactions every second. That was the sort of efficiency that blockchains were up against, and if they couldn’t beat that or perform close to it, they would fail. 

Yakovenko had worked with building distributed systems at Qualcomm, Mesosphere, and Dropbox, so he had a lot of experience with building synchronized networks. He also knew the role that the proper application of time played in making these networks super fast. So he decided to see if he could use the time to make blockchains faster too. 

That was what gave birth to PoH. 

The Time Conundrum

Time may seem like an ordinary measurement, but it’s really not. Even scientists are yet to understand whether time is relative or absolute. The theories of general relativity argue that time is relative, and those of quantum mechanics argue that it is absolute. 

When you’re building a decentralized system and plan to reach a consensus between hundreds of nodes at the same time, you need to figure out a way to let them coordinate time. Programmable blockchains solve this problem by relying on an outside program that distributes timestamps, which are then used to validate transactions in their proper order.

But this defeats the purpose of a decentralized system in the first place since the timestamps are assigned by a centralized source. Asides from that, the entire process ends up being a “code bureaucracy” that slows the entire program down. 

Yakovenko found a way to fix this problem by allowing these timestamps, which are assigned by outside programs, to be built on the chain. The next question one might ask is how this makes the system faster. 

If a particular node knows the exact time a transaction occurs, the transaction can be validated a lot quicker. An interesting analogy that Solana uses to describe the situation is the train blockchain. 

The Train Blockchain

Imagine you have an important letter to send on a train that leaves New York and arrives in Chicago in the evening. This train stops in Pittsburgh, Philadelphia, and Cleveland along the way. Since the letter is extremely important, you’d like to verify that it’s the right train that stops with the letter at every stop on its way to Chicago. 

Other chains solve this “verification” problem by calling and coordinating with one another to verify the train. An attendant in Pittsburgh would call New York to confirm if the train has left, and then call Philadelphia to confirm if it’s expecting a train. The one in Philadelphia would then call Pittsburgh and New York to confirm if the train has left, and then call Cleveland. 

However, Solana cuts this bureaucracy by including the time of every stop on the letter itself. While it doesn’t input the exact time, it inputs the name of the city where the train stopped at. Hence, the train station attendant at Cleveland only needs to look at the letter itself to know where the train has stopped, and in what order that stop was made. That makes the train get to its destination faster since attendants don’t have to coordinate with other stations to verify the train. The verification needed is already on the transaction itself. 

What this means is that on the Solana blockchain, an individual node can do the work of validating the entire chain. They can do this because the information, or code, needed for the validation is already on the transaction being made. That’s what Proof-of-History (PoH) is. 

But that’s not the only reason Solana can go through thousands of transactions in one second. Another reason is that since only one node can validate the entire chain, validations can be done in parallel as well. In practice, this means thousands of transactions can be validated at the same time, and the size of the chain only makes the process faster, not slower. This isn’t the case for other programmable blockchains. 

Solana’s Dual Systems

However, the PoH mechanism only solves the time and speed problem of consensus. It doesn’t solve the problem of choosing a validator and doesn’t punish mischievous validators. 

Solana utilizes a Proof-of-Stake (PoS) model for those functions. This means that Solana runs a hybrid consensus mechanism that makes use of Proof-of-History (PoH) and Proof-of-Stake (PoS) to validate transactions.

The Outages

Solana’s consensus mechanism paints a rosy picture of how the blockchain works. However, several outages have proven that the network is not quite stable yet. 

On September 14, 2021, the Solana network went offline after a surge of transactions caused the chain to fork. This means that different validators had different records of what transactions had been completed. Blockchains are generally not supposed to behave that way. The chain didn’t come online till the next day. 

However, the outages didn’t stop there. The blockchain went offline again on May 1, 2022, and was offline for roughly seven hours. It went offline again thirty days later for four hours. And on October 1, 2021, it went offline again for seven hours. 

While one can be impressed with Solana’s infrastructure and consensus mechanism, it’s clear that the chain has some work to do. 

On the Flipside

  • The outages that Solana has suffered have cast serious doubt on whether its consensus mechanism is truly scalable. 
  • SOL, Solana’s native currency, used to be part of the biggest coins by market capitalization. The blockchain’s recent outages have reduced its value, and SOL is now only the 16th largest coin by market capitalization.

Why You Should Care

If Solana manages to solve its outage issues, it could become the biggest blockchain in the world. It would be faster than all other chains, and it would retain the same level of blockchain safety. That would make it an almost perfect blockchain and would increase its value exponentially.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Victor Fabusola

Victor Fabusola is a Blockchain & Crypto Content Writer. He excels in crafting long-form educational guides, opinion pieces, and reviews in niches such as DeFi, NFTs, and Web 3.0. Outside of his work at DailyCoin, he loves conscious hip-hop and classical music and engaging in intellectually stimulating conversations with his friends.