How to Buy Solana (SOL)

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Contributor, Benzinga
Updated: August 11, 2022
verified by Logan Ross

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Decentralized finance (DeFi) is a hot topic in the cryptocurrency industry. Most DeFi infrastructure is built on Ethereum, the largest and most robust blockchain network that supports smart contracts. Smart contracts are the code that powers DeFi, allowing for exchanges, financial derivatives and even insurance to be processed directly on a decentralized network.

With an influx of demand for Ethereum’s network, transaction costs have skyrocketed. This makes it hard for retail investors to use DeFi on Ethereum, as transactions on Ethereum can cost over $100 at peak times. However, Solana aims to solve the scalability issues that Ethereum's network is currently facing.

Like Ethereum, Solana uses smart contracts to host decentralized applications (dApps). However, Solana’s unique parameters allow for significantly cheaper transaction costs while simultaneously increasing the speed of the network. Find out how to buy Solana in 3 easy steps.

What is Solana?

Solana is a smart contract enabled cryptocurrency that uses a proof-of-stake and proof-of-history consensus to secure its blockchain. Ethereum is currently proof-of-work, which is a big contributor to the high gas costs on its network. To understand the differences between Ethereum and Solana, you should become familiar with these different consensus models. 

Proof-of-work uses computational power to secure blockchain transactions. Bitcoin, Litecoin and Dogecoin use proof-of-work, and Ethereum is currently in the process of upgrading its blockchain from proof-of-work to proof-of-stake.

Proof-of-stake uses validators with a financial stake in the cryptocurrency to verify blockchain transactions. In many cases, anyone can become a validator so long as they have enough cryptocurrency to stake on the blockchain. This staked crypto is used to keep validators in check. If they try to enter fraudulent transactions, their staked crypto assets will be seized as punishment.

Proof-of-history works by adding what is essentially a time record on the blockchain. This way, transactions can be verifiable based on when they’re sent using a verifiable delay function. Unlike proof-of-work and proof-of-stake, there is a clear sequence of transactions based on the time the transaction is sent. 

Nonetheless, to differentiate itself, Solana introduces a combination of architectural design choices that attempts to offer quicker transaction settlement times and an infrastructure that allows developers to launch and write customizable applications in multiple programming languages. Solana is one of the several competing layer 1 blockchain projects such as Cardano, Ethereum, Avalanche (AVAX) and Binance Smart Chain that hopes to develop an ecosystem of cryptocurrency-powered products and services.

Brief History of Solana

While the cryptocurrency token Solana (SOL) just launched in 2020, the Solana Foundation has been busy at work since 2017. Anatoly Yakovenko and Greg Fitzgerald left Qualcomm in 2017 to start the Solana Foundation. Sam Bankman-Fried, centi-billionaire and CEO of FTX Exchange, is a vocal Solana supporter. He reportedly bought his position in Solana around $3, and has sense held his investment through this most current run up in price. At its peak, Solana traded for over $250 and is since down significantly from its all-time highs.

The token began trading in April 2020 for about $0.75. Throughout the year, Solana roughly doubled in price. It wasn’t until 2021 when Solana gained mainstream attention, quickly rising to the 10th largest cryptocurrency by market capitalization. At the time of writing, Solana is among the top 10 most valuable cryptocurrencies by market cap at over a $14 billion valuation.

What's Better For NFTs, Solana or Ethereum?

While some pretentious NFT collectors with multi-million dollar NFT collections dismiss Solana's blockchain for NFTs, it's not so clear whether Ethereum is better than Solana for non-fungible tokens. Of course, high-end NFT collectors value the security and decentralization of Ethereum's blockchain and are willing to put up with high transaction fees. Also, NFT investors value a chain's history, and Ethereum has the most on-chain history, being the oldest smart contract blockchain.

However, many NFTs are priced out of using Ethereum's blockchain. Since NFTs cost around $150 to mint, the token must be worth more than this amount for it to make economic sense to create a non-fungible token. Since Solana has far lower transaction costs, it's ideal for less expensive NFTs. And, thanks to the speedy transactions on Solana, the blockchain may be setting itself up perfectly for video game NFTs.

How to Buy Solana

  • How to Buy Solana (SOL)
    securely through How to Buy Solana (SOL)'s website

  1. Open an online account.

    Many popular crypto trading platforms have recently added support for Solana. Right now, some of your best options include Uphold, KuCoin, Crypto.com, and Voyager.

    To open an account, you’ll need to enter an email address and create a password. More likely than not, you’ll also need to provide personal identification information to the website for tax purposes. Once your identity has been verified, you’re ready to begin investing.

  2. Buy a wallet (optional).

    Before you invest in any cryptocurrency, you should consider where you’ll store your assets. It’s not recommended for you to store your crypto on an exchange, as exchanges are large targets for cryptocurrency hackers. Many exchanges have been hacked in the past, so the only reason you should keep your crypto on an exchange is if you’re trading in the short term.

    Instead, you should store your cryptocurrency in a hardware or software crypto wallet. Software wallets are free to use applications that allow you to securely store your crypto on a PC or mobile device. Hardware wallets are the most secure way to store cryptocurrency, as they store your assets offline on a physical device.

  3. Make your purchase.

    You can buy Solana on using USDT or Bitcoin. Tether (USDT) is a stablecoin pegged to $1, so it simulates investing with fiat currency. Some cryptocurrency investors like to trade against Bitcoin, as this provides a metric for how well an investment does in terms of Bitcoin.

    You can place your buy order as a market order or a limit order. Market orders will fill your transaction instantly at market price, whereas limit orders are filled if the cryptocurrency reaches a specific price that you specify. If the crypto never falls to that price, however, your order won’t be filled.

Best Crypto Exchange for Solana

Solana is available to U.S customers on a few notable exchanges, including Uphold and Coinbase.

Another great option is SoFi, an application built for modern-day investors. Users are able to buy and sell securities, cryptocurrencies and other assets through SoFi's brokerage, and making an account is a quick and easy process. Plus, new users can get free bitcoin for signing up for an account with SoFi!

  • SoFi Active Invest (Brokerage)
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    IPO Investing
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  • Uphold Crypto
    Best For
    A Fast Trading Experience
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    securely through Uphold Crypto's website
  • Voyager
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    Mobile Traders
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    *Other fees may apply.

Best Crypto Wallets for Solana

Best Hardware Wallet: Ellipal Titan

In just about every way, the Ellipal Titan is the best hardware wallet on the market. The wallet has 2 storage solutions: a hot wallet (the mobile app) and a cold wallet (the physical device). These wallets are interoperable, allowing you to easily manage your crypto portfolio directly from the hot wallet.

The Ellipal Titan has a sleek design with a large full-color touchscreen. This way, you can track your portfolio right on your hardware wallet. Also, the wallet doesn't use cables or bluetooth to connect to the hot wallet. Instead, the wallet uses QR codes, which is the safest way to transfer crypto (since you need to physically scan the code to have access to your funds).

While the Ellipal is typically more expensive than its competitors, the company is currently offering $30 off as a special promotion. After the discount, the Ellipal Titan is a great deal, especially considering all the premium features.

  • Ellipal
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Most Versatile Wallet: Exodus

  • Exodus Wallet
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    Staking Crypto + Earning Rewards
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Exodus provides you with the versatility you need when you plan to buy Solana and manage your crypto investments. the platform offers:

  • Desktop wallet
  • Mobile wallet
  • Trezor hardware wallet
  • Exodus’ suite of crypto apps

Now that you have your Solana holdings in this wallet, you can make several moves that will help you save money and plan for the future. You can live chat with the customer service team at Exodus if you have more questions, or you can sit back and allow your Solana holdings to live comfortably in your new wallet. You can read Benzinga’s review of the Exodus wallet here.

Trade, Sell or Convert your Solana

If you plan on actively trading Solana, you’ll need to leave your funds on Binance to do so. If you’re buying Solana to hold, then you’ll need to transfer your tokens to and from your crypto wallet when you want to make transactions. 

It’s a good idea to average your buy-in price as well as your sell price. Since crypto investments are so volatile, averaging your buy-in helps reduce some of the risk associated with volatility.

Current Crypto Prices

The first half of 2022 has been bearish for most cryptocurrencies, while NFTs have continued to take attention away from DeFi tokens and other digital assets. That being said, many investors with a long-term outlook are still bullish on the asset class, and with many tokens down significantly from their all-time highs it may be a good time to enter at a discount.

Is Solana a Good Investment?

If Solana can truly compete with Ethereum, then it may be a solid investment for 2022. Ethereum still has the most infrastructure on its blockchain, including decentralized exchanges (DEXes), nonfungible tokens (NFTs) and automated lending protocols. If Solana isn’t able to build out its infrastructure before Ethereum migrates to proof-of-stake, then it’s not likely that Solana will be able to compete with Ethereum’s network, given the extent that network effects have in the crypto industry.

Frequently Asked Questions

Q
Who is the founder of Solana?
A

Anatoly Yakovenko is the founder of Solana.

Q
What makes Solana special?
A

The Solana blockchain provides fast, secure, and scalable transactions.

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