Do you know what the fundamental differences between Solana and Ethereum are? If you have a basic understanding of blockchain terminology and want to learn it, let’s look at these projects together, their history and more. We’ll also explore infrastructural differences, including types of consensus models, token standards, and smart contract design.
Well, for those who are new, we will try to explain everything in a not very complicated way.
And so, let’s start with the fact that according to Coinmarketrate.com ranking, these two crypto-projects are the leading ones. There are many different things to consider when comparing the two blockchains in the top 10. First, before diving into the technical aspects, it is worth considering the history and biography of each project’s development team. This indicates the strength of the project’s foundation.
A brief history of Ethereum
Vitalik Buterin originally proposed Ethereum in 2013, then a 19-year-old programming wizard and Bitcoin fanatic. Anticipating a new paradigm of decentralization, Buterin introduced the possibilities of smart contracts, transforming blockchain from a purely transactional A-to-B payment service into an open-source decentralized application development (dapps) landscape. Buterin was joined in this revolution by computer science experts Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin as additional co-founders.
The Ethereum Foundation (EF), part of a much larger community, is responsible for developing and managing the Ethereum network. However, it is not a centralized organization that controls or manages the network. The non-profit organization facilitates a number of initiatives that allow the global community of developers, artists, leaders, entrepreneurs, and ETH HODLers to contribute to the development and improvement of the ecosystem. This includes events such as the annual Ethereum Devcon. In addition, EF offers a scholarship program and an ecosystem support program to provide financial and technical support for the development of projects based on or using Ethereum technologies.
A Little History of Solana
In 2017, Anatoly Yakovenko, a computer science engineer and distributed systems expert, published a whitepaper introducing the concept of “proof of story” (PoH). With experience at Qualcomm, D2iQ (formerly Mesosphere), and Dropbox, Yakovenko knew that creating clock consensus for decentralized networks would solve the blockchain trilemma of increasing scalability without sacrificing decentralization and security.
A few months later, former Qualcomm colleague Greg Fitzgerald brought Yakovenko’s “whitepaper” to life by publishing a project on GitHub called “Silk. Moreover, Fitzgerald’s implementation of the project proved successful, verifying 10,000 transactions in just over 0.5 seconds. Shortly thereafter, another fellow from Qualcomm, Stephen Akridge, suggested increasing throughput by shifting signature verification to GPUs.
Taking suggestions from Fitzgerald and Akridge, Yakovenko hired the pair, and together they founded what became known as the Solana Foundation in March 2018. The project was originally called Loom. However, around the same time, the Ethereum layer-2 project was launched under the name “Loom Network,” which caused confusion in the crypto community. So the project was rebranded to “Solana” to signify that Yakovenko, Fitzgerald, and Akridge were surfing on their favorite beach when they worked together at Qualcomm.
From an end-user perspective, Solana and Ethereum are similar as public, open-source blockchains compatible with smart contracts. However, the Solana and Ethereum blockchain infrastructures offer a wide range of technological advances and developments. While both projects are broadly aimed at the same outcome, each does so differently. This includes the use of programming languages, consensus models and development tools.
Solana’s blockchain uses new infrastructure components that include eight key features. These include the world’s first Sealevel parallel smart contract execution environment. Unlike Ethereum Virtual Machine (EVM) or WebAssembly (WASM) virtual machines, which are single-threaded (running one contract at a time), Sealevel can process tens of thousands of contracts simultaneously.
In addition, Solana has a built-in “Pipeline,” a transaction processing unit that optimizes all of the hardware on the network for verification. In addition, the project implements “Gulfstream,” an alternative transaction forwarding protocol that eliminates the use of “mempools. The project uses a unique solution for scaling the horizontal account database called “Cloudbreak”.
Another innovative aspect of Solana is “Turbine,” a blockchain distribution protocol that helps solve the scalability problem of the blockchain trilemma. In addition, Solana uses “archivers” to distribute registry storage to light clients (without downloading all the ledger data) as part of the proof-of-concept and replication protocol. Finally, as a major source of inspiration for the project, advanced history proof protocols (PoH) and “Tower BFT” facilitate consensus mechanisms for the Solana network. We discuss them in detail in the next section.
Solana works with a network of validators that verify, manage and store transactional activity in the chain, and uses “clusters” of validators that work for specific purposes. Anyone can support network decentralization and censorship by using their own SOL asset. Moreover, there are no minimum requirements to bid or become a validator. However, there are some technical requirements to start a blockchain, as well as the cost of consensus participation. That said, the design of the network will incentivize validators by offering passive income opportunities.
The launch of the Ethereum network in 2015 used a blockchain infrastructure similar to the leading cryptocurrency Bitcoin. Using a consensus “proof-of-work” algorithm, the number one smart contract chain works with a globally distributed network of transaction validating nodes. However, because Ethereum’s primary goal is to promote decentralized development rather than create a peer-to-peer payments network, the transaction infrastructure is different from Bitcoin. For example, Bitcoin uses the UTXO (unspent transaction withdrawal) model, whereas Ethereum uses the accounting model. As a result, this allowed Ethereum to operate at an average transaction rate twice that of Bitcoin – about 15 transactions per second (TPS).
As Ethereum grew in enthusiasm, adoption, and development, so did network congestion and expensive gas rates. However, co-founder Vitalik Buterin has been working on scaling solutions since the initial launch in 2015, and Ethereum 2.0 promised to solve these problems. Originally planned for 2019, the first phase of Ethereum 2.0 was launched in December 2021. During this phase, the Beacon Chain was introduced, marking the beginning of the transition from Proof-of-Work (PoW) consensus to Proof-of-Stake (PoS) consensus. We will discuss them in detail in the next section.
Another element of Ethereum 2.0 is the different approaches to scaling solutions. Layer 2 protocols are a popular solution for scaling Ethereum. These include the use of sidechains, off-chain technologies and zero-knowledge technologies running on top of the main Ethereum chain.
However, most Layer 2 protocols are external enhancements to Ethereum by third-party projects and developers. Ethereum 2.0 updates include sharding and zero-knowledge technologies (e.g. zk rollups, zk-SNARKs) on the Ethereum mainchain. In turn, this will dramatically increase the throughput of the circuit to around 100,000 transactions per second (TPS).
Now it’s a little more complicated. Consensus models
A consensus model is an algorithm or mechanism that allows all nodes and validators in the network to agree that a transaction is valid before it is validated. As such, consensus models vary widely. Here we will look at the consensus models that both projects use as a benchmark when comparing Solana and Ethereum.
As we mentioned earlier, Ethereum is in the process of transitioning from PoW consensus to PoS consensus. But what are the differences, and why adjust the core blockchain protocol? There are several reasons. To fully understand the benefits, we will briefly explain how each consensus model works.
The Proof-of-work (PoW) consensus was introduced by Satoshi Nakamoto as a solution to the infamous “double-waste” problem in the scientific community. In short, it requires computers (nodes) to compete to solve an extremely complex equation that can mathematically prove the validity of a transaction. The equation is so complex that it requires a lot of processing power for the nodes to repeatedly guess the answer. Eventually, the first node to guess the answer correctly wins the transaction fee and places it on the block. The process is repeated until the blocks are full and cryptographically added to the blockchain. While PoW is incredibly secure, it consumes a huge amount of energy. In addition, at a significant initial cost, the network is easily monopolized by a few big players.
On the other hand, Proof-of-Stake (PoS) works at the expense of validators, each with a significant “bet” at risk (minimum 32 ETH), and randomly selected to “validate” transactions. Accordingly, validators are rewarded for confirming and offering new blocks. If validators engage in malicious activity, their share will be reduced.
Switching from PoW consensus to PoS consensus offers many benefits. First, overall energy efficiency increases by more than 99%. Thus, the current cost of the validator is reduced. However, the initial cost will continually rise in line with the cost of ETH.
In addition, validators do not need expensive mining equipment. Also, by providing stronger immunity to centralization, PoS contributes to more robust support for shard chain security.
Solana takes a completely different approach to network consensus. Company founder Anatoly Yakovenko has combined his more than 40 years of experience in distributed systems with the emerging blockchain industry. The result is Time to Consensus, Proof of History (PoH).
PoH is a revolutionary protocol that allows validators to have verifiable proof-of-order transactions down to the granular level. As a result, Solana transaction throughput is 10,000 times faster than other leading circuits.
At a fundamental level, proof-of-history (PoH) is a way to “cryptographically confirm the passage of time between two events. Each transaction or data fragment receives a unique timestamp representing state, index and data using cryptographically secure hashes. In this way, the order of events can be guaranteed and the timing of data creation can be accurately determined. Although PoH is critical to the consensus model, it is not the primary consensus protocol. Instead, Solana uses a practical Byzantine fault tolerance mechanism (PBFT) called Tower Consensus, intertwined with the PoS mechanism.
The combined efforts of PoS validators using the PoH protocol and optimizing consensus make Solana one of the fastest, safest and most decentralized blockchains in the world. The Tower Consensus protocol reduces latency by using the PoH protocol as a global time source.
Another aspect to consider when comparing Solana and Ethereum is smart contracts. Both projects are public, open-source blockchains and offer developers the ability to create decentralized applications (dApps). Dapps work as collections of programmed smart contracts.
Smart contracts are pieces of code that can automate a particular function. For example, if “x” happens, send “y” to the “z” account. Again, both projects take different approaches to smart contracts. This includes the use of programming languages, toolkits, and available token standards.
One of the best advantages of Solana is that you don’t need blockchain experience to create an app. Moreover, in the Solana ecosystem, smart contracts are called “programs. Therefore, developers can use familiar languages such as C and C++ (as well as the less common Rust programming language) to create and deploy dapps on the blockchain. Solana programs will then invariably run through the Solana Sealevel runtime protocol. Moreover, developers can use, combine and update existing Solana programs to create powerful, unique tools or applications.
Creating anything using blockchain can be akin to building with LEGO bricks. Open-source code can be used and improved by anyone. Solana offers developers a dapp creation experience similar to the Web2 web application design workflow, making it easy to work with various SDKs (software development kits). Accordingly, other programs on the Solana chain can also use the JSON RPC API.
Solana offers two main sets of programs: native programs and the Solana Program Library (SPL). Native programs are Solana’s most popular programs, offering fundamental functions for applications. Some of the native programs include System, Rate, and Voting. In addition, the Solana program library offers more token-oriented utilities that use the SPL token standard. For example, the “tokens” program allows developers to mint, request, burn or transfer tokens. Moreover, this includes both burnable (cryptocurrencies) and non-burnable tokens (NFT).
Ethereum co-founder and Chief Technology Officer (CTO), Dr. Gavin Wood, is making a significant impact on the adoption of smart contracts today. Because Ethereum was the pioneer of blockchain compatible smart contracts, Wood developed the brand new Solidity programming language. Solidity was the first complete Turing-based smart contract programming language for blockchain. Wood developed the “yellow paper” for the smart contracts execution protocol, the Ethereum Virtual Machine (EVM). This process is critical to the integrity and compatibility of an application on the Ethereum network, detecting any errors in the code.
Initially, the development and deployment of smart contracts and applications on Ethereum was limited to blockchain developers, who took the time to learn the new language. However, once the knowledge, use and usefulness of smart contracts became popular, there was a need for additional coding language compatibility. In recent years, many independent developers and projects have focused on making programming in Ethereum as easy as possible. Thus, creating and deploying tokens and applications on the world’s leading smartcontract chain has become so easy that anyone can do it.
Yes, we haven’t touched on native project tokens, as that needs to be the subject of a separate conversation.
Ethereum is currently the largest blockchain compatible with smart contracts. It hosts more decentralized applications (dapps) than any other blockchain ecosystem. However, while waiting for Ethereum 2.0 to be fully deployed, transaction costs can be prohibitive and waiting times can be long.
In contrast, Solana’s blockchain combines several new protocols, solving the trilemma of scalability, security and decentralization. Moreover, it confirms transactions at sub-second speeds at negligible cost.
However, it does not have the same broad community or level of acceptance as Ethereum.
We hope that this article will help you understand, and make your own, correct choice.