The Solana blockchain has been considered a major rival to the Ethereum blockchain, given its more advanced features of extremely high transaction speed and high scalability unlike the Ethereum blockchain.
For this reason, the value of solana blockchain’s native token SOL has risen tremendously in late 2021.
When Paypal surfaced in the finance industry, it garnered massive adoption and was considered a huge innovation which facilitated global instant payments between customers and businesses using the internet.
However, in recent times, Solana Pay has proved to be the next biggest innovation in the payment processing setting of the financial industry, as it includes non-fungible tokens (NFTs) and web 3 into its network.
In this article, we will analyze everything you need to know about Solana Pay and how it works.
What Is Solana?
Solana was developed by software engineer Anatoly Yakovenco in 2017.
He discovered the loophole in other blockchain networks which made them inefficient, though they pose to be efficient or at least gravitating towards efficiency.
Anatoly was inspired to create Solana after he noticed that most blockchains didn’t consider time as a factor in the blockchain performance, rather they all rely on a standardized clock which runs on the local time of the relevant node.
This is a problem because, without a standardized clock, it means the timestamp for each block will vary and nodes must validate the time of confirmation as a factor, hence the more factors the nodes will validate, the slower the time.
However, on the Solana blockchain, this factor conformation problem is eliminated by running all nodes on the same clock to speed up the network.
This is called the proof-of-history consensus method, a modified version of proof-of-stake which considers time as a factor for verification purposes.
SOL is the native token of the Solana platform the major roles Solana played on the NFTs and DeFi space caused a price explosion of the SOL token in the second half of 2021.
Interestingly, Solana was listed as one of the top 10 cryptocurrencies by market cap, overtaking major cryptocurrencies like XRP and Cardano.
A brief History Of Solana Pay
Solana labs, though being the foundation company behind the idea of Solana pay, is not the only company involved in the ingenious innovation.
According to Shere, Circle, Checkout.com, Citcoin, Phantom, FTX and Slope were all integral parts of Solana Pay’s success story.
“73% of all companies see the range of digital payment methods as a fundamental growth factor for 2022.”
Team Circle revealed from their intensive studies the need for a new digital payment method
The same studies reveal that most of those businesses are already using or plan to use only digital payments within the next two years.
These strong demands propagated the development of a Solana blockchain-based payment system in 2021. It’s obvious Solana and its partners are bent on taking decentralized payment processes to a great height.
How Does Solana Pay Work?
According to Solana, the Solana network is a speedy network which supports up to 65,000 transactions per second.
Solana Pay is a digital payment platform which has leveraged the power of the Solana blockchain, offering customers and businesses speedy, instant, zero-fee transactions which do not have any effect on the environment.
DApps developers building on Solana and digital payment platforms with Solana wallet can integrate Solana Pay for simple and easier transactions.
Due to the accessibility of Solana Pay, many are comparing Solana Pay to Paypal with the argument that Solana can introduce the exact innovation to crypto payments as Paypal did to traditional online payments.
Advantages Of Solana
There are many reasons why Solana may be better than other blockchain networks you may have known in the past, especially Bitcoin and Ethereum blockchains.
Bitcoin and Ethereum networks indeed claim to offer an almost instant crypto payment but they are quite costly and not as instant as they claim to be.
This problem of high transaction cost is particular to the Ethereum network which completes an average of thirteen transactions per second while Bitcoin completes an average of seven transactions per second.
However, Solana completes an average of 65,000 transactions per second making it the fastest and as well, cheapest. This makes Solana Pay attractive to businesses and customers.
Payments on Solana Pay do not involve third parties like banks due to their decentralized nature. Users can pay in real-time in SOL or any other Solana-supported token.
Also, all detailed reports about every transaction such as currency type, wallet destination and transaction amount are kept private from the rest of the network, ensuring that both parties can transact confidentially.
Disadvantages Of Solana Pay
Solana may be the fastest and cheapest network amongst Ethereum and Bitcoin but how secure could it be?
Remember that the Solana network just emerged in 2021 to tackle the scalability and high transaction fee problem that most people face on the Ethereum network, but Solana and Solana Pay itself are still in their infant stage of development.
Businesses or individuals who bank on Solana Pay may risk losing their assets due to attacks and programming errors that may occur on the network.
Its also possible to risk losing assets if the individual or business is crypto-illiterate, as managing crypto portfolios and crypto wallets are not something everyone can handle.
The glory of Solana Pay is likely short-lived because as soon as Ethereum completes its proposed upgrade to ETH 2.0 which promises to solve scalability problems, Solana would struggle to attain even its present feat in the future.
Wallets That Support Solana Pay
The ingenious Solana Pay platform supports only three wallets at the moment: Phantom, Crypto Please and FTX.
These wallets exhibit different features as summarized below.
Phantom: Phantom is exclusive to the Solana network and allows users to buy, hold, and swap tokens, cryptos and NFTs.
Crypto Please: This wallet is also exclusive to the Solana network and allows users to send and receive cryptos via Telegram, WhatsApp and other applications.
FTX: FTX is a prominent major crypto exchange that offers numerous cryptocurrencies, including Solana
Solana network has become an interesting blockchain network amongst crypto enthusiasts over the world, the integration of the Solana Pay platform will undoubtedly make online payment processing more interesting, as it integrates NFTs and Web 3 into its system and allows users to transact crypto in a decentralized way