Solana Coin Investment: A Beginner's Guide To Getting Started

Solana (SOL) is a decentralised, peer-to-peer digital currency that aims to revolutionise the traditional financial landscape by enabling a faster, more user-driven, and economical financial ecosystem. In this article, we will discuss how to invest in Solana Coin.

Choosing a crypto exchange

To buy the Solana token (SOL), you need to open an account with a crypto exchange. A crypto exchange is a platform that facilitates trades of cryptocurrency, serving as an intermediary between buyers and sellers.

There are several crypto exchanges that allow users to buy and sell SOL with U.S. fiat currency (USD). These include:

• Binance
• FTX
• Coinbase
• Kraken
• Gemini
• Bilaxy
• Huobi Global

Some cryptocurrency exchanges also allow you to buy and sell Solana paired with Tether (USDT), a stablecoin. Stablecoins are cryptocurrencies with a more stable valuation, making them a safer option for new investors. Exchanges that pair SOL and USDT include:

• Bitfinex
• Bitrue
• BitMax
• Poloniex

When choosing a crypto exchange, look for one that offers low account minimums and low trade fees. It is also important to consider the security and reputation of the exchange, as well as the payment methods accepted. Some exchanges may charge higher fees for certain payment methods, such as credit cards.

It is also worth noting that some exchanges may have higher trading volumes for SOL, which can impact the liquidity and price of the token. For example, as of September 2021, Binance had the highest SOL/USDT trading volume at $753,103,225, followed by Coinbase at $343,872,841.

Once you have chosen an exchange and created an account, you will need to fund your account using your chosen payment method. After that, you can place your first order for SOL by entering the amount you want to invest and selecting an order type, such as a market or limit order.

Funding your account

To fund your account, you can use existing cryptocurrency holdings or your bank account, debit card, or credit card.

If you are thinking of using a credit card, be aware that the credit card company will likely treat the transaction as a cash advance, and you will have to pay cash advance fees and a higher annual percentage rate (APR). Also, going into debt to invest—especially in cryptocurrencies—can be volatile.

Some exchanges allow you to buy cryptocurrencies with a gift card. For example, Coinbase allows you to use a digital gift card purchased from online merchants to redeem on Coinbase accounts for the purchase of Solana. However, gift cards are currently only available in the U.S.

• Wire and bank transfers
• ACH transfers
• Apple Pay and Google Pay
• Debit card purchases
• Crypto transfers

Buying Solana

To buy Solana (SOL), you need to open an account with a crypto exchange. You can buy Solana on popular Bitcoin exchanges like Binance, FTX, Coinbase, Kraken, and Gemini. If you prefer using a crypto broker, then eToro is a good platform.

Choosing a Crypto Exchange

When comparing your options, look for a crypto exchange that offers low account minimums and low trade fees.

Funding Your Account

Once you have an account, you need to fund it. You can fund your account with existing cryptocurrency holdings or with your bank account or debit card. You can also use a wire transfer, Apple Pay, Google Pay, or a crypto transfer.

Some cryptocurrency exchanges allow you to buy cryptocurrencies with a credit card, but you should be aware that the credit card company will likely treat the transaction as a cash advance, and you will have to pay cash advance fees and a higher annual percentage rate (APR).

Placing Your First Order

Once your account is funded, you can place your first order. Type in Solana’s ticker symbol (SOL) and the amount you want to invest, such as $25 or $50. Typically, you can select an order type, such as a market or limit order.

Storing Your Solana

When you invest in Solana or other cryptocurrencies, you must store your tokens using a crypto wallet. There are several storage options available, each with its own risk profile and intended use:

• Hardware Wallets: A hardware wallet is a physical device that resembles a flash drive. Unlike other storage options, hardware wallets are not connected to a network or the internet, so they are considered “cold” storage and are generally more secure.
• Paper Wallets: A paper wallet secures your private keys on a piece of paper or with a printed QR code. If you decide to use a paper wallet, be sure to have a plan for where to store it; if you lose that paper, you won’t be able to access your cryptocurrency.
• Software Wallets: You may prefer a software wallet if you want more convenient access to your cryptocurrency and an easier way to buy and sell your holdings. With this option, you use a software program or downloadable app to store your crypto. The software is connected to the internet, so it’s less secure than hardware or paper wallets, but more convenient.
• Crypto Exchanges: Some crypto exchanges, such as Coinbase, will store your crypto holdings. However, relying on an exchange to handle storage can be risky, and it’s usually only a good idea for small amounts and short periods.

Storing your tokens

A crypto wallet is a device or application that stores a collection of keys and can be used to send, receive, and track ownership of cryptocurrencies. Wallets can take many forms. Solana supports multiple types of wallets so you can choose the right balance of security and convenience.

Browser and mobile app-based wallets

Several browser and mobile app-based wallets support Solana. These are user-friendly and allow you to create and manage your wallet.

Hardware wallets

A hardware wallet is a specialised device that stores your secret and public keys. Solana supports hardware wallets, such as a Ledger device.

Command-line wallets

For advanced users or developers, a command-line wallet may be more appropriate. New features on the Solana blockchain will always be supported on the command line first before being integrated into third-party solutions.

Paper wallets

A paper wallet is a simple way to store your keys. You can write down your secret and public keys on a piece of paper and store it in a safe place.

Computer file wallets

A wallet can also be stored as a directory or file in your computer's file system.

Key security

It is important to keep your secret key secure. If someone gains access to it, they can withdraw all the tokens in your wallet. If you lose your secret key, any tokens sent to that wallet will be permanently lost.

Using Solana to pay transaction fees

Solana (SOL) is a type of digital cryptocurrency that uses peer-to-peer transactions, mining, and other technological tools to create a modern-day asset. It is a blockchain protocol that aims to push the DeFi ecosystem into mainstream use. It also supports NFTs, which have become increasingly popular.

Solana is a leading blockchain platform and a growing rival to Ethereum. While Solana claims to be the fastest blockchain in the world, its low fees make it very attractive to users. Solana has a base transaction per second (TPS) throughput of 50,000, with its founder and CEO Anatoly Yakovenko eyeing the 700,000 TPS mark. This would make Solana the fastest-processing dApp protocol in the blockchain ecosystem.

Solana's transaction fees are very low compared to other coins. The current base Solana transaction fee is set at a static value of 5k lamports per signature. On top of this base fee, any additional prioritization fees can be added. The prioritization fee is an optional fee to boost transactions' processing order. The prioritization fee is calculated by multiplying the compute unit limit by the compute unit price (measured in micro-lamports).

Solana's low fees are due to its faster block time and larger block size compared to other coins. Solana has a block time of 0.4 seconds and a block size of 20,000 transactions, while Ethereum, its primary competitor, has a block time of 13 seconds and a block size of 70 transactions. This makes the Solana network incredibly cheap, with a transaction fee of just $0.00025 per transaction.

If you purchase the Solana token, you can use SOL to pay transaction fees for running smart contracts or other transactions. It can also be used for staking, where you can stake your SOL tokens and earn rewards.

Frequently asked questions