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Solana is a leading blockchain platform and a growing rival to Ethereum. While Solana claims to be the fastest blockchain in the world, the platform’s popularity and scalability have made its native token—SOL—one of the top 10 cryptocurrencies by market cap.
Compared with well-known cryptocurrencies like Bitcoin and Ethereum, Solana’s price is relatively low, trading at around $US65 at the time of this writing, making it an attractive option for new investors. If you want to invest in Solana, here’s what you need to know to buy and sell SOL.
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What Is Solana?
With a name inspired by an area of coastal California, the Solana project began in 2017 by Anatoly Yakovenko, who once led the development of operating systems at Qualcomm.
So how does Solana compare with other cryptocurrencies? Yakovenko found that Bitcoin and Ethereum had scalability issues. At the time, they couldn’t process more than 15 transactions per second (TPS).
The former Qualcomm engineer designed Solana, a Layer 1 protocol, to be a blockchain platform that could host decentralised, scalable applications at much faster rates and lower costs.
This crypto’s key innovation is its “proof of history” (POH). POH is not a consensus mechanism like proof of work or proof of stake. Instead, it’s a system that revolves around a “crypto clock.” Each Solana node maintains its own clock, encoding the passage of time into an SHA-256 encryption, a widely used hashing algorithm.
As of December 2023, Solana processed an average of 3,900 TPS. Its lightning-fast processing times make it appealing to developers, who hope its low fees will make it competitive against centralised payment processors in the future.
Today, Solana is used to support decentralised finance projects, including non-fungible tokens (NFTs), decentralised app developments (also known as dApps) and smart contracts. According to Yakovenko, more than 15 million NFTs are listed on Solana.
Solana token’s SOL is a native crypto token used for transactions on the blockchain, including micropayments. Users can also delegate and stake SOL for additional rewards. Currently, there is a supply of 424 million SOL with a total supply of 563 million.
Where Can I Buy Solana?
To buy the Solana token SOL, you need to open an account with a crypto exchange. There are many exchanges that operate in Australia where you can buy SOL with Australian dollars, including Kraken, Coinbase and Binance.
With some cryptocurrency exchanges, you can buy and sell Solana using stablecoins such as USDT or USDC. If you’re relatively new to the cryptocurrency world, a stablecoin is a cryptocurrency with a more stable valuation, typically pegged to the value of fiat currency like the USD.
How to Buy Solana (SOL)
To buy SOL tokens, follow these three simple steps:
1. Choose a Crypto Exchange
Crypto exchanges are platforms that facilitate trades of cryptocurrency, serving as an intermediary between buyers and sellers. Some exchanges are simple, but others are more suited for experienced investors.
When comparing your options, look for a crypto exchange with low account minimums and trade fees. To help you get started, we researched available options and selected the top cryptocurrency exchanges for Australians.
2. Buy SOL
Once you have an account, you need to fund it. You can fund your account with existing cryptocurrency holdings, or you can fund it with your bank account or debit card.
Some cryptocurrency exchanges do allow you to buy cryptocurrencies with a credit card, but you should think twice before using that payment method; the credit card company will likely view the transaction as a cash advance, and you’ll have to pay cash advance fees and a higher annual percentage rate (APR). Plus, going into debt to invest—particularly in cryptocurrencies—can be a risky move.
Once your account is funded, you can place your first order. Just 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.
3. Store Your SOL
When you invest in Solana or other cryptocurrencies, you must store your tokens using a crypto wallet.
There are several storage options available; which are best for you is based on your risk tolerance level and intended use for your cryptocurrency:
- 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’re considered “cold” storage and are generally more secure.
- Software Wallets. You may prefer a software wallet if you want more convenient ways to access your cryptocurrency and 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 you can more easily use your cryptocurrency.
- 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
- Paper Wallets. As the name implies, 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, have a plan on where to store it; if you lose that paper, you won’t be able to regain access to your cryptocurrency. Paper wallets were popular before hardware wallets became accessible and are now considered outdated.
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What You Can Purchase With Solana
As the native currency for the Solana blockchain, SOL has many uses. The most significant is its use for transaction fees on the Solana blockchain. Without SOL, you cannot post a transaction on the chain, so all Solana users must own some. SOL can also be staked, which means locking up your tokens in return for rewards.
Like most cryptocurrencies, you can trade SOL with many other cryptocurrencies. SOL is ranked the 6th largest cryptocurrency as of December 2023, meaning it has significant liquidity. This can be advantageous for traders moving large volumes of money, allowing orders to be filled quickly against other liquid trading pairs.
The Solana blockchain also hosts many decentralised finance (DeFi) protocols that you can use for various activities, such as lending, borrowing, or liquidity pooling to earn rewards. NFTs are also extremely popular on Solana, so if you are looking to dip your toes in the world of digital art, Solana could be a great place to start.
As with any cryptocurrency, investing in SOL can be risky. Only invest what you can afford, as your investment could lose value.
Frequently Asked Questions (FAQs)
How to Buy SOL in Australia?
To purchase Solana (SOL) in Australia, you typically need to set up an account with a cryptocurrency exchange that operates in Australia and supports SOL. This process involves registering on the exchange, completing any required identity verification (which may include providing ID and proof of address), and setting up security measures like two-factor authentication. Once your account is set up, you can fund it with Australian dollars using bank transfers or debit/credit cards. After funding your account, you can buy SOL directly on the exchange platform.
Can You Buy SOL on Binance?
Yes, you can buy Solana (SOL) on Binance. To buy SOL on Binance, you must first create and verify your account. After logging in, you can fund your account with AUD or another cryptocurrency and use those funds to purchase SOL. Binance offers different trading pairs to trade SOL against cryptocurrencies, such as Bitcoin, or directly with fiat currencies.
How Much is Solana Worth in AUD?
As of 3rd December 2023, Solana (SOL) is valued at approximately $91.50. However, it’s important to note that cryptocurrency prices are highly volatile and can change rapidly. For the most current price, it’s advisable to check a reliable financial news source or a cryptocurrency exchange that lists SOL.
Where Will Solana Be in Five Years' Time?
Predicting the future price or position of Solana (SOL) over the next five years is challenging due to the volatile and unpredictable nature of the cryptocurrency market. Factors such as technological advancements within the Solana network, emerging competitors, regulatory changes, and broader economic conditions can all significantly impact the future of crypto and SOL. While some analysts and enthusiasts may provide optimistic forecasts, it’s important to approach such predictions cautiously and conduct thorough research before making investment decisions.
