Table of Contents
Introduction
Through the middle of 2017, the term Proof of History (PoH) did not yet exist. That all changed in November of that year, when Anatoly Yakovenko published the Solana whitepaper, and with it, released the Proof of History proposal to the world.
At the time, Bitcoin and Ethereum could muster up about 15 transactions per second. The Proof of History concept immediately allowed that number to shoot up to 150,000!
Solana is available on several marketplaces, which you can read all about in our previously written article here.
History
Multiple people were involved in the founding of Solana, but the one to write the whitepaper and stands as the de-facto face of the organization is Anatoly Yakovenko.
Anatoly’s background was at Qualcomm, designing distributed systems, then to Mesosphere and Dropbox, where over that time, he watched centralized payment systems require peaks of 65,000 tps.
The Tech
What is Solana?
Solana was created for two main reasons: speed and cheap transaction costs. Both these can be accomplished using the a first-ever combination of the proof of stake (PoS) and proof of history (PoH) consensus mechanisms.
Proof of Stake
As the most common alternative to the original proof of work validation mechanism, you may already be familiar (or at least have heard of) proof of stake.
Critics cite several issues in the proof of work consensus method, the most common being energy usage. So, proof of stake was created with the same end-goal – to allow a decentralized network reach a secure consensus – but where sheer computational power (PoW) is switched to severe financial risk for being dishonest (PoS).
A validator in the proof of stake mechanism will “stake”, or put a financial incentive in, to the protocol as an assurance that he will not collude with others and will do the right thing. This way, validators have “skin-in-the-game” that they will lose if they do not keep the network honest. Finally, consensus is achieved when 2/3 validators, chosen at random, agree on the state of the block.
Proof of History
Proof of History achieves consensus by cryptographically and trustlessly verifying the passage of time between two events. Each successive calculation input depends on the prior output, so the function cannot be solved without running in a sequence.
Technical Example
As all these operations are cryptographic, each is sha256 encrypted. Here is an example:
| Index | Operation | Output Hash |
| 1 | sha256(“any random starting value”) | hash1 |
| 2 | sha256(hash1) | hash2 |
| 3 | sha256(hash2) | hash3 |
In other words, hashN represents the actual hash output. However, this is a simple example where inputs become outputs that become inputs. No relevant data is being passed through.
So, now, for the fun part! Let’s say some arbitrary digital data was created – a photograph was taken:
| Index | Operation | Output Hash |
| 1 | sha256(“any random starting value”) | hash1 |
| 200 | sha256(hash199) | hash200 |
| 300 | sha256(hash299) | hash300 |
| 336 | sha256(append(hash335, photograph_sha256)) | hash336 |
In this, more realistic, example, the previous output (hash335) and the photograph data (photograph_sha256) are recorded as part of the sequence output.
Because the input still included the prior output, we are sure that the sequence had to occur at some point in time before the next operation was computed.
Why it matters
Each validator on the network is assigned a “slot”, ahead of time, when they will be expected to begin their calculation. The “slot leaders” can stream transactions to the rest of the network in real-time, rather than waiting to fill and send an entire block at once. This system allows for a massive decrease in latency and increase in throughput.
Are there concerns
As always, that answer is “Of course, there are concerns.” As you likely know, decentralization is a hot-button topic in cryptocurrency, and one of the main concerns with Solana is the lack thereof.
Nobody is sure how this will all play out, but one thing to keep in mind, the Solana token was first released in 2019. Bitcoin and Ethereum were released in 2009 and 2015, respectively. Both of the, now world’s largest, cryptocurrencies were quite centralized when they were unknown, untested, and even more volatile than now. It seems as confidence builds in a project, more people are willing to jump in to support, decentralizing the platform.