Hedera Vs. Solana – What’s the Difference?

Learning the differences between Hedera (HBAR) and Solana (SOL) is a great way to improve your overall market understanding. Both of these projects provide decentralized infrastructure to enterprise-level clientele. However, once you zoom in, their differences begin to become more evident. Here's some insight into Hedera vs Solana that can help you decide which project is better suited to meet your needs.

What is Hedera?

The first thing to understand about Hedera is that it's not a blockchain. Instead, it’s a new type of decentralized network called a hashgraph. This distributed ledger provides similar technical advantages to blockchains including redundancy and immutability. Additionally, hashgraph provides a more powerful mathematical guarantee compared to traditional blockchains.

What is Solana?

Solana is a layer 1 blockchain that was built with performance in mind. The network was founded by a group of developers from various tech backgrounds including a software engineer from DropBox and a former Qualcomm executive. Solana provides an open decentralized infrastructure that enables anyone to build scalable Dapps.

Source: Twitter @hedera

What Problems was Hedera Built to Alleviate?

Hedera was built to eliminate some of the biggest issues faced by blockchain network users. For one, the network needed to be highly scalable. To that extent, the hashgraph network is an excellent choice as it supports around 10,000 transactions per second. This is much faster than the majority of third-generation blockchains in operation today, but not as fast as Solana.

Additionally, Hedera was designed to eliminate financial barriers to adoption. The network introduces a new fee structure that provides predictive gas pricing to the market. The network also has much lower transaction fees when compared to competitors. The Hedera network charges $0.001 per transaction which puts it ahead of Solana in that regard.

Another major concern was sustainability. There have been a lot of people voicing worries regarding the amount of energy blockchain requires to remain valid. Hedera's hashgraph network is more sustainable because it eliminates the energy-hungry components from the decentralized network equation.

What Problems was Solana Built to Alleviate?

Solana was built to improve scalability for Dapp creators and networks. The network's PoS consensus algorithm can support +29,000 tps with a 2.34-second block time. This scalability makes Solana a popular option for Dapp creators and DEXs. Notably, the platform partnered with the Serum DEX to bring high-performance trading to users early on in the network's launch.

Solana is a low-fee blockchain that provides users with a more fiscally responsible option. The network charges less than $0.01 per transaction. These low fees are possible due to the network's innovative Proof-of-History (PoH) consensus algorithm.

How Does Hedera Work?

Hedera's design relies on hashgraph technology and a custom consensus called Hedera Consensus Service (HCS). Hashgraphs are like blockchains in that they store groups of transactions that are approved by network participants. In the hashgraph ecosystem, these blocks of transactions are called hashes.

The main difference between a hashgraph and a blockchain is that validators can choose the order of transactions. They can also choose to pause or delay transactions from entering the ledger. This flexibility is essential for commercial applications and private blockchains.

DAG

Hedera integrates Directed Acyclic Graphs (DAGs) as an alternative data structure. This technology improves the storage capabilities of the network and provides enterprise-grade security. Hedera was one of the first decentralized networks to successfully implement DAG tech.

Hedera users can stake their tokens to secure passive returns like blockchain networks. Staking is a popular DeFi feature that is preferred to mining because it doesn't require the person to purchase equipment to participate in validating the network.

HBAR Token

HBAR is the utility token for the Hedera economy. Users need HBAR to conduct transactions and execute smart contracts on the network. There are only 50 billion HBAR slated for issuance.

HBAR is a flexible digital asset that can be staked with no minimum. Users secure passive returns when they stake HBAR. Notably, the network has a minimal 24-hour staking requirement. Rewards are paid out in HBAR as well, which makes it easy to enjoy compounding returns.

How Does Solana Work?

Solana is a Proof-of-Stake blockchain. The network leverages a new consensus known as Proof of History (PoH) to provide higher security and greater scalability. The system introduces timestamps into the consensus equation. These timestamps enable the nodes to verify certain stamps rather than the entire history of the network.

Solana (SOL) – Network Stats

The timestamps act as a cryptographic clock that lays out the sequence of events in perfect order. Any entry can be found quickly and confirmed in seconds using the blockchain explorer. One of the best features of this approach is that it provides another layer of validity through the timestamps.

Solana uses a customized version of the Practical Byzantine Fault Toleration (PBFT) system. This new protocol enables the validators to come to a consensus on the correct ledger it also keeps track of their previous votes to ensure that the best nodes are recognized and malicious ones discarded.

Solana Gulf Stream

Solana introduces a new system called gulf stream that better organizes the mempool. A mempool is where transactions sit before they are placed into a block of transactions to be approved. In the gulf stream system, the network begins forwarding the next block of transactions before the last one is complete. This structure enables Solana to hit an impressive 50,000 tps according to the developers.

Parallel Smart Contracts

Another innovative feature of Solana is the Sealevel system. This protocol allows the network to run smart contracts in parallel. Enabling the network to run multiple smart contracts at the same time frees up congestion and allows for nearly endless scalability.

How to Buy Hedera (HBAR) and Solana (SOL)

Currently each Hedera (HBAR) and Solana (SOL) are available on the following exchanges:

Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.

Uphold Disclaimer: Terms Apply. Cryptoassets are highly volatile. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong..

Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.

The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is a top exchange for USA residents. (Excluding New York & Washington state).

Hedera Vs. Solana – What's the Difference?

When you review the data it is easy to see that both of these works provide impressive performance. Solana is a bit faster than Hedera. However, Hedera's use of hashgraph technology gives it a slight edge in terms of validation systems.

You can see that both of these networks provide sustainability and functionality to the market. Additionally, each has very low fees with Hedera charging fractions of a cent. As both of these projects target similar clientele, it's wise to try both options to see which one meets your requirements.

To learn more about each of these projects, check out our Investing in Hedera and Investing in Solana guides.