Solana is a fast, secure, and censorship-resistant blockchain providing the open infrastructure required for global adoption. It differentiates itself from other blockchains by processing transactions as they come in rather than on a block-by-block basis. This achieves a high-performance ideal for the future of decentralized applications.

A blockchain is a trustless, peer-to-peer network of decentralized nodes all verifying transactions for a digital ledger. Blockchains such as Bitcoin batch baskets of transactions into blocks, which are then confirmed and added to the chain. This process of confirming transactions is relatively slow to minimize the chances of multiple validators simultaneously producing a new, valid block. Such a constraint doesn’t come into play in Proof of Stake systems; however, without a reliable source of time, it is difficult for network validators to determine the order of blocks as they come in. Bitcoin’s Proof of Work algorithm essentially acts as a decentralized clock for validators to pick the order of incoming blocks. Solana’s innovative Proof of History (PoH) protocol is a cryptographic way to order transactions and events recorded on the decentralized ledger reliably. Its architecture enables transactions to be ordered as they enter the network rather than by block. This solves the problem of agreeing on time while granting instant finality for hundreds of thousands of transactions per second. Solana's high throughput through its innovative PoH system makes it ideal for decentralized applications (dApps). It offers a more scalable platform with lower transaction costs while maintaining composability for dApps to talk to and build upon each other. Its ecosystem of dApps includes decentralized exchanges (DEXes), stablecoins, payment, gaming, cloud, oracle, and many others.

PoH is not, however, the consensus mechanism for Solana. It is simply how the network improves the performance of Solana’s Proof of Stake (PoS) consensus mechanism.

Purpose of Solana’s Proof of Stake System

Solana’s Proof of Stake is designed for quick confirmation of the current sequence of transactions produced by the PoH generator, for voting and selecting the next PoH generator, and for punishing misbehaving validators. Unlike traditional blockchains, transactions in Solana are not batched into blocks. Instead, blocks are broken up into smaller batches of transactions known as entries. A block in the context of Solana is simply the term used to describe the sequence of entries that validators vote on to achieve confirmation. Validators within Solana’s PoS consensus model are the entities responsible for confirming if these entries are valid.

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