How to Buy Solana (SOL)
Solana is still a new cryptocurrency. It is only within the last couple of years that investors and traders interest in Solana has sky rocketed. As a result the amount of exchanges where you can buy Solana has increased.
However there is not a huge diversity of other platforms where you can buy it. So crypto ATMs, mutual funds or ETFs are out of the question at this point in time.
In this article you will find out:
- where and how to buy Solana,
- platform comparisons and how to save on fees,
- whether Solana is a good investment,
- how to secure your Solana and
- ways you can earn passive income from Solana.
Best Exchanges to Buy Solana
Best Trading Platforms to Buy Solana
Exchanges vs Trading Platforms to Buy Solana
Whether you use an exchange or trading platform you have to sign up to the site. The difference is when you go to buy Solana.
Buying Solana from an exchange is the easiest method to buy any cryptocurrency. They have a simplified exchange area similar this Kraken example below. As you can see all you need to do is select the cryptocurrency you want to buy and the amount.
It’s when you opt to buy Solana from a trading platform where it becomes a little bit more tricky.
Trading platforms are a little bit more complex. Additionally some have a few more options than others. You can master how to use a trading platform fairly quickly. Here is an example of a trading platform.
However we recommend you stay away from using leverage because it is dangerous for anyone new to trading. You can end up losing everything and it is something you want to want to avoid.
On the other hand trading platforms have cheaper fees than exchanges. So you will save quite a bit of money and buy more Solana instead.
If you are new to cryptocurrency we recommend you stick to the easy exchanges for a while. That is to say until you get used to crypto. After that you can go on to mastering the next level up.
You should also note that exchanges usually have both a simplified exchange area and a separate trading area. Not only is the interface different, but so are the fees. So although you might sign up for an exchange you can always use the same account to trade in future.
Save Money on Fees When You Buy Solana
Apart from using a trading platform to save on fees you should also avoid using a credit card. Credit cards come with additional fees that are charged by third party providers. As a result you could end up paying up to 3.5% more.
The best way to buy Solana or other cryptocurrency is by using bank transfer. Bank transfers are usually free or come with minimal fees when you deposit into an exchange or trading platform.
The only drawback is that you will have to wait until your deposit goes through. It could take up to 5 working days. However some countries have a fast track system where 2 or more transfers are processed quicker.
Each exchange or trading platform have different fees. So you might want to check the fee charges before you sign up.
Although fees are not necessarily the only thing you want to look at when you pick an exchange. Hence why we have a review for each exchange or trading platform. All the exchanges and platforms listed here are the best of their kind. However there are subtle and major differences between one and another.
How to Buy Solana From an Exchange
We have put together an easy guide on how to buy cryptocurrency. This guide goes through the step by step process with you. It shows how to buy any cryptocurrency including Solana on any exchange.
The process is quite simple and goes into more detail on:
- Signing up
- Confirm your email
- Verify your account – Exchanges are money businesses. So you will need to submit documents to verify you are who you say you are.
- Wait for account approval
- Deposit into your account
- Buy Solana
The whole process is pretty straight forward and similar to signing up for any other website. The only difference is that you have to submit documents so it takes a little more time. You have to make sure you set some time aside to set up your account.
After that you will need to wait for the exchange to get back to you. Each exchange is different and some are more efficient than others. Some will verify your account within an hour. Others will take several days.
Solana Wallet – Securing Your Funds
After you buy Solana you want to make sure you properly secure it. Especially if you are not going to actively trade it, stake it to earn passive income or anything like that. Consequently that means removing it from the exchange and placing it in a secure wallet.
The best wallets are the ones where you are in custody of your own private keys. As a result you do not have any third parties that have access to your funds. Only you have access. This is not the case when it comes to exchanges. In fact this is why you should remove your Solana from the exchange.
Exchanges have been hacked and their crypto funds stolen many times in the past. Some of these heists have made it to the headlines because millions of client funds got stolen.
Sourced from NBC News
There are a range of different wallets you can use, but the wallets with the best security are hardware wallets. Currently from the best hardware wallets available, only Ledger supports Solana. You can have a look at the Ledger review here.
They do cost some money to buy, but they are more secure than free hot wallets. In fact some free hot wallets were already compromised by malware called BHUNT. On the other hand hardware wallets have been around for years and not had any security breaches.
Incidentally you can also stake your Solana through Ledger’s software interface; Ledger Live.
Why Solana is Surging
Solana started getting a lot of attention the past couple of years.
Solana is a crypto commodity like Ethereum so it has a programmable blockchain. However the fees on Ethereum have gone up significantly. Sometimes the fees have gone up over $100, even for small transactions.
In fact it has put off some investors since the fees are so exorbitant. On the other hand Solana’s fees are cheaper than $0.01. As a result a lot of people have shifted over to buy Solana and use it instead. Partly for this reason.
What Solana Offers
- Smart contract blockchain
- Thriving ecosystem
- Processes 50,000 + transaction per second
- Social tokens
- Cheap fees
Solana offers just as much as Ethereum. Except since Solana came onto the scene way after Ethereum, it has some improvements to Ethereum’s blockchain.
Firstly Solana is scalable up to 50,000 on default. In fact Solana is thriving because Ethereum can only process up to 45 transactions per second.
This is until Ethereum can implement the ETH 2.0 upgrade. The upgrade will increase transactions per second to 10,000+ which will reduce network congestion. As a result it will stop fuelling the gas prices and they will decrease.
In the meantime Solana is looking poised to continue gaining momentum. Perhaps even after Ethereum’s upgrade.
Solana vs Ethereum
Here is an overall comparison between Solana vs Ethereum as they stand now. However when Ethereum goes through its upgrade there will be less differences.
|Transactions per second||15-45 tps||50,000+ tps|
|Consensus mechanism||Proof of work||Proof of stake and proof of history|
|DeFi investment||$82.4 Billion||$1.98 Billion|
Is Solana a Good Investment?
There are some people that are sceptical about Solana’s claim to process 50,000+ transactions per second. In fact network disruptions have hit Solana several times already which proves they are right.
Sourced from The Motley Fool
However as the article on The Motley Fool explains these are no more than teething problems. Solana is growing very quickly. So much so that it is having trouble keeping up with community demand. The good news is this is bullish for the long term.
In fact investors’ confidence has not diminished at all towards Solana. We have noticed that for a lot of investors it is one of the top projects that has kept investors interested. As a result it is in the 6th spot for the crypto with the largest market cap.
Sourced from CoinMarketCap
There is a good case to buy Solana. It has an experienced team with great skillsets to carry the project forward. Additionally it has applications already and the crypto community are adopting Solana at break neck speed.
Solana has quite a lot going for it so it is no wonder it has done well. In fact when Solana started trading it was priced at $0.78 and on the 5th April it is at $133.38. That is a whopping 17,000% price gain in just a couple of years.
Sourced from CoinMarketCap
There are many people invested in Solana including some heavy weights. One investor is Raoul Pal an experienced investor that managed billions. When asked about Solana he said:
When you start a bull market you own Bitcoin, then you start overweighting ETH. Then what happens is, everything that is riskier starts goes up more. So these are things that are earlier in their adoption cycle… so that’s how bull markets always work.Raoul Pal
How Solana will Perform in the Future
No one knows if Solana is going to be the crypto to give the most gains this cycle. Moreover we do not know how it will perform after this cycle top.
For Solana to continue to do well it needs to survive this cycle and the lows of the next. It also needs to continue with its high rate of adoption.
Since Solana is a proof-of-stake crypto you can stake SOL to secure the network. In return you receive a reward for helping the network.
As a result staking is a great way to earn some passive income. It might give you an additional reason to buy Solana. However staking does come with its fair share of risk.
Firstly, it is important to understand that staking involves locking your Solana for a certain period of time. During this time you cannot unstake your Solana from the platform.
The biggest risk is if Solana suddenly and drastically drops in price. If this happens your interest payments will also go down drastically. Additionally when you eventually unstake your coins you may have an unstaking period or around 7 days or longer.
Solana Staking Pool
The best way to make sure you can get rewards for staking is to join a staking pool. Like this you can join your funds with others to increase your chances of earning rewards.
Different pools will give you different percentage rewards. Additionally the reward rate may change according to the on-chain reward rate. Here are some staking pool rates as of 5th April 2022.
|Exchange / Platform||Staking rate|
|Binance||Up to 13.47% APY|
|Bitfinex||Up to 6.5% APR|
However the most secure way to stake Solana is by using Ledger. This is because it is the same principle as securing it to take it off the exchange. You will have full control of your Solana by staking it through your Ledger device.