A Beginner’s to Understand How to Purchase Solana

Purchasing Solana is easy. However, several crypto exchanges on the market compel potential investors to consider other critical factors before purchasing. 

Solana is a high-speed blockchain platform that can process up to 65000 transactions every second. Buying cryptocurrency is pretty straightforward.

Nevertheless, potential investors must fully comprehend Solana (SOL). This entails comprehending how the Solana blockchain functions and the most suitable purchase strategies for their geographic location.

Understanding Solana Network and SOL

Solana involves a smart contract-compatible blockchain whose hybrid consensus mechanism differentiates it from competitors. The mechanism entails proof-of-stake and proof-of-history. 

Solana’s special mechanism permits nodes to process transactions without needing to communicate with each other. As such, transaction processing time is reduced significantly. 

SOL has two main functions in the Solana ecosystem, including serving as payment to node operators for processing transactions and being a mechanism to secure the Solana network through staking. Nevertheless, investors can also buy solana and hold them, anticipating a price increase against fiat currencies. 

SOL can be bought in various ways. Despite crypto exchanges’ efforts to persuade users that purchasing solana is straightforward, an investor’s perception of crypto and personal investment strategy affect the purchasing process.

Selecting Suitable Platform to Acquire Solana (SOL)

There are more than 200 centralized crypto exchanges. The several options evoke the need for potential solana investors to pick the most appropriate exchange for their geographic area and investment approaches.

One can consider purchasing SOL using a decentralized crypto exchange. Decentralized crypto exchanges run in the absence of a central authority, where trades happen directly between liquidity pools and users’ wallets.

Decentralized crypto exchanges utilize smart contracts to automate order matching and settlement. On the other hand, centralized exchanges are run by a firm that links sellers and purchasers.

Every platform has its pros and cons, as explained below.

Buying Solana (SOL) on Centralized Exchange

Advantages

• Ease-of-utilization: The exchanges are more user-friendly, providing client support and spontaneous interfaces.
• Liquidity: Centralized exchanges mostly have higher liquidity, easing the purchase and sale of solana.
• Regulation: Some users might opt to use centralized exchanges because of the potential regulator oversight and guardrails executed by established crypto firms.

Disadvantages

• Privacy concerns: The exchanges might need extensive private data, evoking privacy concerns.
• Centralized control: The crypto exchanges control vast amounts, which may evoke problems such as trading manipulation and downtimes.

Buying Solana(SOL) on Decentralized Exchange (DEX)

Advantages

• Security: The exchanges minimize the risks of theft and hacking.
• Anonymity: Users can trade on the exchanges without extensive user screening conditions.
• Fees: Users only pay the network fee.

Disadvantages

• Liquidity: Liquidity can be reduced, resulting in possible problems with carrying out large trades.
• Smart contracts risks: Problems with smart contracts can lead to financial losses.
• User experience: Some exchanges might have a steeper learning curve and reduced intuitive interfaces. 

SOL’s Purchasing Process Explained

Purchasing SOL on a Centralized Exchange

First, one must pick a trustworthy exchange that supports SOL like Binance and Coinbase. An account should be created by offering an email address and setting a robust password. 

The identity verification process should be completed by providing a photo ID and enabling two-factor authentication. Funds can be deposited using a credit card or other payment methods.

After the account is funded, a suitable trading pair should be selected to execute the purchase.

Purchasing SOL on a Decentralized Exchange

One needs a wallet compatible with the Solana network. The wallet must have adequate crypto to complete the purchase and cover the transaction fee.

The wallet should be linked to the decentralized exchange website. After the connection, the person must pick the trading pair that matches the funding source and set the amount of solana to be bought.

End Thoughts

Buyers should safeguard their investments. In case SOL was bought on a centralized exchange, the exchange acts as the cryptocurrency custodian, and users should not worry about securing their private keys.

A robust alphanumeric password and two-factor authentication should be used to safeguard the account. In case of purchase on a decentralized exchange, the purchaser serves as the custodian of their private keys.

Private key storage can happen in a cold wallet that is not linked to the wallet or a hot wallet that is linked to the internet.