Solana (SOL) Falls 16% Due to Another Major Network Outage

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  • Solana's novel hybrid blockchain reportedly handles 65,000 transactions per second and is built for decentralized applications, finance, and smart contracts -- supposedly making it a surefire "Ethereum Killer."
  • However, in 2022 Solana had 12 serious outages driving the price of its native coin SOL down more than 78% this year.
  • Yesterday's latest outage shut down the network for four hours and 10 minutes, which means a peak potential of 975 million transactions did not occur during that blackout.

Solana has been touted as an "Ethereum Killer," but its own blockchain has serious stability issues -- with 12 outages so far in 2022.

Over the past 24 hours, the Solana (SOL) coin has fallen from $45.55 to $38.36 across cryptocurrency exchanges, which represents a 16% decline, according to CoinMarketCap. This latest fall is a direct result of yet another network outage that occurred yesterday across the "celebrated" Solana blockchain. Since Jan. 1, 2022 the SOL coin has lost 78.5% of its value -- more than double the percentage loss of Bitcoin over the same time stretch.

How Solana works

Solana's official website touts the platform as "the fastest blockchain in the world and the fastest growing ecosystem in crypto, with thousands of projects spanning DeFi, NFTs, Web3 and more."

Since its launch in March 2020, Solana's blockchain has supported decentralized finance (deFi) and apps as well as smart contracts. The primary focus of the Solana network is to settle transactions quickly at scale. It has largely managed to accomplish that using an innovative dual-consensus model that blends a proof-of-history (PoH) consensus -- which is an encrypted computational series that quickly and securely verifies timing between two events -- with an energy-sipping proof-of-stake (PoS) model.

Solana fans frequently chest-thump that the project can handle 65,000 transactions per second (TPS), leading some mainstream media outlets to dub Solana the "Visa of Crypto Networks." That's very impressive and all -- as long as the Solana network is actually running and fully functional, which seems to be a persistent problem of late.

Solana network suffers twelve serious outages so far in 2022

If you check out Solana's "uptime website" you can count 12 serious outages across its blockchain since Jan. 6, 2022. The duration of the shortest disruption was 75 minutes while the longest shutdown spanned 18 hours and 12 minutes according to Solana's own uptime audit.

The most recent incident was yesterday, June 1, and saw the network down for four hours and 10 minutes. While that might not seem like a huge deal, if you factor in Solana's vaunted 65,000 TPS volume, it's possible that as many as 975 million transactions were blocked on that blockchain during the outage. Summed up in one word -- yikes!

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Is Solana a buy right now?

While the Solana network has some truly remarkable technology that operates like a dream the vast majority of the time, it's difficult to invest in a project that has such an established pattern of problems with network stability.

Even though it's currently trading at a bargain basement discount of 85% from its $260.06 peak set last November, its super-nifty but hyper-glitchy tech is just too much uncertainty for a space that has ample amounts of fear, uncertainty, and doubt already. This is only opinion and not financial advice. Investors should always do their own research, investing only amounts they can comfortably afford to lose.

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