What is Solana Pay? Can it evolve to become Visa/Paypal of Web3? – Kalkine Media

Spread the love

Helping you make informed decisions on investing, money, equities and personal finance. Seasoned investors or newbie traders, our financial education corner has something for all.
Catch the latest updates from Australia’s premier stock exchange & market indices.
What is Solana Pay? Can it evolve to become Visa/Paypal of Web3?
Last month, Solana Labs, developer of Solana public blockchain platform with smart contract functionality, introduced Solana Pay. Solana Pay is a payment platform which is expected to revolutionise digital payments by changing the way merchants accept payment from their customers.
Many believe Solana (SOL) Pay is the latest innovation in the digital payments space as it can facilitate payments involving nonfungible tokens (NFTs) and Web3. Some are also saying this new payment protocol could be the next PayPal or Visa of Web3.
Let us understand what Solana Pay is and how it works?
To understand Solana Pay better, let us first shed light on what exactly is the Solana network.
Also Read: Up nearly 40% in 7 days: Why is MovieBloc (MBL) crypto in the limelight?
Solana is a third generation blockchain based on proof-of-stake (PoS) consensus mechanism, which aims to achieve fast transaction processing time. This network can process over 50,000 transactions per second. Also, it is an open source blockchain with Solana (SOL) as its native currency.
While most other blockchains are efficient in processing transactions, they fail to factor in time as each block runs on the local time of their node. So, due to the absence of a standardised clock, transaction timestamp is different for each block and the time of transaction confirmation that all nodes need to validate increases.
Solana has attempted to address this issue. All nodes on Solana network run on the same clock. So, this reduces the time consumed on transaction validation and speeds up the network. Solana Founder Anatoly Yakovenko calls this consensus method as proof-of history (PoH), which is a modified version of PoS as it takes into account time for verification of transactions.
Also Read: Up over 200% in 4 days: Why is Safuu protocol grabbing attention?
Due to this feature, Solana is capable of processing an average of 65,000 transactions per second with a very low fee.
Like Ethereum, Solana is also a smart contract decentralised finance (DeFi) platform and offers all sorts of decentralised finance DApps. SOL, the native currency of Solana, is used to transact within the Solana network and is given as a reward to validators.
Solana also has its own decentralised exchanges, also known as DEXs, to trade the various tokens built on its platform. For the uninitiated, DEX is a peer-to-peer marketplace that allows cryptocurrency traders to make transactions directly without handing over management of their funds to an intermediary or custodian.
Worth mentioning here is that every DApp built on Solana must have its own SOL-compatible digital token, and on-chain DEXs provide easier access to buy these tokens.

What is Solana Pay ? Can it evolve to become Visa/Paypal of Web3?
Due to Solana’s PoH consensus, Solana Pay is capable of processing faster mass transactions. Although, Bitcoin, ETH and other cryptocurrencies claim to provide a near-instant crypto payment, these networks are not cost-effective and not as fast as they claim. For instance, Bitcoin and Ethereum feature seven and thirteen transactions per second, respectively and are harmful to the environment as well.
Solana claims to be faster and cheaper compared to its peers and hence could be attractive to businesses and customers.
Using Solana Pay, you can make real-time payments with SOL or any other supported Solana token, such as USD Coin (USDC), without the intervention of a third-party such as a bank or payments processor.
Second thing, Solana Pay could be ideal for merchants as it offers detailed reports on every transaction. Details such as wallet destination, currency type, transaction amount and a test field for the merchant to describe a particular transaction are included in the report, which are kept entirely private from others in the network.
As Solana network is in its early stage of development, merchants who switch over to Solana Pay are at the risk of losing their entire asset if a programming error occurs or if there is any attack on the network.
Recently, Solana and other tokens were reportedly affected by a hack, resulting in US$326 million of stolen coins. This reportedly happened on Wormhole, a bridge that connects Solana’s and Ethereum’s blockchains.
Although at this point of time, Solana is faster compared to many of its peers, overall Ethereum is a much bigger platform. Also, it supports more DApps and larger user base compared to Solana. Given that Ethereum will eventually move to Ethereum 2.0, it could challenge Solana.

Integrating Solana Pay is quite simple for merchants. For this, a merchant must have a Solana wallet. From the wallet, merchants need to implement some Solana Pay code into their website and encode subsequent crypto payment request link into a QR code. Customers, by simply scanning the QR code with their SOL-supported wallet, can pay for goods and services.
Bottom Line
No doubt, Solana Pay is a promising digital payments platform, but gaining users is going to be a challenge for the company as blockchain and cryptocurrencies themselves are at a nascent stage.
Till the threat of hacks or other malicious activity is completely dismissed, attracting the masses to use Solana Pay might be an uphill battle.
Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.
Priyabrata Prusty, an analyst-turned-journalist, has nearly two decades of rich experience in various fields of capital market including 8 years in the field of digital journalism. An MBA (Finance) and a CFA level-2 candidate, Priyabrata has worked w…
Supriya is a Research Editor at Kalkine. She comes with a rich experience of 11 years in online journalism. She has worked for leading media brands like Zee News & MSN Australia, specialising in world affairs. She is a Bachelor of Science (Honours) g…

Copyright © 2022 Kalkine Media Pty Ltd. All Rights Reserved.
ACN:629 651 672 ABN:84 629 651 672
Welcome to Kalkine Media Pty Ltd. website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media LLC website. Your website access and usage is governed by the applicable Terms and Conditions & Privacy Policy.
Welcome to Kalkine Media New Zealand Limited website. Your website access and usage is governed by the applicable Terms and Conditions & Privacy Policy.
Welcome to Kalkine Media Incorporated website. Your website access and usage is governed by the applicable Terms and Conditions & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.
Welcome to Kalkine Media Limited website. Your website access and usage is governed by the applicable Terms of Use & Privacy Policy.

source

Leave a Reply

%d bloggers like this: