Solana’s roller-coaster is nothing short of splendid. The crypto token’s market cap reached highs of $62 billion this month. In a year, its price rose steeply to 6,000%. It was even hyped as the better alternative to Bitcoin and Ethereum.
But despite the glitz and glamor, the Solana token experienced a 17-hour blackout last week. And the blockchain the cryptocurrency runs on — touted as the fastest in the world — hit a snag, disrupting investor’s ability to buy and sell.
The token’s network simply failed and further transactions stalled. The hitch is regarded as a big shame-on-you on the token’s network, which boldly claims — on its slicker than Apple.com website — that “transactions will never be stopped”.
But guess what? They finally were.
The cryptocurrency industry needs to scale up
A “resource exhaustion” was the reason for the hitch, according to Solana’s blockchain experts. Some crypto fans, seething with anger, shared their frustrations on social media. Others rallied to Solana’s defense. That’s expected when a blockchain outage occurs.
Teddy Furaso, president of Bitwise Asset Management, says although crypto markets are touted as a phenomenon, they sometimes fail. And this reflects the novelty of the crypto industry. “… [That’s why] the industry needs to scale”, he adds.
Any massively growing technology — such as an app, website, or blockchain — will, at some point, experience some teething problems.
I guess the founders and early adopters of Solana didn’t foresee a legion of fawning fans someday jamming the networks. Even trigger a high response enough to cause bandwidth constraints. But it happened, and the fans broke the Solana crypto network.
Digital outages are a common phenomenon
In 2019, Facebook Inc. experienced a global digital outage that negatively affected advertisers, forcing Facebook to reconsider refunding them.
Last year, Robinhood Markets Inc. was fined nearly $70 million in record settlement over regular outages.
Recently, Binance and Coinbase Inc. went offline at moments when the markets went into a craze, and the prices soaring to unforeseen levels. Last week, the Arbitrum blockchain network suffered a digital outage.
Solana Labs co-founder, Anatoly Yakovenko, perhaps judging from the above outages, shrugged off this week’s Solana’s crypto outage as a “growing pain”.
He said that it’s impossible to fully promise that the network will be bug-free. Because volunteers run the blockchain. “Random people with different incentives”, he adds.
His comments reveal an important truth: Crypto markets rely heavily on numerical codes for support for speed, security, and performance boost. So, they’re bound to be vulnerable to attacks and technical difficulties.
