Imagine that a new sneaker that you have been waiting for has just dropped in a nearby store. You then walk into the store, pull out your phone, scan a QR code and buy the sneaker. But as you walk out of the store, two tokens are added to your digital wallet. The first token is an NFT of the sneaker that you just bought, which can be used in your favorite game. The second token is an NFT receipt, allowing you access to exclusive communities.
Solana Pay envisions the above scenario as the future of processing payments. It creates a seamless shopping experience by combining digital payments with Web 3.0. First, we must understand Solana to figure out how this works.
What is Solana?
Solana was founded in 2017 and its goal was to create a blockchain that makes transactions secure, simpler, and faster. The Solana blockchain has become one of the most popular crypto platforms in the last few years.
Anatoly Yakovenko built Solana because he felt something was holding back the older blockchains as they were working towards becoming more efficient. Time was not taken into account in Ethereum and Bitcoin blockchain transactions. Subsequently, time became another step of verification. Transactions were not processed based on time, creating further complications.
Proof-of-history was created by Yakovenko as a unique consensus mechanism that allowed all transactions to match with a standardized clock. Blockchain transactions become a lot more efficient when using timestamping. Consequently, Solana could process more than 65,000 transactions per second. Solana also kept very minimal fees to complete transactions and was introduced to bring blockchain’s potential capabilities to a larger audience.
How does it work?
Solana Pay is built on the Solana blockchain and is used as a digital payment platform. Customers and businesses engage in seamless transactions that are free of fees and are instant. This platform has low energy usage, unlike Bitcoin, making it an environmentally friendly and sustainable platform.
The Solana platform can enable new features and functionality as it has an open software development kit. Developers can eliminate financial intermediaries and can easily integrate Solana D Apps to Solana Pay. Users can also propose changes and build on this base by adding on to their Github.
Merchants on Solana Pay
Solana Pay has a lot of benefits for merchants. It does not charge any fees on payments, unlike many other old payment methods. This is a peer-to-peer system where there is no intermediary between customer and merchant.
Current businesses can easily implement Solana Pay. You just need to create a Solana wallet, either through a crypto exchange or individually. Then, link your website to the Solana wallet to accept crypto payments. Lastly, QR codes can be generated from payment links to complete transactions with Solana Pay.
The Solana platform has many other advantages. You can start earning interest on any payments made to you with Defi. It also reduces the chance of fraud as it does not allow chargebacks. Finally, it is easier to create loyalty programs, personalized offers, and other digital goods after physical purchases. This also creates a new channel of communication with customers.
Solana Pay Pros
Efficiency is the main focus of newer blockchains like Solana. It performs much faster than other popular platforms because of its unique implementation. Solana can support 65,000 transactions per second, while Bitcoin can only support 7 transactions per second and Ethereum can support a maximum of 108 transactions per second.
Intermediaries like Visa or Mastercard and banks are eliminated from transactions by Solana Pay. Customers and merchants are the only ones involved in the transactions. There are no fees attached to the transaction, making it cheaper and simpler.
Solana also provides complete information about every transaction. Information like currency, transaction amount, destination wallet, and payment purpose is included. This data cannot be seen by anyone else and is private.
Solana Pay Cons
Solana is overshadowed by the popularity of Bitcoin and Ethereum, despite being more efficient. The number of users willing to adopt the new platform is relatively low. This is also because of the reluctance of users to shift their wallets and assets to Solana.
Early adopters may suffer as it is a new platform. Merchants can be left exposed as they are vulnerable to hacks and bugs. Because the Solana Pay network is far from perfect, developers and merchants may need some time to become acquainted with it.
The Verdict
Solana Pay allows customers and merchants to come together for a new payment experience. It seems to be a better alternative to older blockchains due to its fast network. It also allows for decentralization and all the benefits that come with it. A serious concern is reliability, but it can only be solved with higher adoption and in time.
