How To Mine Solana

Solana is a popular cryptocurrency and a long-time favorite of crypto investors. But while information about mining Solana might be floating around, it is not completely accurate.

But can you still get additional rewards with Solana? Sure you can! In this guide, we’ll clarify why mining doesn't work for Solana and offer alternatives to it.

Can You Mine Solana?

If you're interested in earning some rewards for your crypto, you've definitely heard the term mining. Miners solve complicated math problems to validate transactions and secure the network. However, this approach takes a large amount of computing power, resulting in high energy usage and hardware costs.

So can you use mining to acquire additional SOL tokens? No, you cannot mine Solana in a traditional sense. Unlike Proof-of-Work (PoW) cryptocurrencies that can be mined, Solana uses a Proof-of-Stake mechanism that operates differently.

This way, you can still gain rewards on the Solana blockchain through staking which is implied by the PoS mechanism. It involves assigning some of your SOL tokens to a validator who verifies transactions and helps secure the network. Validators are paid transaction fees for their efforts; part of these fees are divided proportionally among those who delegated their SOL tokens to the validator.

Look into our Solana staking guide to learn more.

What's the Process for Obtaining Solana?

As we said, there’s no way to mine Solana as it doesn’t use a PoW mechanism to secure the network. Since Solana uses the PoS mechanism, you may open one of the staking services on a smartphone or PC to get rewards by staking.

As you would expect, the process of staking is quite different from mining, and you have several options:

• Delegating: It’s the most common and accessible method. Here, you delegate your tokens to a trusted validator, so there’s no need for technical knowledge. The rewards depend on the validator’s performance and the amount you’ve delegated.

• Using a crypto exchange: Many crypto exchanges offer staking services for Solana, and it’s a great way for beginners. Just make sure to examine the platform’s staking terms and fees before committing.

• Running a validator node: This method offers higher rewards but requires significant technical knowledge and resources, so it is only suitable for experienced users.

Let’s explore the process of staking Solana through a validator. Here’s a general guide for Solana staking:

• Choose a Solana wallet.
• Acquire SOL tokens.
• Pick a validator.
• Delegate your SOL.
• Start earning rewards.

Your chosen wallet will walk you through the delegation procedure on your preferred platform.

Before you start staking, find out how crypto staking is taxed.

Benefits and Risks of Solana Staking

As with any other form of investment, staking comes with its advantages and risks. The benefits of Solana staking include:

• Passive revenue: You can acquire rewards without actively trading or engaging in the process.

• Accessibility: Staking takes far less technical expertise and hardware than mining.

• Low barrier to entry: The staking minimum varies depending on the platform, but they are usually pretty low.

• Scalability: Staking consumes considerably less energy compared to mining. And if you stake through a delegator, no energy is wasted at all.

Of course, there are also risks associated with Solana staking:

• Impermanent loss: If the price of SOL drops down while you stake, your holding will decrease in value, even with rewards.

• Slashing: In case the validator you’ve chosen shows malicious behavior, you can lose some SOL tokens.

• Decreasing rewards: The rewards you earn are influenced by the total amount of SOL staked on the network. If more people stake SOL, the rewards for each staker will decrease.

You now realize that Solana cannot be mined, but there are other ways to join in the network and earn rewards. We’ve explored how Solana staking works as a mining alternative, so you can start earning with it.

We hope this guide was helpful! Please leave your questions and thoughts in the comments!