Introduction to Polkadot
Polkadot is being developed by Chainsafe Systems, Parity Technologies, and Soramitsu and was released on May 26, 2020. Since then, it has quickly risen to one of the top cryptocurrencies with high market capitalization in the top 20.
The cryptocurrency is an open-source blockchain platform that allows independent blockchains to communicate with one another. While interoperability is common within blockchain ecosystems, it has yet to be achieved and implemented in the crypto world. But Polkadot does this without the need for a trusted third party.
Also, because of this, the platform enables cross-chain data or asset transfers between blockchains. Additionally, it helps create cross-chain DApps (decentralized applications) via the Polkadot Network.
What Are Polkadot’s Best Features?
Most projects will have limited uses until they reach out to the greater blockchain community. A blockchain project would need to establish an extensive infrastructure to achieve this. Many initiatives have failed because they could not provide seamless connectivity.
Polkadot’s design, as previously stated, is intended to enable several chains at once. And its strategy has several advantages:
Because of the project’s interoperable design and chain compatibility, different Polkadot parachains and apps can share information and functionality.
Polkadot parachains can be customized to fit a specific use case or application.
There will be no need for forks to repair issues, incorporate new features, or perform essential upgrades.
Polkadot has a set of validators that can operate the various blockchains it links.
Polkadot’s substrate network allows you to design a custom blockchain easily. The ease of blockchain creation will attract more developers to participate.
Who Created Polkadot?
Polkadot was developed by Parity Technologies and managed by two former Ethereum executives, Gavin Wood and Jutta Steiner. Gavin was one of the co-founders of Ethereum, which was released in 2015. The Web3 Foundation, a closely linked organization that gives financing, advocacy, research, and collaborations to the project, also supports it.
Although it was just released in 2020, its creation started years before. Polkadot’s first code was published on Github in November 2017, signalling the start of development.
Polkadot’s first parachain was deployed in July 2018 after the company launched two proofs-of-concept in mid-2018. Polkadot went live in an “initial” stage in May 2020, with token transactions enabled in August 2020.
How Does Polkadot Work?
Polkadot is undoubtedly one of the most sophisticated cryptocurrencies available at present. You can ask crypto experts to describe its intricacies in layman’s terms. But there is no way to do so without using some extremely technical jargon.
Polkadot is more of a blockchain ecosystem. The Relay chain is the heart of the Polkadot ecosystem, and the parachains are the blockchains that connect to it. Validators on the relay chain accept blocks from all parachains, ensuring the entire network’s security.
On the other hand, parachains are self-contained blockchains that will run on top of the Relay Chain. They add chain-specific capabilities to the Polkadot network. Each parachain will serve a specific purpose in the network, such as introducing a decentralized energy industry.
Polkadot can process all of the data because the various parachains do a lot of the heavy lifting. As a result, Polkadot can operate over 1,000 transactions per second. Polkadot should become quicker if the network expands and more parachains are added, with rates reaching a million transactions.
The Polkadot has bridges to communicate with other blockchains to top it off. Bridges allow tokens to be transferred without the need for a central exchange.
The parachains, on the other hand, are self-contained, with their tokens, governance structures, and consensus methods.
Why Does the Polkadot Coin (DOT) Have Value?
The Polkadot network’s native token, DOT, is used to carry out the platform’s essential functions. DOT’s main purposes are:
People with DOT tokens gain complete power over the Polkadot governance protocols.
Adequate maintenance of the consensus mechanism is critical in the operation of the Polkadot network.
Validators who stake DOT tokens in the new parachains are rewarded for their active engagement.
DOT holders can speculate on the cryptocurrency’s price, attempting to purchase low and sell high like any other cryptocurrency. They may also decide to stake it to receive a regular dividend in the form of DOT with an annual yield ranging between 12% and 15%. Alternatively, they may utilize DOT to nominate Polkadot network validators, influencing future protocol advancements.