Blockchain technology has been in existence since the time of Bitcoin. While it is often referred to as revolutionary technological advancement, it has some disadvantages to take into consideration. Blockchains on their own are not able to communicate with one another. Implementing an interoperability between various chains could result in the exchange of data and ultimately , more powerful software and products.
Developers have attempted in the past to “bridge” blockchains in the past. By doing this, chain A is able to interact with chain B, and reverse. However, connecting multiple (think hundreds or even thousands) blockchains simultaneously is an problem. The Polkadot team, and in turn Web3 Foundation, Web3 Foundation, is confident that a streamlined solution will be developed over the next years.
What is Polkadot?
It is described as an open-source platform that is designed to be accessible to everyone Polkadot is an important step forward in the advancement in blockchain technologies. It was initially thought of in the mind of the Dr. Gavin Wood, co-founder of Ethereum. The company wants to concentrate the company’s efforts to ensure security, scale and innovating. To achieve this the required infrastructure has to be built in order to not just support new ideas and concepts, but as well ensure that the adequate interoperability can be made.
A blockchain that is part of the Polkadot ecosystem is known as the parachain (parallel blockchain) and its main counterpart is referred to as Relay Chain. Relay Chain. Parachains as well as the Relay Chain are able to swap information in all time. Parachains could be thought of as being like individual shards for the proposed implementation of Ethereum 2.0.
Anyone, whether a company or person can create their own custom parachain with Substrate an application framework that allows creating decentralized and cryptocurrency-based systems. When the custom chain is joined with the Polkadot network, it will become fully compatible with the other parachains that are part of the network.
The development of cross-chain products, applications and services will be a lot easier by using this approach. Cross-blockchain transfer of assets or data haven’t been possible on a huge scale prior to.
The process of securing and validating data across different parachains is accomplished by network validators. A smaller set of validators can protect multiple parachains. Validators also guarantee transactions are spread across several parachains, which will improve the scalability.
The advantages of Polkadot
There are many motives to encourage developers to look into this Polkadot ecosystem. Because of the insular nature of the current blockchains It is clear that there are some fundamental issues to be addressed including scaling, customization interoperability and governance, as well as the possibility of upgrading.
In terms of scaling it checks a variety of boxes. It is an interchain network that allows it to process transactions in parallel across various individual chains. This eliminates one of the major obstacles that blockchain technology faces currently. Parallel processing is a major advancement and could open the door to broader global adoption of blockchain.
Users who are looking for customization may also benefit from other features offered by Polkadot. At present there isn’t “one blockchain infrastructure to rule them all”. Each project has its own requirements and needs and Polkadot lets every chain to be specifically designed for the function it is intended to provide. With Substrate’s help Substrate developers can easily modify their own chains to fit the specific requirements for the particular project.
In the realm of interoperability the ability of applications and projects to communicate with each other seamlessly is a major aspect. Although it is yet to be determined what kind of services and products that this could bring about it is possible to imagine a variety of scenarios. It could create a completely new financial system and each of the parachains managing one aspect at an time.
Any community that is part of the specific parachain is able to manage their network in the way they wish. Additionally each community is essential to the future management of Polkadot as the whole. Collecting feedback from the communities can provide valuable insight that change projects over time.
Additionally, Polkadot makes it very easy to update each parachain. There’s no need to use rigid forks because this could cause communities to split. Instead, the chain is able to be improved into an unidirectional mannequin
The DOT token explained
Similar to most other blockchain infrastructure projects, Polkadot has its own native token. Known as DOT, it serves as the network token, just like ETH is the token for Ethereum and BTC is the token of Bitcoin.
Several use cases exist for this token. First of all, it grants token holders with governance rights of the entire Polkadot platform. This includes determining network fees, voting on overall network upgrades, and the deployment or removal of parachains.
DOT is also designed to facilitate network consensus through staking. Similar to other networks that involve staking, all DOT holders are incentivized to play by the rules at all times. How come? Well, if they don’t, they could lose their stake.
The third option is to use DOT for bonding. This is required when new parachains are added to the Polkadot ecosystem. During a bonding period, the bonded DOT is locked. It’s released once the bond duration has ended and the parachain is removed from the ecosystem.
Bonding and staking on Polkadot
Polkadot’s interoperability strategy is more than just the exchange of information and assets. It’s also a method to introduce new ideas that encourage authentic token staking and bonding tokens.
Staking tokens on blockchain networks is not a new idea. It is known by the name of the Proof of Stake (PoS), this consensus model rewards the users who take part in staking money on the networks. With Polkadot an honest staker is awarded, while those who commit fraud are liable to lose the entire stake.
As we’ve said, every new parachain is built through bonding tokens known as DOT. Bonding is the act of the committing of tokens to the network for a certain amount of time. Chains that don’t work or projects that have been abandoned or not maintained will be removed and the tokens they bonded are will be returned.
On paper, there are many things that can make Polkadot attractive to developers. It’s an ecosystem capable of catering to individual coders, as well as small businesses and large corporations. Being able to deploy custom blockchains to suit specific needs, and upgrade them without hassle is a novel concept that could be valuable for the entire crypto space.That being said, Polkadot remains a very young ecosystem. While dozens of projects may be under development, it will take some time until the first big projects launch. According to PolkaProject, there are hundreds of projects being developed, spanning from wallets to infrastructure projects, tooling, DApps, and more.
As far as DOT is concerned, the Polkadot creators have claimed this is not a token designed for speculation. Although it has a monetary value on exchanges, it’s primarily designed for the purposes outlined above.
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