If you’re not familiar with the emerging blockchain projects, you may be wondering what is Polkadot. Polkadot is a blockchain that aims to create a secure interconnection infrastructure between different blockchains, providing them with scalability and new functionality. It also seeks to take the Ethereum’s spot as most used blockchain and aims to do that by being more scalable and efficient. But Polkadot also has its own native cryptocurrency called DOT, used on the blockchain and seemingly an asset with good potential.
If that description got you curious, you can find out what is Polkadot and moreinformation about the blockchain and its crypto in our article.
What Is Polkadot?
If you consult with its website about what is Polkadot, you’ll learn that it’s a network protocol that allows arbitrary data to be transferred across blockchains. That includes tokens but isn’t limited to, which is one thing that makes the blockchain unique. Polkadot is a true multi-chain application environment where cross-chain registries and cross-chain computation are possible and it works with both public and private blockchains. The DOT token serves in three ways on the network: for staking, bonding, and governance over the network.
If you’re curious to learn more in-depth information about this project, though, we’ll provide it in the following paragraphs.
What Is Polkadot’s History?
In 2016 the whitepaper of the Polkadot project was presented to the world by Gavin Wood. He’s the leading force behind this project and in the past worked in Ethereum. Using the Parity company and the Web3 Foundation, Wood initiated an ICO for Polkadot in 2017 and gathered $143 million for the development of the project. After leaving the second-largest crypto’s team, Wood had the idea to create a blockchain project capable of overcoming Ethereum’s weaknesses. In particular, its scalability and the enabling of new cross-chain or inter-chain operational structures. That’s how what is Polkadot today was born. Along with Robert Habermeier, Peter Czaban, and a team of other developers, this blockchain began to gain speed in 2020 and in 2021 became one of the biggest new projects on the market. Around the same time the price of the DOT token also increased. All of this attracted investors’ attention to the whole project.
Screenshot from the Polkadot website, talking about the uses of the DOT cryptocurrency
What Is Polkadot’s Technology?
Polkadot was designed with heterogeneous network operation in mind, which could be interconnected. In this way, Polkadot could perform two well-defined functions: work as a chain of data transmissions and processing, and conduct independent operations that creates its own chains.
In the first case, when Polkadot acts as a chain of data transmission, you can receive information from other chains, process that information, and send it back to the source chain. This option allows Polkadot to become a scalable tier for any other blockchain that needs it.
The second use of Polkadot allows you to run smart contracts or create tokens on it. This means the network provides space for decentralized apps (dApps) and tokens, bringing the full potential of the blockchain. It’s important to note that you can’t do that directly on Polkadot. However, using the parachains on Polkadot, extensible and modular, having the ability to create layers of abstraction that allow these smart contracts to run. When run inside a parachain, their impact is limited in terms of resource consumption, to that parachain, leaving the rest of the system to function normally.
Combining the two functions allows Polkadot become a scaling option for networks like Ethereum or others. cryptocurrencies. It could also serve to interconnect different ecosystems in different blockchains, all on the same network.
What Is Polkadot’s Consensus Mechanism?
Polkadot works with a mechanism called NPoS – Proof-of-Stake named. This is a slight variation of the popular Proof-of-Stake protocol, used by cryptocurrencies like Avalanche and Cardano. Here DOT is ahead of Ethereum, as ETH is just now trying to migrate to PoS and DOT is even using an advanced version of this mechanism.
What Is Polkadot’s Network Organization?
The Polkadot network has a unique organization in which four elements stand out. Those are:
⚪ Validators: Their task is to verify, validate and inform the network about the information contained within each block that is part of the blockchain.
⚪ Nominators: They are in charge of creating the candidate block that will be analyzed and validated by the validators. They create a secure link between validators and the whole process of network operation.
⚪ Classifiers: They help validators to keep a complete history of the parachain (Polkadot substring) they have been assigned to.
⚪ Fishermen: Polkadot works in sharding, meaning several substrings are part of a more complete story, an infrastructure has been created designed to prevent malicious actors from cheating. Fishermen look for duplicate transactions or illegal operations within the network, to avoid them, in exchange for a reward.
What Is Polkadot Crypto’s Purpose?
Having learned how the Polkadot network works, you may be wondering what is Polkadot’s crypto DOT role in the whole system.
The token has a few purposes. It serves for the decentralized governance of the protocol. This means that DOT allows validators to have voting power with which they can participate in making decisions for the protocol’s future.
The crypto serves to connect and incentivize validators to act honestly within the network. This has a financial stake in the authenticity of the verification process. Even the parachains or Polkadot substrings can be created, joined or destroyed using the Polkadot crypto.
What Is Polkadot Going to Be Used for in the Future?
Now that you know what is Polkadot – a new unique blockchain and a native cryptocurrency, you may be wondering what will be the future of the project. The price of the DOT token and the popularity of the network grew considerably in 2021. This brought the attention of the crypto community to the project and made investors interested in them. If the team behind Polkadot continues to expand it, it’s possible that it can become a valuable Ethereum alternative very soon. This can prompt more people to use the native token DOT as well, pushing its price once again up. The crypto community is looking forward to the Ethereum upgrade but that keeps moving forward in time. Until ETH moves to Proof-of-Stake, Polkadot could have evolved significantly since it already uses more advanced technology than older cryptos.
This is certainly a project with a big potential, judging by the team behind it and its fundamentals. The only thing left for the community is to watch how time will treat the Polkadot network and its token. Maybe in a few years nobody will be wondering what is Polkadot once its adoption has grown tremendously? That’d be the best-case scenario for all supporters of this blockchain and coin.
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