Hey, you guys are here to gain basic knowledge about what is Polkadot and why is it so popular. This article will impart even much more information about Polkadot. Read the article to understand.
Polkadot is one of the world’s largest cryptocurrencies that was launched in 2020 which uses a Nominated Proof of Stake consensus mechanism. The associated cryptocurrencies of Polkadot are called DOT. This cryptocurrency was introduced as part of a larger vision of a decentralized internet. Cryptocurrency wants to combine unique blockchain networks to interoperate across multiple blockchains.
This blockchain project aims to create a platform that other blockchain-based projects and applications can build on.
Let’s see how Polkadot works.
Individual blockchains within the ecosystem are termed parachains, often called parallel chains. These parachains process transactions parallel to other parachains. Transactions from the individual parachains are collected by their collators. Collators will provide a list of transactions to a set of validators.
After verifying all the transactions, validators will finalize a parallel chain block. The transaction is then submitted to the relay chain and this connects all parallel chains within the polkadot network.
A transaction will only be finalized when validators that use a nominated proof-of-stake mechanism reach a consensus over the next relay chain block.
At present relay chains are capable of providing security for 100 parachains and 10,000 parathreads.
Remarkable Projects On The Polkadot Network
Acala: Decentralized Finance Hub
Efinity: Cross-chain NFT protocol
Moonbeam: Smart contract platform
Kusama: Testing ground for polkadot
Polkadot Price Trend
Polkadot was introduced in August 2020, and since then the price has oscillated between $2.90 and $40.70. Binance, Huobi Global, and OKEx are some of the exchanges that trade Polkadot.
The Technology Behind DOT
The technology behind DOT is decentralized and designed to address several factors such as scalability, interoperability, and governance issues between blockchains. The technology consists of four layers and they are described briefly below.
- The Relay Chain
This serves as a security layer for the entire network. The main purpose of this layer is to coordinate the operation of the network, share security information between parachains, and verify transactions on the parachains.
- Parachains
Connected blockchains on Polkadot that can operate independently and are created to support various types of applications.
- Bridges
These are the connections between Polkadot and other Blockchains. Bridges gives the provision to transfer value and data between different blockchains.
- The Network Layer
This layer includes all the physical components such as nodes, data centers, and network infrastructure.
Boons and Banes of Polkadot
First, we will learn the pros of Polkadot, which includes:
- Interoperability with other blockchain networks.
- High scalability and fast transaction speeds.
- Energy-efficient system.
- Popular coin with a large market capitalization.
- Modular development model for developers.
Now we are moving on the con side of Polkadot.
- Multiple hacks in the past
- High competition from the opponent side.
- It remains to be visible if the network can live up to its hype.
Why Polkadot is Popular?
Polkadot has been termed the “Internet of Blockchains” because of its focus on connecting multiple blockchain networks. Possibility of interacting with the Polkadot ecosystem’s other blockchains. This could save money and resources as well as allow developers to get into the Polkadot community. With the help of the Polkadot, no need to start from scratch, this makes the process of invention easier.
The Unique Features of Polkadot?
- Ecosystem: Polkadot permits the creation of an ecosystem of interconnected and interacting blockchains. This created an ecosystem in return created unrestricted interoperability between all crypto assets on the Polkadot network.
- Unique Governance System: The owner of the Polkadot has the authority to determine various aspects of the network.
- Shared Security: The Polkadot network uses a shared security system and allows each blockchain to focus on its own project without being worried about security.
- Transaction Speed and Fees: Polkadot gives out the same speed and transaction fees as other PoS networks.
Sum Up
Polkadot exhibits so many features that make it appealing to developers. Polkadot is highly beneficial for individual programmers, major organizations, and small enterprises. The major usage is its ability to create specialized blockchains to fulfill particular purposes and modify them. This young ecology has built hundreds of projects that range from wallets to infrastructure projects, DApps, tools, and others.