What is Polkadot (DOT)?
Launched in May 2020, Polkadot (DOT) is an improved version of Ethereum. It is a brainchild of Ethereum which is co-founded by Gavin Wood. Now, the platform is running by the Web3 Foundation and developed by the Parity Technologies which are both co-founded by Wood.
Polkadot operates at the deeper level than a blockchain like Ethereum (ETH)- think of it as providing the foundation which others crypto projects can build. It calls itself a Layer O blockchain, Whereas other blockchains like Cardano (ADA) and Solana (SOL) are called Layer 1 blockchains.
Facts about Polkadot (DOT)
- Polkadot was released into the market with an Initial coin offerings (ICO) in 2017.
- It is highly scalable because of the several chains running parallel to main chain.
- At first, 10 million Polkadots were produced on the Ethereum platform.
- The DOT project is developed and supported by Parity technology and Web3 foundation.
- Polkadot lost nearly 60% of the funds raised in the initial coin offerings. Due to the vulnerability within the ETH blockchain in 2017.
How does Polkadot work?
It allows the funds to be sent from one wallet to another, using the system of private and public key cryptography. The hash of public key is the address you give out to receive funds and private key acts like a code which is authorizing and broadcasting transactions to the network. Every six seconds approx., these pending transactions are confirmed in block of transactions and together blocks form the Polkadot blockchain.
Polkadot offers much more than sending and receiving of funds. It is a shared multi chain network, coordinated by the central relay chain which allow to process transactions and data on several chains in parallel, known as the Parachains. Its split architecture breaks up the network into shards. This process increases the throughput of transactions by permitting them to be processed in parallel on each shard alternatively sequentially across the whole network like the older generation blockchains.
How to use Polkadot?
Polkadot offers various benefits for different individuals and entities. It allows an alternative, a decentralized method of payment outside of the interface of intercessor, providing more control over the money.
It can also be used for investment and speculation, or as an alternative to slow and expensive international transfers. DOT can also contribute to an alternative financial system for the millions of person that have the access to the smartphones but not a bank account.
Future of Polkadot
Many people see Polkadot as one of the most promising networks of future, as it is attempting to lay foundation for a multitude of purposes. While the project is still in its early years, many developments indicates that the path it has laid out could be the standard for the value exchange.
Polkadot can process an estimated 1,000 transactions per second. Potential upper limit for the polkadot’s transactions throughput is 1 million transactions per second.
Frequently Asked Questions (FAQ)s
Is Polkadot a good investment?
Like any other cryptocurrency, Polkadot also experiences price fluctuations. This makes Polkadot a risky investment. It is advisable to talk to a financial advisor familiar with cryptocurrency to find out.
What problems does Polkadot solve?
The two main issues blockchain -based systems most need to solve are scalability and governance. Polkadot aims to solve both of these issues.
Does Polkadot have cryptocurrency?
Yes, DOT, internal token of Polkadot network. This allows the holders to vote on the potential code changes, which then automatically upgraded across the network if the consensus is reached.
What is the main goal of Polkadot?
It is a software that seeks to incentivize the global network of computers to operate the blockchain on the top of which users can operate and launch their own blockchains.
Is Polkadot Decentralized?
Yes, Polkadot has a decentralized version of wrapped Bitcoin.
Polkadot’s design introduces a multi-chain network, solving high fees and scalability issues which makes difficulties for earlier generations of blockchain technology without sacrificing decentralization or security.
Polkadot’s next generation blockchain is capable of delivering a fully decentralized web, controlled by its user base of NPoS consensus, 0n-chain governance, incentivized stakeholders. It connects the private chains, oracles, public networks and applications, erupting new use cases using pooled security, parallel processing, cross-chain messaging, bridged connectivity, compatible frameworks.