22 September 2021: Considered an alternative to Ethereum alongside other networks like Cardano and Algorand, Polkadot (DOT) was founded by yet another Ethereum co-founder in Gavin Wood and funded by the Web3 Foundation. Polkadot is described as a next-gen blockchain protocol that enables undoubted functionality & scalability between an entire network of blockchains. This article will offer a look in the heart of Polkadot, recent developments, and price action of the up & coming network.
Introduction to Polkadot (DOT)
One thing that Polkadot is already hitting on is the mutli-blockchain landscape that is undoubtedly spawning within the rising decentralization movement. To better situate Polkadot over other blockchains, the network has employed a shared-chain model in which the Polkadot network is created through the connections between many blockchains with interoperability - allowing those on the network to enjoy freedom of features across blockchains. This model allows all connected blockchains to process transactions together and ensure security through the exchange of data.
Polkadot is already providing an answer to a growing question within the cryptoeconomy - will a network like Ethereum, a single chain, end up as the long term winner, or will many different blockchains all find a niche and specialize within a greater space? Polkadot is going with the latter. As a sharded network, Polkadot is able to provide the latest innovations and improvements across many different blockchains - all the while being more scalable then competitors.
What to Know
- Polkadot operates through its native token $DOT
- Polkadot is a network that is made up of many different blockchains, all interoperable
- $DOT holders own / run the network and can receive incentives through governance, staking, and bonding.
Polkadot is extremely innovative and a step ahead of similar networks in scalability and interoperability between many chains. Additionally, Polkadot has the ability to bridge to outside blockchain networks like Ethereum, ensuring Polkadot network users always have connectivity to the rest of the cryptoeconomy.
Recent Developments
The last core mechanic of the Polkadot network is currently being rolled out - parachains. The introduction of parachains into the ecosystem is precisely what allows Polkadot to achieve scalable, multi-chain, interoperable network. This means that Polkadot is about to reach core functionality - a little over a year after the genesis block was officially launched in May of 2020. Right now, the rollout of the Kusama network will serve as a test ground for radically innovative new parachains - allowing the community to see various network effects of different features and chains prior to becoming part of the Polkadot ecosystem.
Learn more about Kusama here.
Price Action
Polkadot spent much of its first year in the space modestly quiet compared to today. Back in December of 2020 the price of DOT exploded, bringing in a gain of over 700% in around 2 months time. DOT eventually found an all time high back in May of 2021 prior to the large market correction of approximately $48. Currently, DOT sits at $31 after multiple volatile trading sessions in the past few days.
Polkadot's long term chart history is shown below:
In the last few weeks, Polkadot has been on a rally, moving up off the lows of the previous correction nearly 250% before the recent pullback. In fact, it appears the breakdown in technicals of most coins in the market has been a false breakdown. Prices of many assets - Polkadot included - have bounced back above their respective 50 day moving averages. Thus, the probability of a continued breakout is looking enticing.
Polkadot's recent price action is shown below:
Summary
Polkadot's entire functionality is based upon the coherent interoperability of multiple blockchains under a single network. In doing so, Polkadot has set itself up to be highly innovative, scalable, and secure. It is important to note that Polkadot was created under the direction of Ethereum co-founder Gavin Wood. The ability for Polkadot to have multiple chains within the network while also being able to bridge with outside networks allows Polkadot users to have the maximum possible network connectivity available within the crypto space.
Polkadot is a strong project and offers another formidable competitor to the Ethereum blockchain. While no one can tell the future, as many new, innovative blockchain projects are launched, it does appear that the development of the space points towards interoperability between many blockchains rather than any distinct winners. Therefore, Polkadot is on the forefront of the direction of the crypto space and could be a worthy addition to portfolios being established with a long term outlook.
Top Polkadot Resources
- Polkadot Website
- Whitepaper
- Lightpaper (non-technical)
- Polkadot Roadmap
Polkadot's native token DOT is available on most major cryptocurrency exchanges
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