Hello everybody and welcome back in this third token review of my new “Easy & Short Cryptocurrencies Made Accessible” area. Today I will introduce Polkadot to you.
Polkadot is a revolutionary blockchain infrastructure designed to enable the next generation of Web where users control their own data and identity. It creates this infrastructure by providing a way to connect different and independent blockchains together in a single network, allowing them to interoperate, exchange data, and process transactions with the benefit of shared security provided by the Polkadot Relay Chain. It also allows interaction with non-blockchain systems and established blockchains such as Bitcoin and Ethereum.
Founded by some of the main figures in the sector, around the project we find Gavin Wood, co-founder and CTO of Ethereum as well as developer of the most famous language for Smart Contract Solidity, and Peter Czaban, technological director of the Web3 Foundation. Polkadot is therefore not one of the many new projects in the crypto sphere but it is one of the protocols that aims to solve one of the biggest problems of cryptography, namely scalability.
Polkadot team proposed a solution: create parallel chains capable of communicating with each other to avoid clogging a single chain of blocks. These chains are called Parachain and have different characteristics from each other: the computation of transactions is distributed among the various Parachains, allowing a large number of them to be processed very quickly.
Let’s talk about DOT!
DOT is the internal token of the Polkadot network. This token allows users to vote on potential code changes, which then automatically update across the network if a consensus is reached.
Polkadot currently has an allocation of 1 billion DOT tokens, following the network’s renaming from an initial maximum supply of 10 million in August 2020. The renaming was undertaken purely to avoid the use of small decimals and make calculation easier. While all balances were increased by a factor of one hundred, this did not impact the distribution of DOT or holders ’proportional share.
One of the most interesting features of Polkadot is the ability to transfer any type of data on public, open and authorization-free Blockchains, as well as on private (or DLT) Blockchains through authorization. This therefore makes it possible to develop applications that obtain data from DLT and use them on public Blockchains capable of demonstrating the certainty of the data but not the data itself.
Polkadot, at an operational level, is made up of 3 fundamental parts:
- Relay Chain
- Parachain
- Bridges
I do not want to stop too long to explain these points at the moment, in the second article dedicated to Polkadot, which I will publish next week, I will go on to explain in detail these terminologies and many other technical curiosities.
So keep following me to stay updated!
Another very important point to fully understand Polkadot is represented by the consensus rules to manage the huge amount of data that the protocol has to deal with. Here too there are different types of "nodes", each with a specific task:
- Nominators
- Validators
- Fisherman
- Collators
Specification of these peculiarities will be deeply explained in the next article. Be sure to follow the “E&S Cryptocurrencies Made Accessible” section!
Polkadot plays the role of guarantor in the world of Blockchains involved in the network, allowing transactions to be carried out safely, cross-chain and with high stability.
In addition to having a complex consensus algorithm and not simple operation at first glance, this digital currency also has tokens useful for staking and for the security of the protocol.
If you want to know more about staking, I recently published an article dedicated to TRX staking that allows me to receive a 11% annualized yield, and another one for ALGO staking that gives me a 8% annualized yield.
You can find the articles with video tutorial dedicated here:
The Polkadot network and cryptocurrency looks to be a rising star in the cryptocurrency industry.
Have you some DOT token in your crypto portfolio? What do you think about this project?
Let me know your opinion in a comment below and keep following me to find out the next coin I’m going to analyze!
