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What is Polkadot (DOT)?

BitForex Editor
Sep 07, 2020

Type polkadot.network into your browser, Enter. The bold text that greets your sight reads, “POLKADOT IS LIVE.” And truly it is live. This a new innovation crypto whose development is still ongoing.

First, the Polkadot crypto was upcoming, Then, it was running but not available for trading. It became available for trading in 2019. Next, the cryptocurrency was employing the bulls aggressively and surging up the market raising eyebrows — We are talking about at some point becoming the tenth largest cryptocurrency by Marketcap.

All these and more are reasons why the cryptocurrency has raised a few eyebrows. The Polkadot has incredible features to offer to anybody who is trading cryptocurrencies or genuinely hoping to use them for their transactions. It uses advanced digital technology which is no wonder why it has become a huge success since becoming available in 2019.

Apparently, the network employs good organization and planning which seem very key to its recent success. This network has a roadmap that has been judiciously following through up till now.

Meanwhile, the system prides itself on the fact that its control lies almost totally in the hands of the token holders. Presently it's past a phase and advancing on to the next. The just-concluded phase of the currency now allows the token holder to transfer balance.

The uniqueness of this new crypto cannot be over flogged. Wait till you get to know all the benefits of using the DOT.

In this piece, you will get to know all about Polkadot and some major events that have trailed the crypto in its rise from nothing to what it is today.

What is Polkadot?

Polkadot is a multi-chain network, an open-source project by Web3 Foundation. And it's major component Parachains are written using the Web3 technology stack. Being muti-chain means that the platform will incorporate other blockchains in its operations fluidly. There are three major areas that the operations of Polkadot highlight. They are:

1.Scalability

2.Interoperability

3.Shared security

The Interoperability of Polkadot

Meanwhile, rather than blockchains, the framework relies on parachains. From the sound of it, these parachains seem to be smaller entities when compared to blockchains. However, parachains can be blockchains, and the former opinion is very divergent from reality.

Platforms like Bitcoin, Ethereum, and Zcash run the blockchain where transactions are done in sequence, creating a potential problem which is a waste of time. Bu the way the polkadot parachains function might blow your mind.

Now hear the wonders of parachains; say there are 5 parachains. A system can perform 5 times the usual work in a system. Apparently, the para in parachains means parallel. And contrary to the sequential mode of function in a blockchain, more can be done within a system making use of parachains.

So with parachains, there are effective relations with other blockchains hereby making the framework platform highly interoperable.

Somehow, with its operations, chains with permission in the system can isolate themselves while they transfer data to other chains. This gives an idea of the extent of the platform’s security even in its flexible operations with other blockchains.

Now, this isolation is made possible with the existence of the so-called relay chains. So, you might wonder what relay chains are? To understand the relay chain and its functions or role in the isolation will do. To leverage a strong security parachains do not attach to security on their own. They use relay chains for that, securing the passage of message between them.

It now obvious that the basis of the Polkadot framework is its parachains. These parachains have another highly effective use in the system; their scalability.

Scalability

The scalability of the Polkadot crypto allows a network of numerous transactions that does not overload the root relay chain regardless. This means that the power chains in polka-dot should allow it to perform at a much optimal level compared to the traditional blockchain.

Scalability is one of the issues facing the majority of the blockchain currently. Polkadot is trying to beat the odds and reduce this problem of scalability. In essence, when one creates a parachain, it can have its own parachain. It goes on and on like that.  

To bolster the security of the framework Polkadot adopts GRANDPA, a formidable consensus algorithm.

Polkadot Concepts 

On the Polkadot framework, the DOT tokens are involved in three specific ways

1.Governance

2.Staking

3.and Bonding

When it comes to governance, the system is bent in giving superior privileges to token holders and they determine the direction of the Polkadot project as claimed. Hence, the governance in the system is a transparent one. Even protocol upgrades and fixes are run by token holders. Unlike the mode of operation in other blockchains, the privileges of miners are also allocated to token holders in polkadot.

In staking DOT, the system will not tolerate mischievous actions. Hence, there are rewards for holders with good conduct and penalties otherwise. While there are incentives to staking, as usual, holders with dishonest practice will run the risk of losing their stake.

Bonding is a form of proof of stake. The system removes redundant and outdated parachains. While new ones are added by bonding tokens.

Unique feature

Due to Interoperability, you can deposit BTC into the exchange using zero-knowledge proofs (ZKP'S). This Polkadot interaction with other blockchains is called forming the bridges. Even though frameworks of blockchains like Ethereum have their own consensus, Polkadot can still interact with them.

Latest Event

Around when Polkadot was going through its second to the last phase according to its road map, in the latter days of August, something happened. This phase involved the ability to transfer balances on the network. And a new token was adopted which by all indications happened after an upvote form the Polkadot community. The aftermath of the decision is that now, there is an old DOT, which is no longer functional, and a new DOT which is about 1/100 of the old DOT. Currently, the new DOT is equal to about $6 and still looking bullish.

Polkadot is built for everyone and by a collection of foremost groups around the world. The operation of the system seems to rely heavily on the function of parachains that could make bulky transactions faster, without the adverse effect of stress on the system. The idea of relay chains also makes the system secure. By all indications, this is the current next level of digital currency technology.

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