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All You Need To Know About Polkadot

BitForex Editor
Mar 05, 2021

The concept of Polkadot is one that has been under the radar since the initial startup of the project over three years ago. Its official release has managed to shake the cryptocurrency space as its native DOT token skyrocketed its way into the top ten cryptocurrencies based on market capitalization.

Polkadot has often been described by many names as some have labeled it as the Ethereum killer cryptocurrency. Though its founder continues to insist that Polkadot is in no way a competitor to Ethereum, a close-up look suggests that Polkadot is not only a serious competitor with Ethereum, but, with time, it is capable of becoming that cryptocurrency that may transform the crypto world.

Origins Of Polkadot

Polkadot's history or origin revolves around Ethereum and most especially one of the cofounders of Ethereum, Dr.Gavin Wood, who has had many years of experience working as a software developer within and outside of the crypto space. Dr. Wood is known for coding the first functional version of Ethereum; he is also popularly known for creating the coding language used in building smart contracts on Ethereum.

In 2016, Dr. Wood resigned from his position as Ethereum's core developer and CTO for reasons which are not precisely known. In that same year, he began developing a new cryptocurrency that aimed to deliver on the promises that Ethereum could not fulfill. By the end of 2016, the first draft of Polkadot's white paper was completed. While it is necessary to further expatiate on its origins and the reason for why the platform has being able to garner new support since its inception, it is first of all essential to understand what Polkadot is all about.

What is Polkadot (DOT)?

Polkadot is the name given to a cryptocurrency project aiming to power the decentralized future of the internet. It is also interoperable with various other blockchains within and outside of cryptocurrency; it provides the opportunity to create new blockchains, tokens, and smart contracts; it also allows for the possibility of blockchains to exchange information. It is easily upgradeable, no hard forks, and the protocol is overseen by only those who hold DOT, which is the name given to Polkadot's native cryptocurrency

Polkadot is a project that was established by the Web3 Foundation, which is a Swiss non-profit based in Switzerland's Crypto Valley. U.K based Parity Technologies was commissioned by the Web3 Foundation to develop and maintain the Polkadot network.

How Does Polkadot Work?

There is a reason why Polkadot is somewhat referred to as easily one of the most complicated cryptocurrencies in existence. Though we would generally say that it can be easily explained in layman's terms, but in the real sense, there is really no way of explaining Polkadot without eventually including a fissure of technical language.

Polkadot, at a glance, is basically an ecosystem of blockchains. The "Relay Chain" is the name given to the core Polkadot blockchain. The Parachains is the name given to blockchains that are fused to the Relay Chain.

The Relay Chain is usually built using "Substrate," and it is necessary to understand that any Parachains created using the Substrate are capable of easily connecting to the Relay Chain. However, any "external" blockchains like Ethereum or Bitcoin will need a bridge to connect to the Relay Chain. The Polkadot network makes use of hybrid consensus mechanisms. The Relay Chain consensus is a version of Proof of Stake (POS) referred to as Ghost-Based Recursive Ancestor Deriving Prefix Agreement (GRANPA).

Parachains connected to the Relay Chain make use of a version of PoW (Proof of Work) known as Blind Assignment for Blockchain Extension (BABE). There are four key players involved in Polkadot's hybrid consensus: Fishermen, Validators, Nominators, and Collators.

Polkadot Validators

Polkadot validators are tasked with checking parachains transactions as well as including them in the Relay Chain blockchain. For validators to be eligible for nomination as a validator on the network, they must stake DOT. This is one of the reasons why Polkadot's PoS consensus is also called Nominated Proof of Stake. Basically, the job of a validator is to secure the relay chain, which they carry out by validating proof from collators, staking dots as well as participating in consensus with the other validators present on the network.

Polkadot Nominators

The job of the nominators is to select validators, which they do by voting. Nominators are capable of nominating a certain number of validators, and they collect from the block rewards earned by these validators.

Polkadot Collators

The collators are tasked with maintaining shards, which they do by collecting shard transactions from users. Once they collect the information, the collators will then produce proofs for the validators.

Polkadot Fishermen

The Polkadot network makes use of a particular monitoring protocol called Fishermen. These nodes are responsible for monitoring the network as well as reporting bad behavior to validators. Also, within the Polkadot, the Collators, as well as any parachain full node, is capable of performing the fishermen role.

Advantages Of Polkadot

The Polkadot project is aimed at revolutionizing blockchain technology by providing a bridge-like framework that offers the following benefits.

Limitless Scalability

Polkadot is capable of supporting a vast number of blockchains as well as providing them with the opportunity to connect.

Cross-Chain Transactions

The framework is also able to support the transfer of value between various blockchains. It is essential for proper integration and interoperability.

Upgradeability

The Polkadot project supports upgrade without the need of resorting to drastic hard forks in other to implement.

Low transaction fees

Compared to Ethereum, Polkadot boasts of having a more reduced transaction fee.

DeFined Governance Mechanism

Polkadot has a well-DeFined governance mechanism which removes a significant problem faced by other blockchains.

There is no doubt that Polkadot is quickly gaining traction on the broader crypto community as well as the DeFi Space. Due to its wide composability, available grants, and easy integration, the Polkadot project is easily gaining value. One can confidently say that as the ecosystem continues to mature, it is DeFinitely going to become an integral aspect of smart contracts and blockchain field platforms.

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