April 27th, 2021
1. What is Polkadot?
Polkadot, a “heterogeneous blockchain” founded by Gavin Wood, former CTO of Ethereum, is an impeccable blockchain project that is perfect in every sense.
Its founder, Gavin Wood, is the author of the Ethereum White Paper and the person who knows the defects of Ethereum at heart. Polkadot was founded with the idea to solve Ethereum’s shortcomings and replace it as the “King of the Public Chain”. (Wonder where to buy DOT?)
Before introducing Polkadot, I’d like to brief you guys on what role ETH is playing in the crypto realm.
As we all know, Satoshi Nakamoto published Bitcoin’s Whitepaper, Bitcoin, A Peer-to-Peer Electronic Cash System which marks the start of blockchain technology and the beginning of the crypto era. Blockchain technology back then was so obscure that it was difficult for ordinary teams and individuals to get involved, and it wasn’t until the launch of Ethereum that the blockchain world officially entered the 2.0 stage.
Essentially, ETH is a public chain where everyone can create and issue tokens easily. For example, Before Ethereum, on a scale of 1 to 10, if the difficulty to build a blockchain project is 10, it can be reduced to 1 using the public chain and framework of Ethereum. It is this technology that drove the frenzy of ICO (Initial Coin Offering) in 2017. Since then, projects have sprung up, which promoted the rapid development of the blockchain industry.
It is worth mentioning that DeFi, which is trending currently, is developed right on the Ethereum public chain. It’s indisputable that Ethereum at this stage deserves the title of “the King of the Public Chains”.
So we can see that the public chain is a bridge and tool linking people with blockchain projects.
However, it also has its own problem, that each public chain is completely independent of each other which hampers the exchange of data and information. People cannot directly transfer Bitcoin to the Ethereum network to participate in DeFi mining. For instance, you have to convert BTC to WBTC on the Ethereum chain before the mining. This creates a huge barrier to the flow of capital.
Imagine that without payment gateway vendors like PayPal, payment in the e-commerce industry would be very complex and expensive, and it would be difficult to create a platform other than Amazon. If Amazon was the only e-commerce platform, the entire Internet e-commerce industry would not be able to develop to such a large scale today.
Polkadot is the one that connects the public chains, bridges the divide of information flow and interaction among chains, and therefore, greatly improves the speed and security of the blockchain network.
So, let’s move on to what Polkadot is and introduce its technologies including “cross-chain”, “Slot auction” and “Heterogeneous sharding”.
2. What problem did Polkadot solve? What innovations does it offer?
i. Cross-chain Data (information, assets) Transfer
As abovementioned, DOT is currently the best technology for cross-chain asset transfer. It has a main chain called the “relay chain”, which allows several different “parallel chains” access to the relay chain in the form of “slots”, and to transfer information and assets through the relay chain to other parallel chains that have already used the slot.
Through “cross-chain” technology, we can easily transfer BTC to the ETH chain to participate in the DeFi project. At the same time, users no longer need to distinguish which chain their USDT is from, thus making trading less difficult and risky.
ii. Improve the computing speed on the chain
The slow computing speed on blockchain has always been the biggest obstacle for BTC and ETH payment. Just imagine if you have to spend a lot of time waiting for the miners on the chain to confirm the transaction when you are paying the bill in a restaurant, and you have to accept the high transaction fee premium caused by network congestion. I’m sure not many people would be willing to pay this way.
In Polkadot Network, this problem has been well solved. And one can probably claim that it this defect gave Gavin Wood the real confidence to leave Ethereum and develop Polkadot. Behind his confidence, lies the technology mentioned above — — Heterogeneous sharding structure.
In Ethereum, all information is processed and transmitted through a single chain, known as the main chain. As a result, all the information gets jammed together and you can’t get anywhere.
In Polkadot, due to the heterogeneous design of relay chain + parallel chain, all the actual operations are run in the parallel chain, which is what we call “sharding”. After transferring a lot of tasks to the sharding network, the relay chain only needs to accept one calculation result to begin its work. This frees up its storage to focus on confirming transactions and transmitting information.
This is where Polkadot’s charm comes from.
iii. Super security that can be shared
Blockchain security is based on consensus, and the stronger the consensus, the more secure the information on the chain.
We all know that blockchain is essentially a distributed ledger, and the more nodes and miners that are identified on this network, the safer the network is, because the cost of trying to manipulate it is going up.
The structure of the relay chain + parallel chain of Polkadot decides that there are many more nodes and miners on this network than the general public chain, because it is the collection of multiple public chains.
At the same time, to increase the security of governance, Polkadot designed four roles: Collator, Validators, Nominator and Fisherman.
The role of The Collator is to organize and package the data in the parallel chain and send it to the Validators for confirmation. The Validators are generated from the relay chain and need to pledge DOT, which is also one of the very important functions. Verifiers earn extra DOT by providing verification information about the city. And to ensure that verifiers don’t conspire with each other to control the network for wrongdoings. They are selected at random from The Nominators that have pledged DOT.
The Fisherman’s job is to supervise the results that The Validators are producing, and they will be rewarded with DOT if they find any dishonest results.
In this structure, Polkadot gained super security. Even projects with zero security themselves, by participating in this form of governance, can immediately share the security of Polkadot and contribute to the security mechanism.
3. How can everyday users use Polkadot? Will it keep rising?
Since its launch in 2020, Polkadot has seen a 20-fold increase, and its total market cap ranks the seventh among all cryptos. But, will everyday users stand a chance to participate in Polkadot’s project? Does it keep rising?
In my opinion, this is certainly true, because so far in the development of Polkadot, there has never been a successful case of parallel chain connecting to the relay chain. Strictly speaking, this project has not been successful. Everything has just started in fact. Its growth is beyond our imagination. Click here to trade DOT.
Last but not least, I would like to remind you that the crypto market is highly risky and any investment decision should be made with caution. All the above contents are just for your information about Polkadot and does not constitute any investment advice. After all, risk comes from not knowing what you are doing, so better Do Your Own Research.
This article is sponsored by DigiFinex: https://www.digifinex.com/
Use DigiFinex for secured trading (Click here for registration)