Carefully! Lots of text.
Polkadot bills itself as a next-generation blockchain protocol capable of connecting multiple specialized chains into one universal network. Polkadot was founded by the Web3 Foundation. Its goal is to create the infrastructure for Web 3.0, break the monopoly on the Internet and empower individual users.
Introduction
Blockchains have been around since the advent of Bitcoin. This is an innovative technology and has some disadvantages that should be considered. For example, individual blockchains cannot communicate with each other. Introducing interoperability between different chains will help make data exchange more efficient, which will ultimately lead to the creation of more powerful applications and services.
Developers have already attempted to “link” blockchains so that Chain A can work with Chain B and vice versa. However, connecting many (hundreds or thousands) of blockchains at the same time is still a pressing problem. The Polkadot team and the Web3 Foundation are confident that a better solution will be found in the coming years.
What is Polkadot?
Polkadot is an open-source protocol that marks another important milestone in the evolution of blockchain technology. The concept was proposed by Dr. Gavin Wood, co-founder of Ethereum. His team focused on security, scalability and innovation. Their challenge was to create an infrastructure in which new ideas and concepts could be supported and interact freely.
A separate blockchain in the Polkadot ecosystem is called a parachain (parallel blockchain), and the main chain is called a Relay Chain. The idea is that parachains and relay chains should be able to freely exchange information at any time. Parachains here can be thought of as separate shards in the upcoming implementation of ETH 2.0.
Any developer, company or individual can deploy their own parachain using Substrate, a platform for creating cryptocurrencies and decentralized systems. Once a user chain is connected to the Polkadot network, it becomes compatible with all parachains on that network.
The creation of cross-chain applications, products and services should be greatly simplified thanks to this development, since transferring data and assets between blockchains in large volumes was previously impossible in principle.
Data protection and verification in various parachains is carried out by network validators. They ensure that transactions are distributed across multiple parachains to improve scalability.
Benefits of Polkadot
There are many aspects to Polkadot that attract developers. Due to the limitations of modern blockchains, several major challenges remain unresolved: scaling, customization, interoperability, governance, and upgradeability.
Polkadot is also expanding its scalability. This protocol acts as a multi-chain network, allowing transactions to be processed in parallel across separate chains. In this way, the network can eliminate many of the obstacles associated with blockchain technology. Parallel processing is a significant improvement and another step towards wider adoption of blockchain throughout the world.
Polkadot opens up a wide range of customization options for those who need to tailor the work process to specific goals. At the moment, there is no single blockchain infrastructure for governance. Each project has its own individual needs, and Polkadot allows you to optimize the design of each individual chain according to the specifics of its functions. With Substrate, developers can effectively tailor their chains to the needs of the project.
When it comes to compatibility, the ability to seamlessly exchange data between projects and applications is of great importance. It remains to be seen what type of products or services will emerge as a result, but there are many use cases for it. In the future, we may witness a completely new financial ecosystem in which each individual parachain is responsible for one specific aspect.
The community of each parachain needs the ability to freely manage its network. These communities are critical to the future governance of Polkadot as a whole: feedback from community members is valuable information for the development of projects in the future.
Additionally, Polkadot makes it easy to update individual parachains. By eliminating the need for hard forks and the threat of splitting communities, this project makes it possible to seamlessly update your own chains.
What is a DOT token
Like most other blockchain infrastructure projects, Polkadot has its own DOT token. It serves as a network token, similar to ETH for Ethereum or BTC for Bitcoin.
The token has wide functionality. First of all, it gives its holders the right to control the entire Polkadot platform: determining network fees, voting on network updates, deploying or deleting parachains.
DOT also allows for network consensus to be achieved through staking. As with other staking networks, all DOT holders have an interest in maintaining the security and reliability of the network. Why? Because otherwise they may lose their staking assets.
The third option is to use DOT for binding. DOT linking is required when adding new parachains to the Polkadot ecosystem. During the bonding period, the connected DOT is locked until the bonding period expires and the parachain is removed from the ecosystem.
Staking and Linking on Polkadot
Polkadot's approach to collaboration goes far beyond the simple exchange of data and assets. It also allows for the introduction of new concepts such as fair token staking and fair token binding.
Placing tokens on a blockchain network is not a new concept. This consensus model, known as Proof of Stake (PoS), rewards users for staking coins on the network. In Polkadot, users who stake honestly receive rewards, while attackers can lose all their funds.
As we have already said, each new parachain is added by linking DOT tokens. Pairing means sending tokens to the network for a certain period of time. Unused chains and projects that are no longer supported will be deleted and the tokens associated with them will be returned to their owners.
Summary
There are many aspects that attract developers to Polkadot. The ecosystem is capable of serving individual developers, small businesses, and large corporations. The ability to deploy and easily update custom blockchains to suit their specific needs is a new concept that could benefit the entire crypto space.
At the same time, Polkadot remains a fairly young ecosystem. While many projects may already be in the works, they take time to get off the ground. According to the PolkaProject, there are hundreds of projects currently in development - from wallets to infrastructure projects, tools, DApps and much more.
As for DOT, the creators of Polkadot claim that the token is not intended for speculation. And although it has a certain monetary value on exchanges, first of all, this token is intended to fulfill the purposes mentioned above.
Do you still have questions about Polkadot and blockchain? Visit our Q&A Ask Academy platform where the Binance community will answer you.
