Polkadot is a unique blockchain network that allows the users to create their own blockchains. Essentially, it is trying to create a network of blockchains that are connected and interoperable. The goal is to create interoperability among blockchain networks. The network utilizes proof of stake algorithm and has been very successful.
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Content
- Polkadot the Young
- How the Polkadot Network Functions
- Blocks and Chains Everywhere
- Polkadot Bridge
- The Blockchain Trilemma
- DOT Coin
- Buy and Sell Polkadot on HiExchange
Polkadot the Young
Initially found in 2016 and launched in 2020, Polkadot is another one of those cases where an Ethereum co-founder decided to walk down the road not taken. And much like ADA, Gavin Wood was able to make waves in the industry with a revolutionary innovation. As of October 2021, Polkadot Coin is the 7th cryptocurrency by market cap, priced at $42. Considering the very young age, Polkadot has deep roots in the industry as a serious blockchain network. In a time period of less than two years, the network has fulfilled all of the advertised promises and is delivering astonishing results.
How the Polkadot Network Functions
Blockchain networks such as Ethereum allow the users to create their decentralized applications. Polkadot however, takes it a step further by allowing users to create their own blockchain network on the main network. This allows for the new blockchain to take advantage of the already existing security measures of the Polkadot blockchain. DApps on the other hand, require newly created security since they cannot have access to the main network’s security protocols.
Blocks and Chains Everywhere
The Polkadot network or in other terms the internet of blockchain networks contains two different blockchain types. The primary blockchains, or the main networks are called relay chain. The transactions are relay chains are permanent and they are limited in nature. They act as foundation for the user created blockchains to be built upon them. The second type or the user created blockchains are called parachains
Utilizing this smart design,parachains can be heavily customized, they have the benefit of having security protocols of the main network since day one. This witty structure allows for lower gas fees since there is far less need for computational horsepower .
On the other hand, the efficiency in design allows for more privacy as the user data is not on public networks.
Polkadot Bridge
Relays and parachains aside, the Polkadot network is certainly not shy. The relay can make bridges into other networks such as Bitcoin and Ethereum using parachains. In that regard, they are able to interact and gain access to almost any blockchain they want. This design allows for a future of interoperability for blockchain networks. Certainly, it would be much appreciated in the future where the technology expands. In that case the need for communication and interoperability will surely increase. Furthermore, other blockchain networks can also benefit from these connecting bridges.
The Blockchain Trilemma
The blockchain trilemma suggest that creators must compromise by choosing two out of three essential qualities of decentralization, speed and security. We can see the Ethereum network dealing with high transaction fees and lower transaction speed. Or as of late, it turned out that despite the low fees and high transaction speed, the Solana network was very much centralized.
The interoperability strategy that the Polkadot proposes, can potentially deal with all the aforementioned issues. After all, if all blockchains networks unite, no one can defeat them.
DOT Coin
As no blockchain network is complete without a native token, the DOT coin is the running blood in the veins. With a market cap of $42 billion, DOT is 7th in the ranks with a price of $42 according to CoinMarketCap.
In terms of fundamental analysis, considering the utility of the network, it is a safe assumption to have a long position on DOT.
Think 1 million transactions per second, or transaction fees much lower than any other network. On top of that, you have a network that connects all other networks. The team behind the network has demonstrated that they can deliver. And with the fast pace developments of blockchain technology, Polkadot network is a great medium for both development and communication.
In that scenario, we are bullish on DOT.
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