Polkadot is another altcoin that has been in the world of cryptocurrency since 2016. Nevertheless, its popularity gained in 2020 when investors started to be interested in Polkadot. The reason is that Polkadot is a multi-chain network that aims to connect different blockchains into a single network. Other cryptocurrencies like Bitcoin cannot do it as they operate on their own. It promises a more effective and faster way to deal with transactions.
Polkadot was launched in 2016 by Gavin Wood, a co-founder of Ethereum and the most influential developer in the world. Nevertheless, the path was not easy, and Gavin Wood was able to start the project only in 2020. The main goal of the project is to improve scalability, governance, and interoperability. It aims to create a place where cryptocurrencies could be connected to make the framework more organized and efficient. There is access to the validation of transactions and security. All information is synchronized to be understood by all systems, which means that the system is then allowed to handle more validation of transactions per second.
It is possible due to the Substrate Blockchain Framework, consisting of 3 main components:
-
Relay Chain = it is the control center of the whole Polkadot. The main function is to control the safety, consensus, and cross-chain interoperability of the whole network.
-
Para-chains = para-chains are independent blockchains within the network with their own coins and blockchains.
-
Bridges = systems that allow communication between the network and other networks such as Bitcoin or Ethereum. Allow transferring coins from one network to another.
As mentioned above, the advantage is seen in handling more transactions at the same time and cooperation between cryptocurrencies.
Nowadays, it is the fourth-biggest cryptocurrency. The token is DOT, and the owner is allowed to suggest changes within the network or vote on potential code changes, which then affect the whole network. Also, anyone who holds DOT is allowed to lock the tokens in order to have a significant role, such as validator, nominator, collector, and fisherman. Together, they create consensus. Each of the position has its own function, and it is important to know the difference:
Validator - a person who validates data within the chain.
Nominator - a person who select validators
Collector - a person who stores a full history for each chain
Fisherman - a person who monitors and report bad behavior
Polkadot is definitely worth mentioning as it is a big player in the world of crypto and is attracting new investors every day.
