What is Polkadot? Polkadot Explained

What is Polkadot? Polkadot Explained
4 min read
26 January 2021

What would the crypto space look like if all  blockchains had a common link to one another? Something like a superhighway for blockchains  where Ethereum connected to Cardano and Bitcoin,   Bitcoin connected to Tezos  and VeChain. Tron to Litecoin. Join us as we take a peek  into THE chain to connect   all other blockchains – Let’s connect  the dots and answer the question... What is Polkadot?

Launched in 2016, Polkadot is the   brainchild of Gavin Wood, an Ethereum co-founder  and creator of Solidity, the programming language   used by Ethereum.

Polkadot is now run by Web3  Foundation and developed by Parity Technologies,   both of which Gavin is a co-founder of. Polkadot  is what Gavin Wood envisioned as the next version   of Ethereum, and THIS is how it works. The current blockchain landscape is,   at best, fragmented, with multiple, independent  blockchains all operating in isolation. As yet,   there is no efficient way for these separate  chains to operate and communicate with each other   to share data, transact, or exchange value.

Polkadot is working to correct this by providing   for the first time—cross-chain interoperability.  Polkadot will allow any blockchain: private and   public, permissioned and permissionless, as well  as oracles and decentralized apps to talk to   each other and be connected in a trustless way  under a single decentralized Polkadot umbrella.What is Polkadot? Polkadot Explained

Here’s a few examples of how this could work. A smart contract event on Ethereum  triggers a payment on the Bitcoin network   An oracle that feeds price data to dozens  of different blockchains at the same time  

This is why Polkadot is being  called the Internet of Blockchains.   Like the Internet, Polkadot will  behave as an interoperable network   connecting all blockchains. How does it do this? Polkadot   will achieve it through the Polkadot Relay  Chain, parachains and connectors called bridges.

Polkadot’s Relay Chain is the core  layer of the network and acts like   a bookkeeper overlooking all network transactions. Parachains are the second layer. They’re  made up of individual blockchains all   connected in parallel. Hence, parallel  chains or para-chains. Para-chains allow   multiple chains to run simultaneously to enable  scalability and increase transaction speed.   They can be bought by cryptocurrency  companies and customized to suit their needs.   Thirdly, bridges. Polkadot will use Bridges to  connect to difficult or established blockchains   like Bitcoin and Ethereum by writing  a break-in or a break-out smart   contract that will allow these chains to  communicate with the Polkadot network.

Now that we know what Polkadot  is, let’s dig into DOT. What exactly   is it and what is it used for?

$DOT is the native token of the   Polkadot network and is used for 3 main  things: Governance, Staking and Bonding. First, Governance. All DOT token holders are  given the right to vote over decisions that   govern the network, such as upgrades or changing  network fees. Votes are weighted according to the   amount of tokens, and the agreed time period  that the tokens are locked up with the vote.  

Next, Polkadot Staking. DOT holders  can help secure the Polkadot network   by staking their tokens to the network as  validators and nominators. Validators take   part in the minting of blocks while nominators  back these validators up. Both provide important   security functions, and therefore receive  $DOT as payout rewards as incentives. And third, Bonding. As mentioned earlier,  Parachains can be bought. In order to buy   a parachain a user has to “bond” DOT  in order to control the parachain.  

Bonding ties DOT tokens to the Relay  Chain whenever a new parachain is added. Polkadot aspires to build a multichain universe,  where multiple blockchains can co-exist and   operate together to create a more vibrant,  interoperable mega-system of blockchains. How do you envision an internet of blockchains  working for you? Is this all hype or do you see   real value coming to your life because of it?  Please share your thoughts in the comments. And if you’re a $DOT crypto token holder,  let us know your Polkadot price prediction.

Alex 10.6K
Joined: 4 years ago
In case you have found a mistake in the text, please send a message to the author by selecting the mistake and pressing Ctrl-Enter.
Comments (1)
You must be logged in to comment.

Sign In / Sign Up