Polkadot - innovator of interoperability
Polkadot (DOT) is a commonly traded cryptocurrency with many possible applications. In a nutshell, this innovative next-generation blockchain protocol aims to disrupt internet monopolies to distribute the power back to individual users. If you're interested in understanding this currency and its protocol in-depth, welcome on a journey on its technology and protocol.
The gist of Polkadot
Polkadot is a cryptocurrency and protocol aiming to innovate blockchain technology further. While the industry is making significant gains, it still has weaknesses. The developers of Polkadot are especially interested in the inability of different blockchain networks to communicate with one another. Hence, this project introduces interoperability between chains for enhanced data exchange.
The concept is envisioned by Dr. Gavin Wood, a co-founder of Ethereum, the current biggest smart contract network. Polkadot is an open-source solution that strives for innovation, scalability, and security besides the interoperability mentioned above as an individual cryptocurrency and blockchain protocol. Polkadot consists of parachains (separate parallel chains) and the main chain known as the Relay Chain as a crypto ecosystem. These different scale chains are designed especially for the efficient exchange of information, the core of this crypto protocol. Polkadot is so interesting for various applications because any developer or company can connect their parachain to the Polkadot network, making it interoperable with all the other parachains on that network. This makes Polkadot very attractive in the context of developing and building various cross-chain applications, products, or services on a much larger scale than ever before.
Polkadot is an exciting crypto project to keep an eye on due to its strive to explore solutions for various problems and weaknesses associated with blockchain technology. Especially scaling and interoperability are of Polkadot’s core interests. Polkadot’s parallel processing of transfers is an edge for this network. And what comes to interoperability, Polkadot does tick this box, too, thanks to its seamless data sharing between the different chains. Polkadot is a tough player on the customization front as well, as Polkadot enables all individual chains to have their design optimized for each specific functionality. In the context of upgradeability, Polkadot has made the upgrades of individual parachains nice and easy; for example, hard fork updates (often known to be quite a big hassle for a blockchain network) are no longer necessary.
Being a young ecosystem, Polkadot sparks a vast interest in blockchain-based project developers and investors. With a wide array of projects under development, there are undoubtedly exciting events on the horizon. Some applications of this network include wallets, tooling, and decentralized applications, to name just a few. Therefore, it might be worth keeping one’s eyes open for interesting Polkadot applications.
The DOT token
Polkadot has its own tradable native token known as DOT. This token serves as a network token similar to ETH for Ethereum or BTC for Bitcoin. Aside from transacting value, DOT is also a staked currency encouraging its holders to contribute to the network’s security by staking. The token also has other use cases; holders are given rights of governance of the entire Polkadot platform in terms of determining network fees, voting for upgrades, or changing the parachains in one way or another. Bonding is another utility of DOT. This happens in the event of new parachains being added to Polkadot’s ecosystem. Bonding stands for the commitment of tokens in the network for a predetermined time. Unused and non-maintained chains will be removed, and the tokens bonded to them returned.