Polkadot is a blockchain network that facilitates blockchain space by enabling various web3 projects to interconnect. Polkadot (DOT) was launched in 2020 by Gavin Wood, Robert Habermeier and Peter Czaban, four years after Gavin Wood published the first Polkadot whitepaper in 2016. It was introduced with the aim to solve blockchain issues such as scalability, security and interoperability with its multi-chain designing.
Because most of the blockchains perform better in certain sectors, they find it difficult to realise all the advantages of blockchain at the same time. This is not the case with Polkadot.
Polkadot provides a perfect combination of decentralisation, speed, and security- an environment that allows these parameters to work in unison. These factors mark it among advanced measures in the cryptocurrency world.
What is Polkadot Network in Crypto?
With its “Relay Chain” structure, Polkadot acts as the central point of link between different blockchains. This base layer allows for a variety of blockchains and their respective dApps to work with each other with the ability to share security and transaction processing.
Polkadot targets an important problem in the world of blockchain: the fragmentation of respective networks. Instead of functioning as independent networks, blockchains integrated into Polkadot can transfer data and assets and even complete software packages amongst themselves securely and efficiently. This type of interaction is not just limited to public blockchains but also encompasses private chains.
To Web3 developers and business owners, Polkadot’s architecture makes much sense as it provides something really valuable. With the help of Substrate, developers do not have to engage in the monotonous task of developing blockchain parts from the base level. This means that they can focus on holistic components with respect to their selected features, making it easier to materialise their design.
Polkadot also provides the possibility to create cross-chain applications with the help of bridges to strong blockchain networks, such as Bitcoin and Ethereum. The relevance of Polkadot in the ecosystem enhances as it enables developers to create complex blockchain-oriented products with ease and speed.
How does Polkadot Work?
Polkadot uses a layered structure to foster the ability of different blockchains to work collectively and bring better scalability. It has several key components that come together to fix many problems seen in older blockchain networks.
The relay chain in the Polkadot ecosystem plays a crucial role in maintaining communication across different blockchains or parachains that are attached to it. It takes care of things like completing transactions, securing the network, and enforcing network rules. However, it does not support smart contracts directly. This configuration allows Polkadot to focus on high-level rules, while parachains are free to focus on particular uses and features, including decentralised finance (DeFi) to supply chain management.
It uses bridges to link its own parachains and outside blockchains like Ethereum and Bitcoin. This makes it a platform that helps different networks communicate with each other, so users can easily move assets or data between themselves.
Moreover, the system shares a security model which is beneficial for all the parachains connected to the relay chain. This provides an overall security of the network without the need to develop a separate security system for each one.
Polkadot’s NPoS Consensus
Another significant aspect that makes the network interesting is its consensus mechanism, which is based upon ‘Nominated Proof-of-Stake’ (NPoS). Validators in a standard proof-of-stake network take the responsibility of safeguarding the network by validating transactions and adding fresh blocks. While Polkadot consists of validators as well as nominators.
The validators verify transactions and maintain the security of the network. They often stake a minimum amount of DOT tokens to participate in decision-making. However, validators are not alone in this. There are nominators too, like DOT holders, who can assign their tokens to validators they trust. In return, the nominators receive a portion of the validator’s earnings.
Building Custom Blockchains with Substrate
Another essential feature of Polkadot is the Substrate, which is an open-source blockchain development framework, developed by Parity Technologies.
This allows developers to create their own custom blockchains with ease without any need to start building it from scratch. They can just use ready-to-use modules in the process to create features for their project.
Polkadot accommodates different modules. Developers can take and choose the module that suits their application in order to build the best blockchain, including consensus algorithms, governance models, and transaction types. That will end up making the development process faster and starting new blockchain projects sooner with lower costs.
Substrate also ensures that blockchains built can seamlessly integrate with the Polkadot network. Any blockchain based on Substrate can be connected to Polkadot without any hassle, benefitting from the network’s shared security and interoperability.
How to Buy Polkadot’s DOT Coin?
Several decentralised exchanges based on parachain allow investors to trade the DOT token. They can also buy it from any centralised exchanges like Binance or ByBit and withdraw it to their external crypto wallet. The tokens can be kept in multiple wallets, if owned. Ledger, Fearless, Polkawallet, and Polkadot-JS Plus are a few examples.
For centralised exchanges, users would be required to sign up and complete the KYC process for buying DOT. There are also some on and off-ramping platforms that allow you to buy DOT via fiat directly to your wallet without visiting any centralised or decentralised crypto exchanges.
Conclusion
Polkadot is a blockchain and ecosystem that may be used to build decentralised applications and other applications. Polkadot’s relay chain architecture assists developers buy time slots for their apps. The architecture enables seamless cross-chain communication avoiding complex bridging mechanisms. But, it is still in the early stages of development. Like many blockchain projects, its future is uncertain.
Also Read: Ethereum: Blockchain, Use Cases and Upgrades
