What is Polkadot (DOT)?

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In brief

Polkadot positions itself as the next-generation blockchain protocol, capable of connecting multiple specialized chains into a common network. With a strong focus on building the infrastructure for Web 3.0 - and founded by the Web3 Foundation - Polkadot's goal is to break the internet's monopoly and empower individual users.

Introduce​

Blockchain has been around since the birth of Bitcoin . Although it is a breakthrough technology, there are certain disadvantages to be aware of. Essentially, individual blockchains cannot communicate with another blockchain. Extending interoperability between disparate chains can lead to data exchange and ultimately more robust applications and services.
In the past, developers have tried to "bridge" blockchains. That's how thread A works with string B and vice versa. However, connecting multiple (hundreds or thousands) blockchains at once is still a challenge. The developers from Polkadot and its extension, the Web3 Foundation, believe that an easier solution can be created in the years to come.

What is Polkadot?​

According to the statement, Polkadot is an open source protocol built for everyone, Polkadot is the next step in the evolution of blockchain technology. The original concept of Polkadot was created by Dr. Gavin Wood, co-founder of Ethereum . The Polkadot team wants to focus their efforts on security, scalability, and innovation. To do so, the necessary infrastructure needs to be created to not only support new ideas and concepts, but also to ensure that proper interoperability can be achieved.
An individual blockchain in the Polkadot ecosystem is called a parachain , while the main chain is called a Relay Chain. The idea is that parachains and Relay Chains can easily exchange information at all times. You can think of parachains as similar to individual shards in the planned ETH 2.0 rollout.
Any developer, company or individual can create their custom parachains through Substrate, a framework for creating cryptocurrencies and decentralized systems. Once the custom chain is connected to the Polkadot network, it becomes compatible with all other parachains on the network.

Building cross-chain applications, products, and services becomes a lot simpler with this design. Previously, transferring data or assets between blockchains was not possible on a large scale.

Securing and validating data across different parachains is done through network validators, where a small group of these validators can secure multiple parachains. These validators will also ensure transactions can be spread across multiple parachains to improve scalability.

Benefits of Polkadot​

There are many reasons for developers to explore the Polkadot ecosystem. Basically, current blockchain technology still faces many problems in terms of scalability, customization, interoperability, governance, and upgradeability.

In terms of scale, Polkadot has plenty of room to grow. It acts as a polyline network, allowing parallel handovers on different individual chains. This eliminates one of the biggest hurdles of blockchain technology today. Parallel processing is a significant improvement and could pave the way for wider blockchain adoption globally.

Those looking for customization can take advantage of some of the other features offered by Polkadot. Currently, there is no "one blockchain infrastructure that rules them all". Every project has its own needs and requirements and Polkadot allows every private chain to be designed and optimized for specific functions. With the help of Substrate, developers can effectively tailor their own chains to fit the needs of the project.

In terms of interoperability, it is important for projects and applications to be able to share data seamlessly. While it remains to be seen what kind of products and services will be created, there are many possible use cases. Polkadot can create a whole new financial ecosystem, with each individual parachain taking on a specific aspect at a time.
Any community linked to a private parachain can manage their network as they deem necessary. All in all, all communities are very important to the future management of Polkadot. Gathering feedback from the community can yield valuable insights that help develop the project over time.

In addition, Polkadot makes it easy to upgrade individual parachains. Especially there is no need for a hard fork , as this could split the community. Instead, the original chain can be easily upgraded.

About DOT . token​

Like most other blockchain infrastructure projects, Polkadot owns its own native token. That token is called DOT, it acts as the token of the network, similar to ETH being the token for Ethereum and BTC being the token for Bitcoin.

This token is used in many cases. First of all, it grants token holders a portion of the governance of the entire Polkadot platform. This includes determining fees on the network, voting on overall network upgrades, and deploying or removing parachains.

DOT is also designed to facilitate network consensus through staking. Similar to other networks that involve staking, all DOT holders are encouraged to abide by the rules at all times. But in practice, what is the way to do this? In fact, if you do not comply, users will lose money.

A third option is to use DOT for linking. This is required when new parachains are added to the Polkadot ecosystem. During the link time, the DOT used to link will be locked. It will be returned after the association period ends and the parachain is removed from the ecosystem.

Stake and link on Polkadot​

The interoperability that Polkadot approached went beyond just exchanging data and assets. It is also a way to introduce new concepts, such as incentivizing honest token staking and linking.

Staking tokens on the blockchain network is not a new concept. Blockchains that use a Proof of Stake (PoS) consensus model work by rewarding users who stake on the network. With Polkadot, honest stakers will be rewarded, while the bad guys can lose their entire stake.
As we mentioned, every new parachain is added by linking DOT tokens. Binding is the commitment of tokens to the network for a specific period of time. Unhelpful chains or projects that are no longer maintained will be deleted and their associated tokens returned.

summary​

In theory, there are many reasons why Polkadot is attractive to developers. It's an ecosystem capable of serving individual programmers, small businesses, and large corporations as well. Users can customize their own blockchain to fit specific needs and upgrade them without too much difficulty and complexity on Polkadot. It's a new, valuable step forward for the entire crypto industry.
However, Polkadot is still a very young ecosystem. Projects are still being developed on Polkadot. So it will take some time until the first big projects are launched. According to PolkaProject , there are hundreds of projects under development on this ecosystem, ranging from cryptocurrency wallets to infrastructure projects, tools, DApps, etc.
Regarding the DOT token, the creators of Polkadot have stated that this is not a token designed for speculation. While DOT has the same value as currency on exchanges, it is primarily designed to serve the purposes outlined above.

Do you have more questions about Polkadot and blockchain? Stay tuned to our Ask Academy - Ask Academy platform . The Binance community will answer for you.
 

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