In the crypto world, Interoperability is a word that has recently become jargon. The word has a meaning as the ability of a crypto asset or blockchain to interact and communicate with other blockchains. This is seen as something that must be achieved for a crypto asset to be used in interconnected networks. Therefore, it led to several projects to build and develop interoperability. One of the projects currently carrying out interoperability is Polkadot, which has a different implementation but with the same principle.
Polkadot coin is one of the crypto products that is considered the future of cryptocurrency. Coins with the DOT symbol are included in assets that have developed quite rapidly since 2020. Currently, Polkadot (DOT) has even been included in the 10 best cryptocurrencies. This coin comes as an alternative with affordable prices and good prospects.
What Is Polkadot?
Polkadot or in tokens called DOT is a blockchain network that builds an integrated ecosystem that can connect various blockchain networks and is designed to be a decentralized multi-network where a small network can interact freely. The default crypto asset of the Polkadot network is DOT. The network technology that allows various developers to create their blockchain and applications on top of Polkadot is called parachain. Polkadot and parachain have a company-like relationship where a company has an ecosystem containing several decentralized subsidiaries. This network containing several small parachains can be used to create new blockchains and several other purposes.
Polkadot is ranked 11th in the world as the largest crypto asset with a capitalization value of 22 billion USD, as stated by CoinMarketCap. DOT as a Polkadot token has a total supply of 987 million DOT for 22 USD per 1 DOT based on the price update on April 4, 2022.
The Benefits Of Polkadot
It is not surprising that Polkadot is experiencing rapid growth. Because there are many advantages of this system. Well, here are some of the advantages of the Polkadot system that other blockchains don’t have.
- Bigger scale
An ordinary blockchain can only process a limited amount of traffic because it operates on its own. However, Polkadot can process more transactions because of the multi-chain network system it builds. This multi-chain system reduces bottlenecks or bottlenecks that often occur on other blockchains.
- Specific design
Blockchain architecture has been trying to be able to perform various features or use cases. However, Polkadot is a blockchain that has a new design for the optimization of specific use cases. This system makes blockchain services more efficient without unnecessary code. Developers can also make blockchain faster and more efficient.
- Free to set
One of the advantages of Polkadot that can be felt is the system that gives freedom to all who are members of it. This blockchain system can be optimized and adjusted as needed.
Read also : What Is Cardano (ADA)?
- Easy upgrades
Blockchain also requires upgrades from time to time so that the system can still operate optimally. The upgrade process, called a hard fork, is quite difficult and takes a long time. However, with Polkadot, fork upgrades are no longer needed. Blockchain can be directly upgraded without complicated steps.
How Do Polkadot Work?
Polkadot is built using Substrate, a programming application that is equipped with features and made especially for Polkadot. This substrate ensures that all blockchains included in the Polkadot ecosystem can always be connected and can interact within the same programming application.
Blockchain can be connected to Polkadot in a parallel way because there are parachains that can be added or removed. This parachain can be a public, private or other source blockchains. Data on the parachain network is accessed through special nodes known as collators, and will later be sent to Polkadot. Then, the main chain in this crypto asset is known as a relay chain that can support smart contracts.
The following describes the components in the Polkadot network:
The relay Chain is where the transaction will be completed. All supporting data for transactions will later be checked so that each system can understand it. This will allow Polkadot to process more than 1,000 transactions per second, according to 2020 tests.
A special blockchain that uses relay chain computing resources to confirm that transactions are accurate.
Bridges allow the Polkadot network to interact with other blockchains. Apart from that, there are several other components in the network that can keep the blockchain system operational, namely:
The validator, which functions to lock the DOT token, validates the evidence from the collator and participates in the consensus
- Nominator, which functions to lock the DOT token and secure the relay chain by choosing a trusted validator
- Collator, which functions to collect transactions and create evidence for validators
- Fisherman, whose function is to assist the network and generate reports in case of malicious activity
Polkadot Token, DOT
DOT is the internal coin of the Polkadot network. This coin allows its holder to vote on potential code changes, which then automatically upgrades the entire network if consensus is reached. The company also ran two private sales in 2019 and 2020 and raised about $100 million in subsequent sales. Due to a bug in the Ethereum Parity wallet, about half of the original ICO coins were frozen. The frozen coins have not been recovered, but the loss does not affect Polkadot’s ability to operate.
Polkadot started allowing investors to trade the remaining tokens from August 2020. Afterward, DOT has been registered and listed on more than 40 exchanges, and the high trading volume has resulted in the price of the coin skyrocketing, indeed including its market cap. The DOT coin is also “re-denominated” by a factor of 100x by the time trading begins. This doesn’t change the market cap of the coin and just makes the coin count easier to read.
Polkadot is a promising project. Given that many application developers are looking for ways to reach a wider audience, and given that there are many different blockchains.