About Polkadot (DOT)weiss-badge

Polkadot (DOT)


It is no secret that the development of Ethereum 2.0 occurred at a snail's pace. The slow development of the project ultimately resulted in the exit of its co-founder and the founder of Solidity, Dr. Gavin Wood, from the project. After his exit, Dr. Wood began work on a scalable blockchain technology under the name of Polkadot, which uses sharding infrastructure to achieve scalability that has been so elusive to the first two generations of blockchain technologies.


The first generation of blockchain technology was in its infancy and thus, focused mainly on the payment aspect of the decentralized space. However, the second generation levelled up with the introduction of smart contracts to increase speed and eliminate the need for intermediaries in decentralized finance.


The third generation of blockchain technologies, however, is focused on something entirely different. Third-generation blockchain, of which Polkadot forms a significant part, aims to provide interoperability and security to other blockchain networks.


Polkadot's potential integration into the blockchain economy lies in its ability to fragment the smart contract market into different blockchains that cater to highly targeted use-cases. DOT, which is the token in the Polkadot blockchain, has been developed with three functions in mind.


1.     Bonding and Payment - DOT allows token exchange and payment transactions to take place between users, while providing enough flexibility to eliminate inactive parachains and add new ones if necessary


2.     Operation - Polkadot has been designed so that honest players in the system are rewarded, and dishonest players are penalized through a loss of stake. This is done with the help of game theory that helps DOT achieve enhanced security.


3.     Governance: DOT uses a proof-of-stake algorithm that provides complete control over the Polkadot protocol to users. This means that DOT owners and holders manage everything from protocol fixes to upgrades, with no interference from miners and others.


The DOT token is, therefore, a breath of fresh air in the blockchain industry because of its considerable upside from the current prices. However, this token also comes with certain risks to investors. Firstly, it is still in the early stages of development, which means that the demand for the functionality of Polkadot is still not certain. Secondly, Polkadot does not offer investors any information regarding limits. For instance, with Bitcoin, there will only ever be 21 million BTC. This means that DOT comes with a risk of inflation as well.


History


Polkadot is the brainchild of Dr. Gavin Wood, who wished to overcome the sharding hurdles that earlier generation blockchain technologies (including Ethereum and Ethereum 2.0) faced as they tried to scale up over the years. This inspired the birth of the Polkadot Protocol, a multi-chain and heterogeneous protocol that took as long as four months to be envisioned. It wasn't too long before the Polkadot whitepaper hit the markets on November 14th, 2016.


Presently, Polkadot is spearheaded by its three co-founders - Dr. Gavin Wood, the co-founder of Ethereum and its former Chief of Technology, Peter Czaban, Council Member of the Web3 Foundation, and Thiel Fellow Robert Habermeier.


Team


Swiss-based Web3 Foundation launched the Polkadot protocol as its flagship project. Web3 Foundation works towards the facilitation of a user-friendly and completely functional decentralized space. As such, Web3 Foundation contributes to the development of the various applications and services of Polkadot through several partnerships.


Other than the Web3 Foundation, the eclectic team of Polkadot also consists of several developers from Parity Technologies, world-class researchers from ETH Zurich and Inria Paris, and several capital partners from Polychain Capital and other such crypto-funds.


Technology


The technology that lies at the core of Polkadot, 'Web 3.0', is the pioneering project of Dr. Wood that aims to decentralize the webspace. Substrate, a framework that allows developers to build their blockchain, was innovated shortly after Polkadot, followed by the "canary" Kusuma network. The Kusama network functions on the same software as Polkadot, albeit unaudited versions, but is independent of the Polkadot technology.


Polkadot is a true multi-chain environment that allows for cross-chain computation and cross-chain registries in the network. This is achieved through the Polkadot network, allowing the transfer of tokens and various kinds of arbitrary data across the different blockchain. These blockchains include public blockchain (that are open and permissionless) and private (i.e., permissioned) ones.


Applications can therefore be built at Polkadot to use permissioned data from private blockchain on public blockchain openly. Anonymity at Polkadot is achieved through various parachains that allow transactions to simultaneously be held and distributed amongst various blockchains.


The Ecosystem Of Polkadot


Three main components make up the ecosystem of Polkadot:



  1. Parachains - These are different blockchains that work in parallel to enable the transfer of transactions between the blockchains.

  2. Relay Chain - The Relay Chain is at the very heart of the Polkadot protocol that enables the exchange of transactions between parachains. This is the chain that is responsible for consensus and security within the ecosystem.

  3. Bridges - Bridges are links to other blockchains such as Ethereum that come with their own consensus.


Future Focus


The Polkadot DOT token has been making leaps and bounds ever since its conception. The token has now overtaken XRP to become the fourth-largest coin with regard to market capitalization. According to the tracker, CoinGecko, XRP is currently trading at around $0.30, while DOT stands at about $14 (08/04/2021).


The price of the DOT token has risen by almost 50% in just the past week, which pushed the market cap to $13.45 billion, which is higher than the market cap of XRP, which is currently around $13.28 billion.


For more information regarding Polkadot, visit the official site or check out our blog section for articles covering topics such as how coins are mined, how blockchain technology works, and more.


Which wallets support Polkadot?


There are many great options for storing DOT. Please do your own research to determine which will work best for you. At BitPrime, we highly recommend buying a Trezor or Ledger device for the ultimate security, although good free options include Trust Wallet.


Last updated: 08/04/2021

A wallet is essentially a bank account for your cryptocurrency and the wallet address is like your account number. The sender of the cryptocurrency needs a wallet address so they have somewhere they can send it from their wallet, much like a bank transfer. This wallet is giving you access to the blockchain where you can view your balance, send and receive cryptocurrency.

For information please read our beginners guide to cryptocurrency wallets.

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Storing your coins with Wallets

A wallet is essentially a bank account for your cryptocurrency and the wallet address is like your account number. The sender of the cryptocurrency needs a wallet address so they have somewhere they can send it from their wallet, much like a bank transfer. This wallet is giving you access to the blockchain where you can view your balance, send and receive cryptocurrency.

For information please read our beginners guide to cryptocurrency wallets.

Pay with POLI. Its fast!

POLI - internet bankingPOLI is secure and fast. It links directly to your internet banking – login with your normal details and the rest is easy. No extra fees or surcharges. Watch this short video to see how it works.

About Bitcoin

Bitcoin (BTC) is a form of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. Transactions are stored on a distributed, immutable, online, public ledger known as a blockchain. Bitcoin was the first truly decentralised cryptocurrency which was created by a programmer under the pseudonym Satoshi Nakamoto and was released in 2009. The system is peer-to-peer, verified by network nodes and recorded in a public distributed ledger called the blockchain. Bitcoin can be exchanged for other currencies, products, and services with over 100,000 merchants and vendors accepting bitcoin as payment. Bitcoin can also be held as an investment. There are only a fixed number of Bitcoin will ever be mined (21 million), it’s not controlled by any one government or central bank, and there’s no such thing as quantitative easing or fractional reserve banking. These qualities make Bitcoin excellent as a store of value and a long-term safe-haven asset, similar to gold.

A Bitcoin success story that went viral on social media is Kristoffer Koch from Norway. Koch invested around $27 in Bitcoin in 2009 and then forgot about it for four years. He remembered about his Bitcoin wallet in 2013, which had then grown in value to $886,000.

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