What is Polkadot?

What is Polkadot? In the world of blockchains and cryptocurrencies, there is a need for an ecosystem for new projects and developments. Polkadot provides this ecosystem. It is a protocol language that connects blockchains together. This is accomplished by allowing for the development of blockchain projects and then stacking those blockchains onto the platform. Once part of the network, the programs are continuously checked for issues, suggested updates, and provided feedback. Sound interesting? Read on to find out more about Polkadot.

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A brief History

Polkadot is much like Kusama in that it was developed by Gavin Wood. You may note that Gavin Wood is the co-founder of Ethereum. The platform shares some similarities with it. Launched on May 26, 2020, Polkadot is one of the newest blockchain platforms available. That being stated, the shares and the popularity of the network have proven to be promising. Predictions state that as Ethereum 2.0 is being launched, they will update some features within Polkadot to mimic the former.

We should note that Ethereum and Polkadot are not intertwined. Gavin Wood has been a huge part of both platforms. Yet, the two are independent of one another. The only platform which is directly tied to Polkadot is Kusama, which acts as a filtering network for Polkadot’s potential projects.

How does Polkadot work?

Polkadot has two functionalities, but three parts. First, you have the tokens. The tokens are known as DOTs and can be bought and sold through Polkadot or on any other cryptocurrency site. Currently, the average price for a DOT ranges from $30 to $50. Market predictions do state that the price will rise in the upcoming years, as the network becomes more seasoned. When purchased, they store the DOTs in your wallet on the network. Polkadot uses a polkadot.js address system for the wallet.

The second part of the platform is the relay chain. The relay chain is the main blockchain for the network. It is the part of the network that all the other programs latch onto. Polkadot must limit the number of projects attached to the main chain. Otherwise, there would be an overload of data. An overload would cause stability issues. Therefore, to sift through the potential candidates, Polkadot uses bids and auctions and Kusama.

Polkadots third part is the projects which are accepted to the network. They are referred to as parachains. Parachains are available on a lease contract basis and are determined through bids and auctions. Those who win the bid get the opportunity to have their projects leased on the network for up to 96 weeks. Leases offer the option to renew.

Bids, Auctions, and Kusama

To maintain the fairness of the site, Polkadot uses bids, auctions, and Kusama. Bids and auctions work in the same way. First, the potential project agrees to bond the KSM (for Kusama) or the DOT (for Polkadot). This means that the currency cannot be sold or traded during this time. DOTs are returned if the project does not win the bid.

However, if the bid wins, the DOT is locked in for the duration of the lease. At the end of the lease, the DOT is returned to the owner. Second, the number 1-8 is determined. This will determine the length of the lease if the bid is won. After the bid length is selected, the project is placed in the auction. The auctioning method is based upon a candlelight method, meaning that no one knows the exact time when it will end. This limits auction snipping. During the bids and the auction, participants bid DOTs or KSM towards their desired project. When the bidding stops, the one with the most votes wins. This project is given a lease space as a parachain on Polkadot or Kusama.

Who controls Polkadot?

Polkadot is not controlled by any individual. This takes out the threat of shareholders and board members affecting the bids or the network. Instead, the platform is maintained by automated codes which interpret the data. Not that the complete network is automated. However, the entire network is autonomous in nature. It is also decentralized. When human interaction is necessary, it is broken up into three categories.

The three human parts of the network

Nominators give investors the ability to take part in staking. This is part of the process in which the DOT is delegated to another party, the Validators. Think of it as securing your vote of confidence by allocating the DOTs to the desired party. You should note that when you invest in a validator, that your DOTs depend on whether that person adheres to the terms, rules, and stipulations of Polkadot. Choose your Validator with care.

Validators do just what the name suggests. They validate. However, they are also the ones who cast votes for the council. The Council determines the updates and features available on Polkadot. Therefore, it is critical that you choose your Validator with care. Currently, there are 7 members on the council. Yet, with the increase in traffic to Polkadot, and an increase in potential projects, more seats are expected to be available soon.

Who ensures that everything is followed?

It is essential to have a method in place to ensure that the rules and the terms are being adhered to. While the running of the site is based on automated coding, adherence monitoring is largely based upon two groups.

Collators ensure transactions are valid and then send the transactions over to the validators. They are the in-between for the nominators and the Validators, ensuring that no spam transactions are used on bids and auctions. To help maintain the integrity of the site, the second group, Fishermen, is used. Fishermen work to find and to report unacceptable behavior and spam within the network.

This is an image of a Polkadot coin. Polkadot coin on a black background. What is Polkadot? This is a cryptocurrency coin.

What is Polkadot?

Polkadot is a blockchain that allows for other blockchain projects to emerge. It is a token system that gives power to cryptocurrency transactions. Polkadot is also the near cousin of Kusama, another platform used to give projects a relaychin to attach their parachain to. While still young, the Polkadot system shows tremendous stability, safety, and growth. Predictions say that it will be as popular if not surpass Ethereum soon.