Polkadot (DOT) is an open-source blockchain project consisting of a network of blockchains that provides new functionality and scalability for each blockchain. In this way, it is possible to exchange cryptographic resources between heterogeneous blockchains. Polkadot has its own DOT token.
Polkadot history
Polkadot is a relatively young initiative, so its history is not very extensive yet. Before September 2020, the project was fairly unknown, but in November of that year its market capitalization reached $5 billion.
In January 2016, programmer Gavin Wood decided to leave the Ethereum project he was working on, and decided to create his own blockchain that would improve scalability and enable interoperability between blockchains. In October 2016, Wood presented a whitepaper of the project. In addition to the developer, we can name other Polkadot co-founders such as Robert Habermeier and Peter Czaban. Initial funding for Polkadot came from Wood’s company, Parity and the Web3 Foundation.
In October 2017, there was an initial ICO offering that raised $143 million for the project’s development. Unfortunately, in November 2017. Parity, which raised funds with the help of an ICO on Polkadot, was hit by a hacking attack, which led to the blocking of some $154 million on the Ethereum network.
This hurt Polkadot’s credibility, as several wallets were compromised. Polkadot’s final release took place in May 2020. Then, in May 2022, Polkadot and the Web 3 Foundation announced an alliance to develop a decentralized protocol for social networks, which was undoubtedly a great innovation in the field.
Technical characteristics
As mentioned at the beginning, Gavin Wood created Polkadot with the idea of improving the Ethereum network and enabling interconnection between blockchains. To do this, he worked on a series of new consensus protocols. In Polkadot, the consensus protocol used is the Nominated Proof of Stake (NPoS), which is based on the Proof of Stake (PoS) protocol, but with slight modifications. This project uses NPoS to have nominating nodes back up checking nodes. The three most important elements in this blockchain project are:
- Parchain – Polkadot uses sharding to split blockchains into subchains, which are called parchains in Polkadot. These blockchains can have nodes where smart contracts are executed.
- Relay chain – This is the main chain of this project, a combination of all existing parallel chains in the Polkadot network. In it, smart contracts are executed in parallel, allowing for greater scalability.
- Bridges – These are the elements through which communication between different blockchains is possible.
Advantages and disadvantages of Polkadot
Polkadot is part of the blockchain world, a technology that plays a fundamental role in the economic revolution we are experiencing. Its advantages and disadvantages are as follows:
Advantages of Polkadot
- Multiple platforms will be able to communicate with each other – This is very important because it allows interoperability of blockchains built on different networks.
- Great team – The team consists of highly skilled developers, mainly focused on the Ethereum platform (Ethereum co-founder) and engineers focused on research and development.
- High level of transparency – The team showed and explained their activities through various livestreams, conferences and press releases.
- Contact with the community – The lead developer can often be seen posting on Reddit or other platforms to answer questions and update the community on the project’s progress.
Disadvantages of Polkadot
- Lots of competition – There are other interoperability projects such as Ark/Lisk/Wanchain/IoT Chain/AION.
- Large network of teams – A significant number of teams with different agendas will compete to be the leader in this space.
