Polkadot is an open-source protocol featuring a sharded multichain architecture that links and safeguards a network of specialized blockchains. It facilitates the transfer of any kind of data or asset, not limited to just tokens, across chains, making various blockchains interoperable. Polkadot aims to lay the groundwork for a decentralized internet of blockchains, commonly referred to as Web3.
Recognized as a layer-0 metaprotocol, Polkadot forms the foundation and dictates a structure for a network of layer 1 blockchains known as parachains (or parallel chains). As a metaprotocol, it can independently update its codebase through on-chain governance, reflecting the preferences of its token-holding community, without requiring forks.
Polkadot aims to establish a decentralized web governed by its users, facilitating the easy development of new applications, institutions, and services.
The protocol can link public and private chains, permissionless networks, oracles, and even future technologies. This allows independent blockchains to securely exchange information and transactions through the Polkadot Relay Chain (further explained below).
The DOT token, native to Polkadot, primarily serves three functions: staking for operational security, enabling network governance, and bonding tokens to integrate parachains.
Polkadot has four main elements:
* Relay Chain: The "core" of Polkadot, fostering consensus, interoperability, and shared security across various chains within the network;
* Parachains: independent chains that can have their own tokens and be optimized for particular use cases;
* Parathreads: similar to parachains but with adaptable connectivity under a cost-efficient pay-as-you-go model;
* Bridges: enable parachains and parathreads to interact and communicate with external blockchains like Ethereum.
Who Brought Polkadot to Life?
Polkadot is a leading protocol developed by the Web3 Foundation, a Swiss organization dedicated to building an open-source, fully operational, and user-friendly decentralized web.
The creators of Polkadot are Dr. Gavin Wood, Robert Habermeier, and Peter Czaban.
The most prominent of the three, Dr. Wood, serves as the president of the Web3 Foundation. He is widely recognized for his contributions to the industry, including co-founding Ethereum, establishing Parity Technologies, and developing the smart contract language Solidity. Wood also introduced the term Web3.
Habermeier is a Thiel Fellow and an expert in blockchain and cryptography research and development. Czaban previously worked as the Technology Director at the Web3 Foundation and has extensive experience in specialized fintech fields.
Why is Polkadot Considered Special?
Polkadot's design as a sharded multichain network allows it to handle multiple transactions across several chains simultaneously, known as "parachains." This parallel processing capability enhances scalability.
Using the Substrate framework, custom blockchains can be developed swiftly and seamlessly, and these Substrate blockchains are designed to easily connect to Polkadot's network. The system is highly adaptable and flexible, promoting information and functionality sharing among participants. Polkadot can upgrade automatically without requiring a fork to introduce new features or fix issues.
It features a sophisticated governance mechanism driven by its users, where all token holders have a say in network operations. Teams can tailor their governance systems on Polkadot to suit their specific needs and changing conditions. Nominators, validators, and collators each play vital roles in securing and maintaining the network while eliminating malicious activities.
By the end of 2021, Polkadot completed its first Parachain auctions, which utilized an un-permissioned candle auction system. The winner is determined by the highest bid at a random closing moment of the auction.
Polkadot allocated its initial five slots to the auction winners: Acala, Moonbeam, Astar, Parallel, and Clover. These projects will secure their parachain slots for 96 weeks, backed by DOT tokens pledged as collateral. As is customary, all projects were previously tested on Polkadot's de-facto testnet, Kusama.
How Many Polkadot (DOT) Tokens Are Available?
After a network-wide redenomination, which followed a referendum on the Polkadot platform, DOT balances increased by 100 times; thus, one old DOT equated to 100 new DOT. This change lifted the initial maximum supply from 10 million old DOT in August 2020 to 1 billion new DOT tokens. The redenomination aimed to eliminate small decimals, simplifying calculations. Although balances were multiplied by one hundred, the distribution of DOT or the proportional share of holders remained unaffected.
Polkadot's first ICO took place in October 2017, with a token price of $0.29 and 2.24 million tokens made available. The second ICO occurred in July 2020, featuring a price of $1.25 per token, with 342,080 DOT tokens sold.
How is the Polkadot Network Safeguarded?
The security of the Polkadot network is maintained via an NPoS (nominated proof-of-stake) mechanism involving validators and nominators. Nominators support validators by staking their tokens, which enhances chain security by making misconduct excessively costly.
Validators are staked on the Relay Chain, confirming transactions originating from the various parachains. This unique validity framework allows chains to interact securely under uniform rules, yet they remain independently governed.
Where Can You Acquire Polkadot (DOT)?
Leading exchanges for trading Polkadot (DOT) include Binance, Huobi Global, OKEx, Coinbase, KuCoin, and several others.
In addition to DOT, you can also purchase cryptocurrencies like Bitcoin and Ethereum directly using a credit card in your preferred fiat currency. For more information, read further here.
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