Polkadot is a scalable heterogeneous multi-chain. Polkadot allows new designs of blockchains to communicate and pool their security while still allowing them to have the entirely arbitrary state-transition functions. Polkadot is a network that connects blockchains.
Provides a framework under which new blockchains may be created and to which the existing blockchains can, if their communities desire, be transitioned- Pooled security- Trust-free interchain transactability When it comes to the blockchain, the level of enthusiasm often exceeds any doubts. For example – if any blockchain is a specific unchangeable chain, how can I transfer my data to another blockchain? The answer is – there are no ways to do it. That’s why Polkadot was created
What is Polkadot?
The official website says that it is «a multi‐chain technology». Speaking simply – it is a network that connects blockchains. It creates space where data from different blockchains can be operated and exchanged fast and securely. And the important thing is – without any system-wide upgrades or hard forks. It is a goal of this project.
The mission of Polkadot is to change the existing internet structure into Web3: a completely new and decentralized web. Polkadot helps to connect private and public blockchains and other networks in the Web3 ecosystem. It enables the internet where independent blockchains can exchange information and trust-free transactions via the Polkadot. It is really a project of the future – digital world, internet of things and web decentralization.
The idea was presented by Gavin Wood, co-founder of Ethereum and founder of Parity Technologies in the end of 2016. Then, in mid-2017 Web3 Foundation was created, which manages the project, together with Parity Technologies. In October 2017 the successful ICO was performed. We will tell about it later, but you can check DOT on COIN360 to know the actual situation with this token, if you wish. The last but not least from the general information - Polkadot’s Genesis block will be launched only in Q3 2019. That’s why some information below has no confirmation, except theoretical.
Polkadot consists of many different parachains, which allows to get the necessary level of anonymity. The feature of the system that transactions can be held in the same time and distributed among the blockchains. The main goal of Polkadot ecosystem to make sure that all participating blockchains stays secure and all transactions are faithfully fulfilled.
The ecosystem of Polkadot consists of three different components:
- Relay chain. It is the centre of system, which makes transaction exchanges between chains enabled. Also it guarantees consensus and security.
- Parachains. These are «parallel blockchains» which make transactions real and transfer them to the original blockchain.
- Bridges. These are specific links to blockchains with their own consensus such as Ethereum.
Polkadot coin (DOT)
The token in Polkadot ecosystem is called DOT. It has 3 main functions.
- Governance. DOT owners have full control over the protocol. The ecosystem has no miners and use proof-of-stake algorithm so holders manage all exceptional events such as protocol upgrades and fixes.
- Operation. The system uses game theory and rewards those DOT owners who behave in honest ways. Cheaters will lose parts of their stake. This principle make system stays secure.
- Bonding & Payment. Tokens give possibility to add new parachains or to remove non-active ones.
Another important thing about DOT tokens is that there is no information about limits. Yes, the whitepaper says that investors can buy 5 millions from total 10 millions DOT. But there are no words – «there will be only 10 millions tokens and no new tokens will be created». So the risk of price inflation may appear.
Polkadot ICO review
ICO of Polkadot was so successful, that tokens were over on the third day. The DOT price at that moment was 0.109 ETH, so available 5 million tokens were sold for 485,331 ETH. All tokens are still illiquid – you can’t buy or trade them. All participants if ICO will receive their tokens when and if the Genesis block is be launched in 2019.
Polkadot seems to be a very controversial project. On the one hand, the idea is great and it takes the blockchain technology to the next level. But on the other hand, the investments werefrozen for two years and who knows what will happen. Some experts show doubts that Polkadot team can create a competitive product (famous Ian Balina is among them). Especially when competitors are not standing still (Cosmos, ChainLink, Wanchain, Atomic Cross Chain). Some ICO ratings agrees with them. Polkadot has 2,5 rating on icobench and icobazaar. Icorating also thinks that risks are medium. Really, two years looks like a very long period in the sharp and fast world of blockchain technologies.
Another trouble are funds for this project, which were frozen via vulnerability in the Ethereum Parity Wallet library contract. Among 500 000 ETH, «lost in nowhere», were near 330k, raised in the ICO. And our conclusion could be very pessimistic if only one detail wouldn’t exist. This May Gavin Wood announced that they will launch the first proof-of-concept (PoC) of Polkadot soon. And it means that patient is rather alive than dead. But still, no one can change anything now – the money is invested and tokens will appear only in 2019. We need only to wait and see if this becomes the reality.
See Also on BitcoinWiki
- https://www.youtube.com/watch?v=UuF7drY-bbw (Ian Balina)