How Is It Different And Why Is It On Crypto Enthusiasts’ Radar?

The number of developers writing codes on the Polkadot blockchain has increased significantly to nearly 10,000 now from just 2,600 around the same time last year. Over 2 million lines of code were written for Polkadot in 2021 as compared to 600,000 at the start of the year. Let’s understand why Polkadot has caught crypto enthusiasts’ attention, and how it matters to the blockchain ecosystem.

Polkadot is one of the few blockchain networks designed around the philosophy of creating various smaller inter-connected sub-chains within the umbrella of a single blockchain on top.

The main chain on top of the sub-chains is known as the relay chain. The sub-chains are called parachains. This parallel chain design makes Polkadot scalable and ensures it is not burdened by the need to introduce hard forks in the blockchain. Hard forks refer to major changes in a network’s protocol that help in making previously invalid transactions valid or vice-versa. Polkadot can be looked at as a decentralised ecosystem for blockchains rather than as a single blockchain network.

Also, other blockchains can join the Polkadot infrastructure, and data can traverse from other blockchains across Polkadot’s multi-chain application environment like real-world assets and tokens.

The light paper (a miniature, concise version of the white paper) of the Polkadot network calls the protocol a heterogenous blockchain.

“Polkadot is a next-generation blockchain protocol that unites an entire network of purpose-built blockchains, allowing them to operate seamlessly together at scale,” the light paper further details. “It connects several chains together in a single network, allowing them to process transactions in parallel and exchange data between chains with security guarantees.”


What was the idea behind developing Polkadot?

Polkadot was the creation of Gavin Wood, one of the co-founders of Ethereum. Wood left the Ethereum project in 2016 because he didn’t think it was doing enough to pursue the promise of blockchain technology, a truly decentralised ecosystem.

In mid-2016, Wood started working on an idea of a sharded version of the Ethereum blockchain and then released the first draft of Polkadot’s white paper in October that year.

Wood later went on to create the Web3 Foundation, a non-profit entity established to support research and development of Polkadot, with Peter Czaban. The Web3 Foundation hosted Polkadot’s first token auction in October 2017. The sale was successful, raising $145 million in under two weeks and selling 50 percent of the initial 10 million DOT tokens (the native token of Polkadot).

In 2018, Polkadot initially started rolling out various proof-of-concepts as a way to test its base relay chain and the relay chain’s support of parachains running underneath the main relay chain. This was a way to gear up for the main launch of the network.

In August 2019, the project had its first public launch Kusama, a test version of Polkadot. Kusama was an unaudited version designed to test governance, staking, and sharding (a method that helps to split and store a single dataset in multiple databases) under natural economic conditions. Polkadot also released 1 percent of the initial DOT supply to Kusama stakeholders to encourage participation.

For its mainnet (a fully developed blockchain protocol) launch, Polkadot rolled it out in stages instead of a complete single launch. It was divided into phases that introduced various functions to the mainnet. The five phases were all released in 2020 with the final one in August 2020.

What are the different components of the Polkadot network?

As mentioned above, Polkadot is an ecosystem of decentralised blockchains. Anyone can create a blockchain in the network. The network allows for the creation of three types of blockchains.

The Relay Chain:

The relay chain uses an offshoot of the proof-of-stake (PoS) consensus mechanism called nominated-proof-of-stake (NPoS) to validate transactions and blocks. This is where the transactions in the network are finalised. The network allows users to stake their cryptocurrency in the network. Staking is a system where users lock up a certain amount of cryptocurrency to validate a transaction. Validators are selected by nominators who stake DOTs that can be lost if the validator deviates from their purpose. Real monetary consequences for nominators distinguish Polkadot’s Nominated Proof-of-Stake (NPoS) from the standard proof-of-stake consensus mechanism.

Users who stake DOT on the network have the option to enter a particular contract that gives them different roles in the network like validators, nominators, and collators.

Parachains:

Parachains are application-specific custom blockchains that run parallel to the relay chain. Transactions on parachains can be as fast as transactions on the relay chain due to the ability of validators on the relay chain to validate transactions on individual parachain blockchains. There are 100 parachain slots on Polkadot, with more coming in the upcoming months.

Bridges:

The Polkadot network uses bridges to interact and connect with other blockchains. There is an ongoing process of creating bridges with blockchains like EOS, Cosmos, Ethereum and Bitcoin. These bridges allow for token swaps between these blockchains without the need for a central exchange to facilitate these swaps.

Who can influence the development of the network?

The users of the network have the influence to affect the direction and development of the network. There are different types of users that have this privilege.

DOT Holders:

Anyone who holds DOT tokens in the network can use them to propose changes and can even approve or reject changes proposed by others.

The Council:

DOT holders can elect council members who are in-charge of proposing changes to the network and are responsible for approving proposals made by DOT holders. Proposals from council members require less votes than ordinary DOT holders.

The Technical Committee:

In the event of an emergency, teams that are actively building the Polkadot network can make special proposals. The technical team is selected by council members through a voting system.

Conclusion

Polkadot has raised around $200 million from investors, making it one of the most well-funded blockchain projects in the history of this nascent technology. Polkadot’s value is believed to be to promise to give significant interoperability between multiple blockchains, while also highlighting the benefits and potential of the sharding technology.

Despite the Polkadot project being worked on for years, the project is still young when compared to the heavy hitters in the industry like bitcoin and Ethereum, and it still has a long way to go to catch up with several cross-chain competitors.

While several crypto proponents are not fans of sharding as they believe the process can ultimately lead to vulnerabilities, there are certainly many advantages and benefits to this type of blockchain technology.

Polkadot can be easily traded in India across different platforms that allow you to purchase or sell cryptocurrency. If you want to invest in Polkadot, you can use a crypto exchange platform like WazirX to make your purchase. The WazirX app displays the latest traded value of the Polkadot and other tradeable cryptocurrencies along with charting tools.