Polkadot Coin is one of the fastest-growing projects in the cryptocurrency market. Since August 2020, the price of the Polkadot token has increased by 1238%. A multi-platform distributes the ticket; the purpose is to unite separate blockchains into a shared, decentralized Web 3.0 network.
First of all, Polkadot Coin is not only a cryptocurrency but a multi-platform that seeks to unite all currently existing blockchains into a global ecosystem. As conceived by the creators, the Web 3.0 network will be entirely controlled by users. The identity and personal data of network users will be protected from any central authorities.
It will be possible to connect existing blockchains to the Polkadot platform and create new blockchains within it. The system will be able to run cross registers and cross calculations. With Polkadot, it will be possible to quickly and securely process and transfer data without system updates and hard forks.
How Does Polkadot (Polkadot Coin) Work?
To get a better idea of what is Polkadot consider the network structure of this platform:
- Relay Chain ensures the security of all blockchains connected to the infrastructure. A system of validators is used to confirm transactions in connected blockchains.
- Parachains. When connected to the Relay Chain, blockchains remain independent and continue to operate in parallel without affecting each other’s functionality. Each of the parachains can use their own rules and perform their tasks. At the same time, it is possible to exchange information and transfer tokens between parachains.
- Paraflows. This is the name for blockchains that connect to the Relay Chain as needed.
- Bridges. They provide the interaction of the network with external networks.
At the same time, the platform can combine both public and private blockchains and seamlessly transfer data between them.
What Does It Give?
Now let’s take a closer look at the advantages of such a network device. The development of a new decentralized network usually starts from scratch. Developers are forced to re-develop analogs of already implemented algorithms. This takes a lot of time and other resources.
In addition, it is necessary to take into account the existing competition between the networks. Essentially, each team works in isolation and locally.
On the Polkadot network, development teams can join forces and make better use of resources. In addition, new developments can be implemented in all blockchains, which improves the system’s operation as a whole.
Problems Solved by Polkadot
As any cryptocurrency project develops, the blockchain will sooner or later face typical problems. Finding a way to fix the problem effectively ultimately leads to the emergence of a new project. It was the search for a fundamentally new solution that prompted the emergence of the Polkadot platform.
- Scalability. This is a common problem for all blockchains. In a multi-chain network, scalability is improved by running processes in parallel on different chains.
- Customization. The Relay Chain serves as a link between parachains but does not affect their functionality. Each of the parachains can maintain its functions and rules.
- Control. Connecting to the Relay Chain does not oblige the blockchain communities to change their governance principles. Each community can adhere to the familiar governance model adopted earlier.
- Compatibility. Different financial systems can be created on the network, where individual blockchains can support their tokens. At the same time, the transfer of data and tickets between blockchains is implemented.
The Polkadot network has its DOT token. Like most cryptocurrencies, DOT ensures that all transactions are carried out within the network. In addition, token holders receive the right to participate in management. Perhaps, when planning an RVN to Shib exchange, some funds should be converted to DOT.
Many investors see the Polkadot project as an excellent long-term investment option.