Polkadot’s core features can open up a world of services
Polkadot is built to allow any type of data to be sent between any type of blockchain and has the potential to unlock a wide range of real-world use cases.
Built by Parity, a company founded by Ethereum co-founder Dr. Gavin Wood and former Ethereum Foundation Head of Security Dr. Jutta Steiner. Parity has essentially molded the blockchain industry from building the widely used Parity Ethereum client and implementations of Bitcoin and Zcash to now working on ‘the next generation of blockchain technology’ with Polkadot.
The Polkadot blockchain marketing efforts propose a strong ethical standpoint from the outset on the issues surrounding personal data and how it is used (or abused) by centralized entities in today’s world.
“Because that data can often paint a detailed picture of our personal lives, it’s become a resource more valuable than oil” – Polkadot Lightpaper, 2020, April
The Polkadot team wants to prioritize individual sovereignty but at the same time recognizes that blockchain technology, in its current form, isn’t ready to break free from the corporate grip on the web yet. Something they want to change.
By bringing together features from multiple specialized blockchains, Polkadot intends to pave the way for new decentralized applications (dapps) and marketplaces to emerge and offer ways to access services.
Polkadot aims to build further on the promise of previous blockchain networks and offer fundamental advantages to builders and end-users.
Blockchains that operate in isolation can only process a limited amount of traffic. Polkadot is a sharded multichain network, meaning it can process many transactions on several chains in parallel, eliminating the bottlenecks that can occur on older networks.
This parallel processing power significantly improves scalability and has the potential to create the right conditions for increased adoption and future growth. Arguably, these are the most important growth metrics for the blockchain industry right now.
Optimized for use-cases
As mentioned, Polkadot is a sharded blockchain, meaning it connects several chains in a single network. This allows the processing of transactions in parallel and the ability to exchange data between chains.
Each chain in the network can be optimized for a specific use case rather than being forced to adapt to a one-size-fits-all model. More chains and more specialization means more possibilities for innovation.
Blockchains, like other software, need to be updated to function correctly and efficiently. However, upgrading conventional chains requires what are called “hard forks”, which create two separate transaction histories that can break a community and often take a lot of time-consuming work.
Polkadot promises forkless upgrades, which would allow blockchains to evolve and adapt easily as better technology becomes available.
Networks and applications on Polkadot can share information and functionality like apps on a phone, without needing to rely on centralized service providers. Polkadot offers interoperability and cross-chain communication.
For example, a chain providing financial services can communicate with another that provides access to real-world data such as stock market price feeds for tokenized equities trading.
Governance procedures in the blockchain arena are quite a new concept. Older blockchains do not give Individual stakeholders or token holders a say in proposing or refusing protocol changes. Polkadot is governed by anyone who owns the DOT token, Polkadot’s native currency. All DOT holders are able to propose a change to the protocol or vote on existing proposals.
Overall, the DOT token serves three distinct purposes: governance over the network, staking, and bonding. Polkadot token holders have complete control over the protocol as all privileges, which on other platforms are given exclusively to miners, are given to all DOT holders. Whilst staking simply incentivizes token holders to behave honestly in order to be rewarded.
Developers on Polkadot govern their network as they see fit, and hold a transparent stake in the future of Polkadot’s network governance as a whole. Teams can customize their blockchain’s governance to their needs, experiment with new ideas, or swap in ready-made parts for faster deployment.
Who’s building on Polkadot?
Polkadot is the flagship project of the Web3 Foundation, a Swiss Foundation founded to facilitate a fully functional and user-friendly decentralized web. To date, the Web3 Foundation has supported several teams with grants, funding projects at all levels of the web3 technology industry, from low-level infrastructure to ecosystem parts such as wallets, parachains, bridges, and tooling.
Furthermore, In early 2021, Interlay will introduce Polkadot’s first trustless wrapped Bitcoin – PolkaBTC – once deployed, users will be able to mint 1:1 Bitcoin-backed assets onto Polkadot marking a critical step towards a truly interoperable ecosystem.
Over 100 projects have or are currently being built in the Polkadot ecosystem. These projects range from core technical infrastructure to applications for decentralized finance (DeFi), privacy-oriented data, and digital identity systems, social networking, IoT, gaming, robotics, and supply chain logistics.
For example, some applications currently being built on Polkadot have functionality in which a user’s account and data are stored by encrypting them locally on their own devices rather than on a centralized server.
This approach gives people full control over their data in a user-friendly way and further fulfills the ethical standpoint outlined by Polkadot since its inception. By building systems that are fundamentally incapable of abusing user trust by design, Polkadot hopes to move society in a fairer, more representative direction.
Polkadot founder Gavin Wood recently remarked, “You’ve heard the phrase the pen is mightier than the sword. Well, the keyboard is going to become even mightier than the pen pretty soon. The world, in some sense, belongs to coders.”
All blockchains are forced to make tradeoffs to support specific features and use cases, and as chain specialization increases, the need to transact between them will only increase.
When combining the benefits listed above with a world-class team and infrastructure behind Polkadot it becomes clearer that these core features can open a world of possibility for new services. Furthermore, it should give a better indication of why there is so much hype surrounding Polkadot right now.
Polkadot offers developers a scalable, interoperable, specialized, and easily upgradable blockchain solution on which to deploy decentralized applications (dapps), and as Ethereum’s scalability and cost issues persist they could prove to be a thorn too big to shake out.
As other solutions such as Polkadot start deploying projects offering higher levels of efficiency coupled with lower fees. Developers will be forced to take notice and users will simply enjoy benefits without care for the underlying operations or their providers.
Check out our other articles covering the Flow and Avalanche blockchains.