It is not common for the Evercode Lab team to post ‘reviews’ of separate digital assets. With our Everchain White Label Wallet we serve the entire web3 industry, not individual blockchains. At the same time, there are, along with such well-known coins as BTC and ETH, some digital assets that are definitely worth looking at. That is why, from now on, we are going to post some overviews of new or less-known blockchains. We believe that, as a team of blockchain development experts, we do have some important points to communicate. The first blockchain on this is Polkadot.
Polkadot in the Web 3.0 Context
What is the essence of Polkadot and its role in the new blockchain era. This web3-based era is all about, according to TechCrunch+, a ‘decentralized web.’ The new web means particular patterns of ‘collaboration’ enabled by ‘decentralized networks that no single entity controls.’
Deloitte describes the fundamentals of the new web this way:
- Interaction level constituted by ‘wearable AR/VR’; voice technology, and IoT devices
- Computation level constituted by ‘distributed computing’ through AI and 5G
- Information level enabled by ‘distributed ledger technology’ also known as blockchain
As it is clear, such a seamless yet clearly “autonomous” environment will be notable for an entire set of distinctive features. Among them, Investopedia highlights such defining characteristics, on top of decentralization, as:
- “Trustlessness” is understood as an opportunity to interact with each other with no “trusted intermediary” involved
- “Permissionlessness” is viewed as participation with no need to be authorized by “governing body”
- A greater role played by ML
- Connectivity
- Ubiquiti
Such a blockchain-based future looks extremely promising and even breathtaking. However, there is a problem we have already mentioned on several occasions. Namely, it is the problem of scalability associated with numerous blockchains. As well as the fact that there are plenty of blockchains already. All of them need to be linked with each other somehow to make the Web3 world possible.
And that is when Polkadot comes into play.
Polkadot and Its Potential
Polkadot is a decentralized and open-source proof-of-authority blockchain launched in 2020. This technology is capable of uniting all existing blockchains within a single ecosystem. Simply put, Polkadot is a project functioning on its own blockchain potentially compatible with any other blockchains. In other words, any other blockchain can be linked with it.
Again, Polkadot’s distinctive feature is that this network is multi-chain. Owing to this nature, this system is capable of concurrently processing an impressive amount of transactions with infinite scalability. Via a special technology, any blockchain can be connected with this ecosystem.
Polkadot Basics
The flexibility and adjustability of Polkadot make it possible to transfer various kinds of data. More than that, when it is necessary to introduce significant changes or deal with errors, forks are not required. Simultaneously, the system is notable for a high level of security. How can it be possible? The easiest way to understand it is to describe a range of basic terms.
There are 4 crucial elements within the Polkadot network:
- The relay chain constitutes the “core” of the system and provides a space for consensus and connectivity between multiple blockchains.
- Parachains are autonomously functioning blockchains linked to the system with their own functionalities.
- Parathreads resemble parachains and can be used in a more cost-effective fashion when there is no need to get connected to the main network.
- Finally, the so-called “bridges” make it possible to connect parachains and parathreads with external blockchains, such as ETH and BTC
In addition to flexibility, Polkadot is known for its perfect balance between speed and security. This advantage is ensured by the four possible roles one can play in this system.
- Nominators are responsible for choosing the so-called validators. As such, they are entitled to be rewarded for the creation of blocks. Consequently, it is in their interest to choose those who contributed more. In addition, they are those who actually supply the tokens (aka “DOT”)
- Validators’ mission is to check transactions. As long as they do so, they get a certain amount of the DOT tokens.
- Collators are involved in the block building process via the parachains. Together, they identify the block indicating the current state of the chain and transfer it to the relay chain.
- Finally, fishermen are the main protection against fraud. They control collators and validators and are entitled to get rewards for the violations they detect.
Such an elaborate structure caught investors’ attention all over the world. Since August 2020, it has reached its market capitalization peak in November 2021 and exceeded $50 billion! More than that, the price of the DOT token rose from roughly $6 to$50 this November.
We at Evercode Lab are keeping a close eye on Polkadot and hope it will make a truly Web3-based world possible!
By the way, if you want to use their DOT tokens at your company, you should consider launching your crypto wallet with the Evercode WL solution for digital assets!