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Polkadot
What is Polkadot?
Despite being a new piece in the cryptocurrency chessboard, Polkadot has been able to ramp up to massive heights. It has garnered industry-wide interest and, with a timely release, struck gold amid the 2021 cryptocurrency bull market. But beyond the impressive Polkadot price AUD is innovative technology like no other, addressing real issues in the crypto sphere and bringing digital currency one step closer to scalable and economically viable mass adoption.
History
Ethereum co-founder Gavin Wood first introduced the idea for establishing interoperability between blockchains in 2014. Ethereum’s goal to achieve interoperability was clear in its early days, highlighted further by a blog post by Vitalik Buterin—Ethereum’s primary founder. However, the goal to connect blockchains eventually fell off the priority list when Ethereum currency was released as a smart contract development platform for decentralized applications. Instead, the developers pushed interoperability functions to the 2.0 upgrade, which had been planned for years. But by 2018, Gavin Wood had grown tired of waiting, bringing about the start of Polkadot’s ambitious development. Polkadot launched its genesis relay chain in 2020 and has actively been in development by the Web3 Foundation. Currently, the blockchain is developing its parachains, which are the last pieces of the puzzle to fully realize the network’s multi-chain system and open doors for interoperable functions. At launch, DOT, Polkadot’s native cryptocurrency, enjoyed a fair amount of investor interest. But the timing of its release allowed the coin to quickly skyrocket amid the 2021 bull market, breaching an all-time high of almost $69. Currently, the Polkadot price AUD stands at $33, recovering from a market low of $14 post-early-June selloff.
The Polkadot Market Cap
As one of the most anticipated blockchain projects at the turn of the century, Polkadot's impressive feats just keep on piling. Despite being new, DOT has already flown upward to 9th place in the coin market cap at $24 billion, with a 24-hour trading volume of over $1.6 billion.
Unique Features of Polkadot
A Focus on Interoperability
The blockchain space is largely disjointed, with networks that employ a wide range of algorithms and protocols that don’t speak or work with each other. And in an industry that feeds on innovation and diversification, blockchains are continuously growing further apart in purpose and technology. While innovations are always welcome in the world of cryptocurrency, the lack of interoperability between blockchains brings about a massive scalability error. If someone who owns BTC currency can’t purchase products from a merchant who only accepts ETH payments due to blockchain incompatibility, then the crypto useability scene will be limited to people who own the same coins. With thousands of disjointed cryptocurrencies on the market, the situation will be no different than the fiat money distribution—wherein USD can only be used in the USA, and AUD can only be used in Australia. Polkadot changes the game by building a focal, industry-wide connection that supports cross-blockchain transfers—fostering network interoperability and allowing the cryptocurrency sphere to scale up to economic standards. By bringing all blockchains into a single network, Polkadot has created a blockchain for all blockchains. Moreover, its cross-platform transaction support isn’t limited to coins and tokens, allowing users to send any form of data or asset to one another.
Multi-Chain Network
The Polkadot protocol is a multi-chain framework that allows for the creation of heterogeneous, interoperable blockchains. This ability to connect distinct and compatible distributed systems enables scalability and mass coordination across entire economies—and even ecosystems. It’s an innovative approach different from other blockchain scaling projects like Lightning Network or Plasma, which aim to optimize transaction throughput on individual chains rather than allowing them to freely exchange assets with one another. Within the multi-chain architecture are two chains that make up the Polkadot network:
- Relay Chain — the main chain in charge of governance, staking transactions, and network security. Validators, smart contracts, and other members involved in the system are branched out of the main relay chain.
- Parachains — these are chains branched from the main relay chain and work similarly to shards. CPU-intensive tasks and smart contracts all live in parachains, which blockchain projects can purchase upon deployment. These communicate with each other to prevent congestion on the relay chain and allow various decentralized applications to thrive without worrying about scalability issues.
Governance
The system of governance nodes ensures that the Polkadot landscape stays safe and efficient. These are run by community-elected members who protect protocol upgrades, network standards, fees, inflation rate changes (if necessary) and prevent dishonest behavior like double spends or faulty computations on para chain transactions. Meanwhile, the Polkadot State Transition Systems are a set of rules that govern how states change over time within each para chain. The state transition systems consist of smart contracts for every transaction occurring in Polkadots. They allow everyone to see validators’ votes towards messages sent out by the main chain relay node, which contains important information about adding new blocks or changing existing ones. This transparency ensures no one can tamper with the data on the main chain.
DOT FAQs
Who Are The Founders of Polkadot?
Who Are The Founders of Polkadot?
Ethereum co-founder Gavin Wood founded Polkadot.
Is the DOT Wallet Available For Android & iPhone?
The Parity Signer allows users to turn their smartphone into a hardware wallet for DOT and other supported cryptocurrencies. It's available for both Android and iOS.
What Are The Differences Between Polkadot And Ethereum?
The main difference between the two blockchains is interoperability, which Polkadot achieves through its multi-chain architecture. This feature allows users to send and receive cryptocurrencies and other digital assets despite being housed in different networks. While Ethereum 2.0 is expected to own similar features, developments are still underway.
Are DOT Transactions Anonymous?
Like many other cryptocurrency transactions, DOT transactions are generally “anonymous” because there isn’t a name or face connected to wallet addresses. However, as blockchains are naturally public platforms, anyone can view all transactions—though it’s unlikely for a stranger to connect a wallet address to a specific individual.
Can DOT Be Hacked?
There have been no known instances of DOT being hacked or exploited in the past. The blockchain's coding and decentralization make hacking virtually impossible, as there is no single point of entry for malicious actors to target. While the DOT ICO in 2017 suffered a hack that froze 60% of coins, the fault did not lie in Polkadot's network.
Will Polkadot Be a Good Investment Opportunity?
Along with a promising blockchain project, the Polkadot price grew by over 1,500% at the height of the 2021 bull market, prompting experts to make big bets concerning DOT's price progression over the next few years. On the conservative end, Longforecast expects a Polkadot price AUD of $22 to close off 2021. However, more eager forecasters are looking at between $42 to $149 by early 2022. Given Polkadot's promising future and quick ramp-up to the top 10 coins by market cap, it's proven to be an investment opportunity to watch.
Can I Buy DOT With PayPal?
As DOT is relatively new, many cryptocurrency exchanges are still preparing to support the coin on their platforms. And while popular exchanges like Binance and Coinbase already sell DOT, they don't directly accept PayPal payments. However, you can still buy DOT with PayPal by purchasing stablecoins through an exchange like eToro (which accepts PayPal) and converting them to Polkadot coins with a coin swapper.
How Can I Buy Polkadot With My Credit Card?
You can buy Polkadot coins with a credit card through popular exchanges like Coinbase and Binance. Simply create an account, verify it to increase your spending limit, and select credit card as your payment method upon initiating a purchase.
How Does Polkadot Staking Work?
Polkadot utilizes a complex staking method called the Nominated Proof-of-Stake (NPoS), which supports two roles: validators and nominators. You can choose to be a nominator and vote for validators who you trust, and they’ll, in turn, help you earn coin rewards. Essentially, a nominator backs up a validator who then puts a stake on the network. Like traditional PoS models, the NPoS also supports stake pools so various nominator-validator pairs can pool funds to increase their overall stake value and receive a bigger share of rewards.
Will Polkadot Reach $1,000?
DOT is one of the few tokens that has attracted massive investor interest. As such, many believe that the Polkadot price AUD can hit $1,000 as early as 2022. However, given the volatility and uncertainty of the crypto market, these opinions shouldn’t be taken as investment advice—they’re speculative at best.