You know how we have covered a ton of different blockchains like Solana, Tezos, Cardano, and Monero, and it just seems like there’s a never-ending list of these coins and platforms for you to throw your money at.
Basically, each one does something a little different, but they say they’re the next new and crazy idea to solve the scalability trilemma.
Well, Polkadot offers itself as something actually new. They plan to be the very first layer zero solution. We’ll talk about what that means in a bit.
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What is Polkadot?
In this blog post, we are going to explain what Polkadot is, how it plans to solve the big problem of blockchains; talking to each other, and as always at the end, we’ll get into the tokenomics of the DOT coin and what that means for the future price in crypto.
We see an awful lot of emphasis given to names, and sometimes they can seem a little odd. The Polkadot blockchain name can be a tremendous asset to help beginners visualize what it’s actually about. You can probably guess where this is going.
Polkadot is kind of similar to, you know, polka dots, the fabric pattern featuring a blank background with scattered dots. This is a good starting point to visualize this project.
Right now, crypto is a little unfriendly. We have a lot of these competing projects doing similar things using similar blockchains working in isolation.
Each of these blockchains can basically be seen as one individual dot, but that’s just the start.
The reason Polkadot is important is that it lets us connect all these chains with each other.
Imagine you have this massive field of Polkadot, but you could draw lines in between all the dots and start to connect them. Each dot would represent an individual blockchain, and drawing lines between them connect all of these different projects.
What Problem does Polkadot Solve?
Now you might be wondering what problem does this actually solves?
Well, one of the biggest problems we constantly see in the crypto space is a lack of what they call interoperability. The problem is like the problem in early personal computers before we even had the internet.
We have all these blockchains hanging out like stars and space drifting around without any real way to interact with each other.
Polkadot is basically a way to make it easy to create and connect blockchains to each other.
Along with our example, computers were great, but the ability to send and receive information between two different computers really got people on board.
Polkadot is betting that the same thing will be valid for blockchains, Bitcoin and Ethereum and Cardano and all the other big chains might be great on their own, but they need to be able to interact with each other easily.
This is where we get into the Polkadot blockchain, which actually serves as what they call a layer zero function.
Think about it like a neighborhood. We have our little crypto neighborhood with all our blockchains. Basically like individual houses. But how do all these houses get electricity, water, and roads, so they’re all connected?
Polkadot wants to get even more fundamental than layer one individual blockchains and just give them an easy way to connect them all together.
This layer zero foundation is intended to make building and using blockchains easier.
Now, we kind of understand how it works how does Polkadot work at its core. Polkadot is just a proof of stake blockchain that connects other blockchains to each other.
They’re all connected, but how do they become connected, how do they maintain their connection, and what does being connected do for those blockchains?
We’re going to answer each one of these questions by talking about two main components of Polkadot:
- The Relay chain
- and the many different Parachains that exist on the network.
Think about it like this, the Polkadot network works as a hub and spoke model. For those unfamiliar with this analogy, this means that there is one center and many different branches coming off the center.
For Polkadot, the hub or center is the relay chain. This is the basis of the network where all the different parachains come to achieve consensus.
As we mentioned before, Polkadot is a proof of stake blockchain. It requires that validating nodes or people who want to participate in the network stake at least ten thousand DOT coins, which is pretty much the token used on the Polkadot network, like ether on Ethereum.
This ensures that those validating the blockchain are financially invested in its future and will not attack it or cheat.
When all these validators come together to achieve consensus, it happens right in the relay chain, but if the point of Polkadot is to connect different blockchains and dapps, which are decentralized applications.
Then how do these things maintain their individual unique rules and use cases?
Well, that is where parachains come in. Parachains are the spoke part of the hub and spoke model that we mentioned earlier.
The pair of chains go and do their own thing. Whatever that use case of their specific blockchain is, and then they come back to the relay chain for everything to sync up.
Gavin Wood, who is the founder of Polkadot, describes this process like an office. The employees in an office will have their specific jobs that they do by themselves, but every so often, they come together and sync up and coordinate their work with meetings or phone calls.
Parachains are simply timed to meet up with the relay chain every so often to make sure that everything is secure and on the same page.
In fact, this shared security is a huge part of what makes Polkadot attractive. Instead of securing your network, securing funding, and figuring out a million other details, Polkadot makes it easy to set up parachains quickly and easily, reducing the feedback loop time.
Already you can see that Polkadot is set up to be very responsive with new ideas and experiments, which definitely makes it very robust and, in some ways, anti-fragile.
Polkadot’s two main tools to change and adapt quickly and thoroughly are the Treasury and its test network Kusama.
Now, according to Gavin Wood, Kusama has a live fast die young attitude and embraces chaos. Normally, blockchain projects want to emphasize their reliability and security to counter the typical connotation that comes with being a crypto project.
This isn’t to say that Polkadot is unreliable or secure, but that they recognize the time and place for experimentation and adaptation.
Let me make it simple for you.
Kusama is basically a practice network. Actually, many blockchain networks have things like this where users can test different things before they get launched on the real network.
The exciting thing about the Polkadot test network, Kusama, is that Kusama has real stakes. The amount of money and stakes are much lower than the real Polkadot network, but it gives people enough of an incentive not to play around too much and actually try things that they are both ready for the real world and maybe a little risky.
Also, Kusama isn’t just a JV version of the Polkadot varsity platform because it shows which things are working and which aren’t.
It actually ends up having a significant influence on the development of the real Polkadot network.
Basically, Kusama is just a test net for Polkadot. The engineers might get upset at me for saying that, though.
Let’s move on to the treasury.
Now, we’ve actually talked about treasuries and many other blockchain projects like Cardano. An official treasury is helpful because you know that when you are using the blockchain to engage in transactions, the fees from those transactions are helping the network as a whole.
These funds can be used for various reasons like community building and outreach marketing, security, and software development.
Basically, those who want to make changes can use the funds from the treasury by sending a deposit, and then their deposit is refunded if the changes are accepted.
From the treasury and Kasama to its fundamental basis, Polkadot clearly wants to position itself as a platform for innovation, interoperability, scalability, and experimentation.
To me, it’s actually a fresh idea in the world of crypto that may end up being the idea that ties everything together and actually creates a massive interconnected crypto ecosystem.
I know that sounds crazy, but it’s probably the best way I could put it. Personally, I’m pretty curious to see how this all plays out.
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Anyways thanks for reading. I hope you enjoyed this article. I really hope that maybe you’ve learned something, and most of all, I hope to see you in our next blog post.