What is Polkadot?
Cryptocurrency is a hot topic these days, the crypto market is exciting and stimulating, but at the same time, it is distributed into many blockchains, which makes it difficult to operate. And to run it smoothly, platforms like Polkadot have been established. It is new in the market, but everyone active in it these days knows what it is and its importance in the market. Polkadot is quickly attaining popularity. Now let’s have a great look at what it is and how it helps in the smooth running of blockchains in the cryptocurrency.
Definition of Polkadot
Polkadot is the next-generation, edge-cutting blockchain that connects many other blockchains and forms a particular network; like Ethereum and Cardano, these are blockchain-powered networks. These networks enable everyone to create custom blockchains and tokens with the advantage of smooth, quick, and transparent data exchange between blockchains. Several live blockchains are working on the network of Polkadot. Polkadot is different because it has parachains, a short form of parallel chains, a series of connected blockchains. Having multiple lanes to complete a task relieves the overload of a network, and in return, it works smoothly.
Polkadot is giving competition to Ethereum, and many programs are using that blockchain. They are forming applications on it because they feel it is a little bit safer than others. Both platforms use “Smart Contracts,” but Polkadot goes a little further in this by giving its members relaxation of making blockchains and connecting them to others. Ethereum 2.0 is also providing the same function in its version of 2021. In addition, it can perform multiple tasks like fixing bugs and adding new features without requiring hard forks.
Network’s token DOT
The Polkadot network has a token named DOT. Holders can use this platform by participating in it as validators, nominators, collators, and fishermen- all distinct roles on the blockchain that allow data transmission via relay chains or bridges to help operate the network. It is used for staking, governance, and bonding.
Staking is receiving cryptocurrency as a reward for keeping the funds in the digital wallet to support the operation performed on the connected blockchain.
In bonding, tokens are kept in the lock for a certain period of time. The Polkadot community then uses tokens for governance to vote for making changes in the network.
Unlike networks like bitcoin, Polkadot can fix bugs and introduce new features without requiring hard forks, making it easier to use in its upgraded version.
Why invest in Polkadot?
In 2020, Polkadot made itself one of the most profitable and valuable cryptocurrencies .t was launched in 2017 by Dr. Gavin Wood, the co-founder of blockchain like Ethereum. Back in 2017, the Polkadot foundation organized an ICO in which it upraised about US$ 160. But it went into losses and had to undergo two rounds of sales in 2018 and 2019. The losses were recovered in August 2020, which means the candidates who had purchased coins for US$30, now they can buy US$ 100 new coins for US$6 coins. In addition, Polkadot proved itself best in scalability while others, like bitcoin, processed three transactions per second and Ethereum processed fifteen transactions per second, which means they both faced scalability issues. With these significant aspects, people are interested in investing in Polkadot than bitcoin or Ethereum.
Should we invest in Polkadot Now?
Now 2021 is the right time to invest in Polkadot. At the start of 2021, it has shown fluctuations in its prices, its price has fallen to US$17.71 from US$48.68, but from June, it has been steadily and constantly growing with 16.6%.In the future, it is expected to grow further. In two to three years, it has been predicted to grow from 90.72 to 107.4US$. That’s why Polkadot is in a prime position to take over altcoin’s place, which Ethereum currently takes. It had all the right moves; all the big investors in Russia liked it and have invested in it. It gives proof, why we should invest in this coin. Ethereum has known the best altcoin after bitcoin, but Polkadot has steamrolled it over the last month in grains up to 88% of Ethereum’s 50%. It looks like that shortly, Polkadot is going to take over its position by all means.
Polkadot’s parachains reduce congestion.
Polkadot reduces congestion by using more than one network. It is not pushing all the apps through one network, but it has many networks connected, which may solve many problems. In this process, each network has its mini-chain or a para chain attached to the main chain in the end. If you are in a rush for the demand of one particular application, then then it would not affect the performance of the other applications connected to it. It can be taken as a side road that takes the traffic away from a congested highway. Also, para chain auctions give a chance to developers to organize decentralized apps on the blockchain. These auctions have been in development throughout 2021.
We all know that digital assets have taken over the world, everyone is interested in cryptocurrency due to its popularity and recognition in the world. It has grabbed everyone’s attention quickly. So, if you want to be in the crypto world, you have to be wise with your decisions and thoughts; there are hundreds of platforms waiting to give you thousands of cryptocurrencies. We all hope for a promising futures. Now, it’s on you to get to the right platform that takes you into the crypto world and choose the most beneficial platform to you. We recommend you do your research and check the trends before choosing any platform or making any investment decision. We should always be careful about one thing that is past prices are not guaranteed to remain the same in the future.