Many call Polkadot the “killer of Ethereum” and other similar nicknames, but in fact, it is a fundamentally new product.
Polkadot uses a unique technology that is capable of combining all blockchains that exist nowadays into one ecosystem, which presents great opportunities for developers and common users. Due to this technology, an “attachment” of any other blockchain is possible.
The idea for the Polkadot project came from a developer who previously worked on Ethereum, Dr. Gavin Wood. The developer did a lot for Ethereum, including writing the code for the first working version of the cryptocurrency and creating a programming language for its smart contracts. Despite this, Wood became frustrated with Ethereum’s slow development and left the development team. In 2016, Gavin Wood begins to develop a new cryptocurrency, which, according to his idea, should surpass Ethereum and have technological solutions missing from the known cryptocurrency. Imagine, if only we were able to send bitcoins to Ethereum without intermediaries in the form of exchanges and exchangers.
An ICO held in 2017 helped Polkadot to launch and raise $145 million in investments.
Features of the Polkadot
The most important and notable feature of this project is that the multi-chain network is able to combine and “attach” multiple blockchains. Thus, the huge number of transactions can be processed by the system simultaneously and, moreover, can be scaled infinitely. As stated above, this ecosystem can connect any blockchain, it is so because a specific technology has been developed particularly for this purpose, which combines various chains with Polkadot’s main blockchain.
The flexibility and adaptability of the Polkadot network make it possible to transfer not only tokens but also information and functions between blockchains via a convenient application on a smartphone.
If significant changes need to be made to the system or any errors need to be corrected, there is no need for a fork, as is the case with other cryptocurrencies, the update takes place without forks in the blockchain. However, there is a high level of security, due to the whole system of participants with various functions.
Pros and cons of Polkadot
There are many advantages of such a project:
- There is a team of well-known developers behind the project and it is constantly growing. When searching for a promising project to invest in, you should look at the management team and how many developers are putting their time and effort into the project.
- Polkadot has a high level of security.
- In terms of technology Polcadot is a revolutionary.
- Cryptocurrency DOT is supported by major cryptocurrency exchanges.
- The project is fully decentralized and its source code is open.
- DOT tokens are of high liquidity.
- High transaction speeds and unlimited scalability are provided dut to unique architecture.
- It has gained a lot of interest and over 630% since its launch.
The disadvantages are that the project is currently in its development phase and many of the features have not yet been implemented. At the same time, it should be taken into account that there is high competition among sites for decentralized applications, and it is still unknown how Polkadot will be able to withstand it.
Moreover, the Polkadot (DOT) blockchain appears to be less focused on the user experience and has become a bit too complicated for the benefits Polkadot (DOT) brings Community-led hybrid consensus is another potential weakness. While this makes good sense, Polkadot cryptocurrency holders don’t always know what’s best for a typical network.
Another disadvantage relates to Polkadot’s allocation of DOT tokens. A significant portion of the investment in this project comes from China, especially ordinary miners. Many cryptocurrency enthusiasts are wondering what this means for the future of Polkadot(DOT), and how it will affect inactive DOT holders with incredibly high inflation.
Why Polkadot is popular in 2021?
Polkadot serves as a protocol for protocols or a blockchain for blockchains. It is also possible to interact with other blockchains that are part of the Polkadot ecosystem. This saves money and resources, and gives developers access to the Polkadot community instead of creating their own community to promote new coin-funded projects. Polkadot simplifies the innovation process and takes the burden off developers to create everything from scratch. The underlying attraction for developers is the more expressive and broader canvas on which they can paint with Substrate, Polkadot’s development system, compared to Ethereum.
If developers flock to it, so do investors.
Why Polkadot is called the killer of Ethereum?
Just as the Ethereum network is called the killer of Bitcoin, the Polkadot network is called the killer of Ethereum itself. Unlike the Bitcoin network, which only transmits information about transactions and the number of coins in wallets, the Ethereum network can be used to create arbitrary “smart contracts” and issue tokens in the ERC-20 standard.
Polkadot developers have gone even further and implemented the ability to create networks of other projects based on their blockchain. Such derivative networks are called parachains. A parachain is an independent blockchain with its token and the ability to optimize functionality for specific tasks and project needs. Parachains not only have all the advantages of Polkadotbut also can interact with other projects within the network. The number of Polkadot parachain spots is limited and will be allocated through auctions. More details about the auctions will follow.
Gavin himself has repeatedly stated that the Polkadot project is not a direct competitor to etherium and will take its own, new niche in the crypto industry.
Polkadot and ETH have similar ambitions, both aiming to become a major platform for smart contracts. DOT has many elements that are designed to address the perceived shortcomings of ETH. But ETH is an established platform, with many existing projects already running on it. Ethereum has many elements that make it a favorite asset for investors buying cryptocurrencies in the last couple of years. Of course, it is much more liquid.
For many investors, ETH is also the coin they buy when they start diversifying outside of Bitcoin.
Why Invest in Polkadot?
In 2020, Polka crypto was one of the most profitable and most trusted cryptocurrencies, it acquired a top cryptocurrency position in a very short time frame. Further, Bitcoin has processed 3 transactions/second and Ethereum has processed 15 transactions/second. This indicates the scalability issue both these cryptocurrencies face. Polkadot’s parachains enable faster processing of transactions in parallel. This then boosts throughput. With such great prospects, investors are moving away from Bitcoin and Ethereum and investing in Polkadot.
How to buy and sell Polkadot?
To date, Polkadot is a popular cryptocurrency, which is bought and sold on many exchanges. To purchase DOT cryptocurrency is possible on such popular exchanges as:
- Binance;
- Huobi Global;
- HBTC;
- OKEx;
- Gate;
- Kraken and etc.
The most relevant way to buy and sell cryptocurrencies at the moment is the Binance exchange.
Final words
Polkadot is absolutely a promising project and is a platform capable of combining disparate blockchains into one ecosystem. Behind the project are smart developers who make big plans for the future and actively improve it, this generates interest among users and investors.
The project is still not fully implemented, but if the creators of Polkadot manage to implement in it all the intended functions, such a project opens up great opportunities for the field of blockchain technology. That’s why we should pay attention to cryptocurrency Polkadot in 2021 because it looks like a promising project.