Polkadot is the native cryptocurrency to the Polkadot platform, a new type of blockchain that enables interoperability between multiple independent blockchains. Interoperability is a concept within the blockchain ecosystem that has been talked about for quite a long time, but has yet to come to fruition in any macro sense. That is, while interoperability has been achieved in micro, laboratory based environments, it has yet to be achieved and used on a wide scale. Polkadot aims to change this by launching the world’s first highly interoperable blockchain platform. The native currency behind the platform is DOT, which drives the core operations of the blockchain. Polkadot is much like other smart contract platforms (such as Ethereum), except it has enabled two things.
In order to have those operations be as seamless as possible, DOT is the token that acts like fuel for the network. Much like how Ether is the lifeblood of all smart contracts on Ethereum.
By: Keegan Francis | Sep 18, 2020 | Modified Sep 18, 2020
Several notable exchanges have started offering the DOT token on their platform. Even though the project is relatively new (Officially August 2020), the token has seen a reasonable amount of support from some of the exchange giants. Exchanges such as Binance, Crypto.com, and Kraken have all listed DOT on their platform. This is uncommon for such a new project, however the technical team backing the project has the authority, and reputation to back the authenticity and legitimacy of DOT.
High: 10000+ Tx/s
Reason: The main reason behind a low rating is the ambiguity behind the disbursement of the DOT supply. The chain is simply not mature enough to draw concrete conclusions about where DOT tokens are located, and who owns them. For example, there is no DOT rich list at this time.
Reason: The Polkadot team is led by Gavin Wood of Parity. Gavin made major contributions to the Ethereum project, and is considered one of the co-founders. The Polkadot github is a highly active repository which means that the developer engagement is high. However, due to the infancy of the project, this aspect of the project gets a medium.
Reason: DOT is a relatively new token on the markets. Even though it is on many of the major exchanges, and a top 10 cryptocurrency, it is still very new to the world of cryptocurrency. This ultimately means that there is not the infrastructure in place for significant amounts of liquidity to be available.
It is difficult to nail down exactly when Polkadot began as several of the founders have been putting its pieces together for the better part of a decade now. Blockchain interoperability has been talked about for as long as multiple blockchains have existed. Therefore the concepts and frameworks that make up Polkadot have existed for quite some time, however Polkadot the project formally got its start around 2018 during the first web3 conference. The Polkadot project raised more than $100 million dollars during a 2017 ICO, but was relatively silent in the years to come. The highly anticipated Poldadot blockchain and its underlying token DOT was officially released into the markets in August of 2020.
Polkadot is promising things that other projects are also trying to deliver. The difference is that Polkadot is trying to build and launch a ship that is parked in a hanger, or rather on the runway. Ethereum on the other hand has to try and deliver its promises in the air. It is much more difficult to upgrade an already existing blockchain to have completely new functionality rather than build a new one from scratch on the ground. In that sense, Polkadot has a leg up on its competitors (Ethereum) as it is able to take the time it needs to get things right before launching.
Once Polkadot has launched, it is promised to enable a whole new swath of use cases such as interoperability and sharding. This will allow for horizontal scaling where Ethereum has failed in this dimension. The transaction throughput of Ethereum is capped at about 30 transaction per second, whereas Polkadot is rumoured to be able to process millions of transactions per second with ease. If this is the case, then Polkadot will be able to handle every smart contract that has ever slowed down Ethereum and more. No more high gas fees, no more crypto kitties slowing down the network.
Polkadot has an uphill battle when it comes to gaining market share for the smart contract community. There are a number of smart contract platforms that are vying for attention within the cryptosphere. From Charles Hoskinson’s Cardano to the market dominant Ethereum. Polkadot has a lot to prove, and if it doesn’t prove that it is the smart contract platform of the future right out of the gates, it might not survive past its initial launch. It could just be another token that has risen due to its potential and hype, and then failed to deliver on its promises. The main disadvantage to Polkadot is that it is simply too early to tell whether or not DOT will be a success.
DOT is the native cryptocurrency that allows the Polkadot blockchain to function. There are just less than a billion tokens.
Polkadot is able to achieve high transaction throughput by allowing blockchains to run in parallel. It then combines the individual blocks from these blockchain into the blocks of the Polkadot blockchain. In essence, Polkadot is a blockchain of blockchains.
Polkadot is able to “speak” or interoperate with other blockchains by introducing the notion of a bridge chain. That is, blockchains with the sole purpose of feeding information from other blockchains into the main Polkadot relay chain.
There is nothing technically impossible about Polkadot, the main problem is its proven track record in the field. Polkadot combines several theoretical concepts and softwares together in order to create its blockchain of blockchains. There is no reason why Polkadot cannot achieve what it has set out to do.