What is Polkadot?
Updated: Sep 15, 2021
Polkadot is a popular blockchain network.
It can be described as a ‘blockchain of blockchains,’ or multichain network.
To further describe what Polkadot is, you need to learn and understand its mechanism and structure first.
Currently, the Polkadot project is maintained and governed by a group led by Gavin Wood, the previous CTO of Ethereum.
What makes Polkadot unique?
At the moment, you can connect nearly 100 para-chains to the Polkadot multichain with an unmatched level of reliability and speed.
This fully operational system has the ability to process up to 1,000,000 transactions in one second.
And all of this can be performed while remaining decentralized.
By design, para-chains and para-threads also have the ability to communicate with each other.
This handles the isolation problems that are common in blockchains.
In addition to this, the costs of running and maintaining are much lower as you will not find one chain (Relay) responsible for the working.
Furthermore, Polkadot is the most developer-friendly network, which is a major plus. This is because almost all the para-chains are designed with Substrate, a segmental framework that allows you to design blockchains as per exact specifications within a few hours.
Since the Relay Chain includes Substrate, you can connect any Substrate-based blockchain to the network.
The future of Polkadot:
The Relay Chain of Polkadot is working as of May 2020.
The test network for the Polkadot was Kusama, and currently, Polkadot’s functionality is also under testing on this network.
A special working mechanism that is used to distribute subscriptions to para-chains (known as candle auctions) is also being tested.
The future looks good for Polkadot in many ways.
Currently, more than 100 projects such as KILT, Katal, Acala, Edgeware, Centrifuge, Polymath, etc., have decided to use this working mechanism.
Why is it important?
Developers building advanced, decentralized systems have to design these systems from scratch.
This means the process is time-consuming, needs special skills and plenty of resources to build a competing network.
Polkadot's objective is to create a way for web engineers and developers to design valuable networks for all blockchains instead of one.
How does Polkadot work?
Blockchains can be connected with Polkadot and work through “parachains” to access the proof-of-stake and to validate transactions.
In the “relay chain," all transactions are checked, and addresses and all information are stored so that every system can access and understand it.
While using this functionality, blockchains connect to Polkadot. Plus, they can also use their own PoS mechanism, and update their code and run the DApps or chosen tokens.
The network has its own security featuring multiple layers, and it is encrypted with the latest protocols.
Does Polkadot have a cryptocurrency?
Yes, it is known as DOT. It is the internal token of this Polkadot network. The token allows owners to vote on potential code updates and changes, which then automatically upgrade when a consensus is achieved, and also pay for services on the Polkadot network.
Does Utopia Digital Asset Management's DeFi Infrastructure Fund invest in Polkadot?
We consider Polkadot to be the premier solution for interoperability between blockchains available in the crypto economy.
Given the potential this opens up for all dApps, we see Polkadot as being central to the development of the blockchain economy.
That is why our fund invests in Polkadot.