In this article, I cover the basics of Polkadot blockchain — an open-source project founded by the Web3 Foundation.
What is Polkadot?
A scalable, interoperable & secure network protocol for the next web. Polkadot is a network protocol that allows data and not just tokens to be transferred across blockchains which means Polkadot is a true multi-chain application environment where cross-chain registries and cross-chain computation are possible.
Polkadot enables transfer of data across public, permissionless, private as well as permissioned blockchains. This makes it possible to build applications that get permissioned data from a private blockchain and use it on a public blockchain. The platform provided by Polkadot is great for applications such as identity related information, healthcare records, financial records, etc. which require data to remain private but proof of its existence be public and access to the data be permissioned.
The key features of Polkadot which separates it from other blockchain protocols are listed below:
Interoperability: Polkadot enables cross-blockchain transfers of any type of data or asset. Thus, connecting to Polkadot gives applications the ability to interoperate with a wide variety of blockchains in the Polkadot network.
Economic & Transaction Scalability: Polkadot provides economic and transaction scalability by enabling a common set of validators to secure multiple blockchains and by spreading transactions across multiple parallel blockchains.
Ease of Usage: It is possible to create a custom blockchain in minutes using the Substrate framework as well as it being possible to connect your own chain to Polkadot and get interoperability and security from day one.
Forkless: This capability to upgrade without hard forks to integrate new features or fix bugs, enables Polkadot to easily adapt to changes and upgrade itself as better technologies become available in the near future.
Secure: Polkadot’s novel data availability and validity scheme allows chains to interact with each other in a way such that chains remain independent in their governance, but united in their security.
User-driven network governance: Polkadot has a sophisticated governance system where all stakeholders have a voice. Upgrades to the network are coordinated on-chain and enacted autonomously, ensuring that Polkadot’s development reflects the values of the community and avoids stagnation.
The DOT token
DOTs have four key functions in the Polkadot Ecosystem:
(i) Providing governance for the network
(ii) Operating the network
(iii) Creating parachains by bonding DOTs
(iv) Fees for ferrying messages across parachains
The DOT token serves three distinct purposes:
a. Governance: Polkadot token holders have complete control over the protocol inclusive of managing exceptional events such as protocol upgrades and fixes.
b. Staking: Game theory incentivizes token holders to behave in honest ways. Good actors are rewarded by this mechanism whilst bad actors will lose their stake in the network thereby ensuring the network to remain secured.
c. Bonding: New parachains are added by bonding tokens. Outdated or non-useful parachains are removed by removing bonded tokens. This is a form of proof of stake.
Concluding remarks & Insights
Polkadot is a scalable, interoperable & secure network protocol for the next web. In the following articles, I will be deep diving into Polkadot’s network structure & transaction processing, parachains, potential use cases as well as development on Polkadot with a couple of my own projects exploring development on the Polkadot blockchain.
Meanwhile, feel free to check out more details: Polkadot