The current blockchain networks have proven their potential in disrupting the flow of traditional fintech applications, yet the advantage of all the blockchain networks cannot be enjoyed at once. This lack of interoperability requires a modern solution, which is why Polkadot’s design came into the market. Polkadot offers many advantages over the existing blockchains, including governance, upgradeability, scalability, parachain, and cross-chain composability.
Since the digital-savvy world is highly dependent on data, what if you can send any form of data to anyone in the world? Polkadot, being a top-notch blockchain protocol, allows the blockchain networks that are built with a purpose to operate together seamlessly and relentlessly. By allowing the transmission of data between any blockchain, Polkadot unlocks the potential of a wide range of use cases. Each blockchain has its advantages; by bringing all the blockchains to work together, Polkadot leads to the emerging of a new decentralized marketplace that overcomes traditional market drawbacks.
Can one blockchain be the potential solution for all the existing problems? It is obviously no. Each blockchain has its advantages, and it makes different trade-offs to support specific use cases. So there is an increased need for data transactions between these blockchains.
Polkadot, a sharded blockchain, allows various networks to process the transactions parallel by connecting them. This exchange of data is made possible without any compromise in security. More chains make more possibilities for innovation.
A single blockchain cannot expect the things like cross-chain computation and cross-chain registries in a single blockchain. But Polkadot is a multi-chain application environment that makes these possible. The blockchains can be of any type, and it might be open, permissionless, private, or permissioned. A permissioned blockchain needs approval to be a part of it, but the permissionless chain allows anyone to participate. A private blockchain is an invitation-only blockchain owned by a single governing entity. Unmindful of the kind of blockchain, Polkadot allows you to transfer the data.
Now you can relentlessly get permissioned data from a private chain and deploy it on a public blockchain. The blockchains, the oracles and technologies yet to be created can be connected. Polkadot is a decentralized web that put users in control. The trustless transfer of information between independent blockchains networks is possible via Polkadot’s relay chain.
Polkadot empowers and encourages innovators to build perfect solutions for existing problems. Polkadot makes it easier for them to create Dapps (decentralized applications) and services without violating the trust. Speaking structurally, parachains and parathreads are a network of heterogenous blockchains that are connected to and secured by a relay chain. And bridges connect them with external networks.
Polkadot is being built on Substrate. Substrate is nothing but a framework that offers you everything to build your own blockchain, building a blockchain is made ‘easier’ with Parity Substrate. Crafting custom logic is easy and thus the entire process of building a blockchain is faster and safer. Since DeFi finds its place in modern finance, an increasing number of DeFi teams are building the Polkadot ecosystem on Substrate, such as MANTRA DAO.
The Connection Of Dots In Polkadot
Relay chain: The relay chains are the essential thing in the Polkadot ecosystem. Relay chain makes the network of blockchains secured. Also, relay chains are responsible for cross-chain interoperability and consensus.
Parachains: Parachains are sovereign blockchains with their native tokens and optimized functions for serving a specific purpose. In simple words, every blockchain is a parachain.
Parathreads: The parathreads are very similar to parachains. But the significant difference is parathreads are based on a pay-as-you-go model. There is no continuous connectivity in the network, which makes it more economical.
Bridges: Bridges, as the name speaks, allow the parachains and parathreads to connect and communicate with eternal networks like Bitcoin and Ethereum.
Polkadot's Enhanced Security Model
The validation of blocks in a blockchain depends on the consensus mechanism of the network. The Proof-of-Work (PoW) and Proof-of-Stake (PoS) mechanisms allow the blockchains to compete with each other over resources when it comes to the network’s security. Unless the network creates a community for supporting the network through the validation of blocks, the blockchains can be easily attacked. In Polkadot, the blockchain networks are connected, and thus the security features are aggregated and applied to all. Right from the first day, the developers can protect their blockchain by clicking on Polkadot.
Transparency And On-Chain Governance Through Polkadot
The protocol update or any such decision-making process happens fork-free by the Polkadot’s governing capability. Polkadot allows the DOT (Name for Polkadot’s token) stakeholders to involve in the decision making of the network. So, the process never gets halt due to lack of an idea. The governance process used in Polkadot is accountable and transparent.
The DOT token holders can participate in tabling proposals, bonding, and voting. Polkadot is developed so that the governing mechanism of one parachain is not affected by the other. The parachains enjoy complete freedom when it comes to the usage of their mechanisms for governing.
What Are Parachains?
A parachain is an application-specific data structure, especially blockchain in Polkadot, that is globally coherent, and the validators of the Polkadot relay chain can validate them. There is no compulsion that a parachain should always be a blockchain. The name parachains means parallelized chains. These parallelized chains (parachains) run parallel to the relay chains. In Polkadot, the transactions on parachains are processed parallelly, whereas the traditional blockchain systems allow only a single transaction at a time. This ability to process transactions simultaneously enhances the scalability of the system.
A collator, a network maintainer, maintains Parachains. The collator maintains the full node of the parachain. It retains information from the parachain and produces new block candidates to pass to the validators for verification. The collators are incentivized with the native parachain token for their service of retrieving and inclusion of data in the shared state of Polkadot.
Parachains have their economies for their tokens. Also, the transaction fees are implemented by choice of parachains, and Polkadot never forces the parachains to decide on the validity of transactions. If a parachain orders collators to pay a minimum fee to be valid, the relay chain will enforce this without any hard and fast rules against the parachains. Parachains do not have any compulsion to own native tokens. If the parachain owns a token, it can decide the tokens’ economic case, and Polkadot will never interfere.
There is no doubt that Polkadot is a project with great potential for mass adoption. Polkadot further enhances the current state we are in with blockchain. At Advertik, we highly believe that blockchain will change many industries, such as e-commerce, and further develops the web overall. The more blockchain projects built on the Polkadot ecosystem, delivering this revolutionizing technology, the more we’ll see a decentralized future in many aspects. We believe the current blockchain market is just a tiny proportion of what’s to come in 2021 and beyond when looking at its adoption and value to different markets. One thing is clear; it’s going to be very exciting to watch its development in the upcoming years to come!