What is Polkadot?

Polkadot’s whitepaper was released on November 14th 2015 and was created by Gavin Wood, who was also one of the co-founders of Ethereum. 

One of the main reasons that Gavin left Ethereum is that the upgraded Ethereum 2.0 was a long way off and Gavin wanted to accelerate what he saw as the next version of Ethereum. 

What is Polkadot?

What is Polkadot Used For? 

Currently there are a number of different blockchains all operating in isolation. Polkadot is designed to use what’s known as cross chain interoperability. This will essentially allow all blockchains to both operate and communicate freely in the Polkadot network. 

As a result of this interoperability, Polkadot is being called the internet of cypto, similar to the traditional internet, where everything in it is interconnected. 

Relay Chain 

The relay chain is the cornerstone of the Polkadot system, it is used as the main communication base between all Polkadot parachains. 

Parachains 

Parachains operate as separate blockchains that will function in tandem with the relay chain. Once accepted, each of these parachains will have a specific purpose on the Polkadot network. These could include stable coins, DeFi (Decentralised Finace), IoT (internet of things), identity verification, smart contracts or digital wallets.  

The total number of parachains allowed on the network is currently limited to around 100, any Polkadot project  wishing to become a parachain will have to compete via a public auction to gain a place. 

Bridges 

The bridge is a special type of parachain, these are used to connect to other blockchains that are already operating, and bring them in to the Polkadot ecosystem. This is crucial as it allows tokens to me moved between Polkadot and other blockchain networks such as the top 2 cryptocurrencies – Ethereum & Bitcoin.

    Polkadot Crypto

    DOT 

    Polkadot’s first token sale was completed on October 27th 2017, which raised a total of 485,331 ETH ($924,815,703 in today’s money – March 13th 2021). DOT is the native token used in the Polkadot network, it has three main uses, governance, staking and bonding. 

    Governance — holders of DOT can vote on system upgrades and whether or not new features are implemented. 

    Staking – DOT holders can stake their tokens as either a validator or nominator and earn rewards for doing so. 

    Bonding — Parachains are both added and removed by bonding or unbonding tokens using a form or Proof of Stake. 

    Current Price & Circulation 

    At the time or writing Polkadot is $37.69 per DOT (13th March 2021), with a total market capitalisation of $34,660,186,613 and a total supply of 1,056,019,885 DOTs.  

    DOT’s all time high was $42.06 giving it a market cap of $38,701,312,159 (over 38 billion dollars)! 

    Conclusion 

    Polkadot is driving and pioneering the 3.0 era for blockchains. Its goal of creating an interoperable ecosystem is truly revolutionary. When multiple different blockchains can communicate and transact with each other using Polkadot, it will change cryptocurrency forever. 

    Polkadot is available to buy now on Binance, OKex & Kraken so check out the best crypto exchanges here.

    Also Ledger recently released an update, so that you can cold store Polkadot safely on either your Ledger Nano S or Nano X, find out more on our Best Crypto Wallets page.