One of the most prominent blockchains in the entire cryptocurrency industry is Polkadot. But what is the hype all about? So, we are here for you who are not much aware of this term. Let’s take a look at our comprehensive guide to finding out all about Polkadot.
If you have any idea of the cryptocurrency world, you must know it revolves around blockchain technology. Blockchain technology operates separately in silos. Polkadot intends to create an interoperable blockchain that will be for the decentralized web. So, let’s take a look.
What Is Polkadot?
The founder of Polkadot is Gavin Wood, and it is nothing but an open-source protocol. Wood observed that there are tons of blockchains moving in the crypto world that cannot communicate to others. So, he thought of supporting all these chains in a single network. So, the Polkadot project intends to eliminate the slower communication process and increase the data transfer speed.
In a nutshell, you can think of Polkadot as something that connects one blockchain to another. We are not talking about the blockchain of Bitcoin here because that operates solely, but the other blockchains that can’t work alone. So this project will help users build a blockchain with the substrate framework and handle its security and transactions.
What Are The Features Of Polkadot?
There are many features of Polkadot that make this platform an exciting project to look forward to. The features are;
Several blockchains are doing a commendable job running alone, like Bitcoin and Etherium. However, with this feature of Polkadot, lone blockchains like BTC, and ETH will connect to the DOT network. So, these popular networks won’t have to choose a single network that offers the best connection to them.
2: Relay Chain
It is the central hub that monitors the communication between parachains and the DOT network. It has a hub and spoke structure that offers several benefits to the smaller blockchains attached to this network. The relay chain is solid and safe and ensures seamless connection to similar other projects.
Some independent parachains are running on the top of relay chains. The job of the parachains is to exchange information with the relay chain as fast and as quickly as possible.
The job of paraheads is similar to the position of the parachains. However, the only difference is that paraheads is a version exclusively available for developers.
The substrate tool in Polkadot makes the blockchain building process much more manageable. It helps the teams cast less concentration on the building process and more attention to adding value to the project. The dual-enabling technology in substrate is powerful and is a significant reason why people choose the Polkadot project.
6: Host Platform
The host platform is one of the best features of the Polkadot project. It has excellent security and fast transaction speed. In addition, it allows people to leverage the strengths of other networks to make the core of their blockchain strong enough.
What Are The Risks Of Polkadot?
Polkadot solves two of the most striking problems of the cryptocurrency world: lack of scalability and transaction security. But, there are several risks in Polkadot too. Let’s have a look at them now;
- One of the most significant risks of Polkadot is its vast market competition. It is indeed that Polkadot is innovative in its approach, but the fundamental thing is that it creates connections between other chains. Several other platforms do the same, with different twists in their approach. Some of the biggest competitors of Polkadot are Avalanche, Cosmos, and Polygon, etc.
- The architecture of the relay chain is a potential risk for Polkadot. The relay chain is the central hub, and to join it, other networks have to bid for a space in a slot auction. The auction can have several dire consequences if not done the right way, which will upset the whole project.
- Polkadot is not immune from the cyber hack, and in fact, it suffered from a major hack in 2017 only. There were several vulnerabilities in Gavin Wood’s platform, which is why it lost more than $150 million that year. Apart from financial loss, the hack also spoiled its business reputation, so it will be tough to attract users now.
How To Buy Polkadot?
Despite its potential risks, some people are still out there who have not lost faith in this innovative platform. So, if you want to buy DOT, there are a few steps that you can follow;
Step 1: Create Your Account
Log in to your Binance account, and if you don’t have one, then create an account. Once you have logged in, you can see a buy crypto option at the top. Now, select your preferred currency option from the right corner, and choose a payment method.
Step 2: Pay The Amount
Once you choose your preferred payment method, a payment screen will pop up in front of you. Next, click on the asset that you’d like to purchase from the coin option. Now, enter the currency amount.
Step 3: Buy The DOT
Now, click on the buy option. Once you click on it, you will need to verify your identity. Then, just provide some basic information about you, like your name, contact details, etc. Of course, you also need to submit a valid ID proof there.
Step 4: Complete The Process
When you have verified your identity, you’ll need to complete the process. First, you need to enter your credit or debit card details and click the pay now button. When it verifies your information, you can see the DOT deposited in your Binance purse.
Polkadot is indeed a successful project, and it even became the 4th largest cryptocurrency platform in a brief period. Now, it is facing some challenges to win over its competitors and build its market reputation again. However, if it continues its efforts like in previous years, it will be more successful shortly. If you have any more query against Polkadot, please post them down in the comment box.