Polkadot (DOT): overview, technical features and prospects of cryptocurrency

Polka dot (DOT) – a cryptocurrency platform, after the launch of which investors immediately appreciated the technological solutions and prospects of the project. Therefore, its tokens quickly took their rightful place in the top by capitalization.

At the moment, the developers of the cryptocurrency Polkadot have already managed to implement much of what was planned. The team announced a decision to launch decentralized bridges to other blockchain networks (including Bitcoin and Ethereum). Although the platform is not fully ready to demonstrate its functionality, it is an option for investing for a long time.

DOT price movement chart:

Polkadot: history of creation

The author of the coin is Gavin Wood– one of the developers of Ethereum. Wood developed the Solidity language for writing smart contracts in the Ethereum blockchain and the EVM (Ethereum Virtual Machine) virtual environment.

The main disadvantage of ether is the low scalability of the cryptocurrency (a small number of operations per second). Overcoming this disadvantage is the main reason for the appearance of Polkadot (Dot). For this reason, Wood left Vitalik Buterin’s team in 2016 and founded his own company.

The white Paper of the project appeared in 2016 . In October 2017, an ICO of the project was held, during which it was possible to raise more than $ 140 million in three months. On cryptocurrency exchanges, the coin appeared on free sale in 2020. Now its capitalization is ~ $ 35 billion. The success of the ICO was so impressive that some users began to call half a block the “Ethereum killer”.

The coin token is called DOT, and Polkadot is an environment for the development of projects in its blockchain on the Substrate platform.

Technical features of Polkadot

The operation of the blockchain network is based on the PoS (Proof of Stake) algorithm. It is its application that ensures high transaction speed. The user can receive coins for performing one of 4 functions: validator, nominator, collator or fisherman.

Validators confirm new blocks, and also entrust their development to nominees. Nominators are essentially coin miners. Collators store full versions of nodes (nodes) of the main blockchain and independent blockchains attached to it (they are called parachains) of third-party developers.

Parachains are being developed on the Substrate platform. They provide a high transaction speed, which reaches 1000 operations per second. For comparison: this value for Visa cards in practice is 1700. Ethereum has approximately 15 transactions per second. More than 250 decentralized application projects are currently running on the platform. These are cryptocurrency exchanges, games, crypto wallets, solutions for the free exchange of one cryptocurrency for another (for example, bitcoin for Ethereum) and many other developments.

Such a system ensures high network security.

Another advantage of Polkadot is the low (compared to Ethereum) transaction cost.

Mining and DOT staking

Rewards can be received for staking – storing coins on a special account. At the same time, the coins are “frozen” and it is impossible to perform any actions with them.

The PoS algorithm does not need video cards or powerful hardware for mining. It is enough to install a set of special programs on a personal computer. Such mining, as in the PoW algorithm, is technically impossible.

How to buy and sell Polkadot

Now the coin can be freely bought or sold on cryptocurrency exchanges. In particular, trades are carried out on the largest cryptocurrency exchange Finance. The current price (September 2021) is approximately $32.

You can buy coins both by exchanging for other types of crypts, and for fiat money.

Where to store

Special cryptocurrency wallets are used to store Polka dot (as well as other types of cryptocurrencies). They can be hardware (in appearance resembling a USB flash drive), browser-based or installed on a stationary or mobile device in the form of a software application.

Polkadot: Cryptocurrency prospects

Analysts consider Polkadot a promising cryptocurrency that is under active development. Its main advantage is the high speed of transactions, thanks to the use of the PoS algorithm.

At the same time, the high volatility of all types of cryptocurrencies and the associated risks should be taken into account. In the next two years, Ethereum is expected to switch to PoS, which may disavow the main advantage of the DOT coin.

Besides Ethereum, the coin has other serious competitors, for example, Cosmos.

Published: 23 September, 2021