What You Need To Know About Polkadot

What You Need To Know About Polkadot

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Polkadot is a relatively new cryptocurrency project that was first founded in 2016 by Gavin Wood, and launched under its current model in 2020. Due to its various advanced technology, it was quickly recognized as one of the best and most innovative platforms in the industry.

Here are a few interesting facts about Polkadot:

  • Fast Growth – The native coin of Polkadot is DOT. As part of the ICO, Polkadot originally put 10 million DOT tokens into circulation and raised $145 million. There is no hard limit on the total supply. New DOT tokens are continually released into circulation, at a predetermined inflation rate of 10%.
  • Interoperability – One of the defining features of Polkadot is its interoperability. It has a primary blockchain called the relay chain, and several connecting chains named parachains. This unique framework is what allows Polkadot to connect to different networks and pass data securely between blockchains.
  • Scalability – One of the other main features of Polkadot is its scalability. Its unique framework also makes it easy for users to build new custom blockchains, and then integrate them into the cryptocurrency ecosystem. It also makes it easy for users to help grow the Polkadot network in a quick and secure fashion.
  • Fast Transactions – Due to its parachains, Polkadot can process 1000 transactions per second. This is much faster than the Bitcoin framework which allows 7 transactions, and the Ethereum framework which allows 30. As the network expands, it could potentially support 1,000,000 transactions per second.
  • Governance – Polkadot operates based on a proof-of-stake (NPoS) model that requires participants to use coins as collateral. It is managed solely by Polkadot token holders who have complete control over how the protocol works and evolves. Holders are given one of 4 roles – validators, collators, fisherman, and nominators. Together they ensure a high level of stability and security.
  • Energy Efficiency – Polkadot reported that it consumes less energy than other conventional blockchains. According to research, Polkadot has one of the lowest carbon footprints when compared to other blockchains operating on a proof-of-stake (NPoS) model.

Polkadot is an interesting project that is both unique and highly innovative. It’s worth keeping an eye on the network which, due to its scalability and interoperability, could have many potential applications in the future.

In terms of investing, Polkadot is a very accessible cryptocurrency. Its current low cost ($7.17 at the time of writing) means that investors can consider DOT as a potential investment, and whether it would help them grow their overall portfolios. For more information about investing in cryptocurrencies, check out our other articles.

Risk Warning: The information in this article is presented for general information and shall be treated as a marketing communication only. This analysis is not a recommendation to sell or buy any instrument. Investing in financial instruments involves a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both an increase and a decrease in capital.

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