After the official launch of the Polkadot network, the market value entered the list of the top ten cryptocurrencies.
In terms of market value, Polkadot has become the sixth largest blockchain, surpassing EOS, and is regarded as a competitor of Ethereum. Some supporters believe that it will rank among the three largest market capitalizations in the near future.
Proponents of cryptocurrency have noticed the emerging challenger in the field of Crypto assets, and the Polkadot (DOT) blockchain has recently become a leader. However, many people have never heard of Polkadot before, but now many people want to know why this Crypto currency can be among the top ten.
Polkadot was conceived by the co-founder of Ethereum, Dr. Gavin Wood, and completed the project in four years. Polkadot was first issued during the (ICO) period and was one of the three blockchain protocols (Dfinity, Filecoin). According to the white paper of the Polkadot project, this protocol is a kind of network blockchain.
The white paper further details: “Polkadot is a next-generation blockchain protocol that connects dedicated blockchain networks so that they can operate on a large scale.” “It connects multiple chains in a single network together. , So that they can process transactions in parallel, and realize data exchange between chains under the premise of security assurance.”
Essentially, any type of data can be run in Polkadot’s multi-chain environment, such as real assets and tokens. Any blockchain can join the Polkadot infrastructure, which is basically a collection of validators using heterogeneous fragments.
The three main components of the Polkadot protocol include relay chains, parachains and transit bridges.
Heterogeneous sharding has been discussed in the blockchain development community for a long time. Fragmentation can basically reduce the workload (data) processed by the node, so the node essentially has its own data fragmentation. Each shard is shared between the network of nodes. Like traditional sharding technology, the network provides interoperability between multiple chains, but heterogeneous sharding allows each chain to remain unique.
The Polkadot network consists of three main parts, including the main relay chain (Polkadot blockchain), the parachain and the transit bridge. The secondary chain is composed of heterogeneous blockchain fragments, and all content is protected by the main Polkadot relay chain.
The secondary chain can cast the local token, transmit the token and connect to the external chain through the transfer bridge. The transit bridge uses Polkadot sharding to communicate with blockchains such as Ethereum (ETH) or Bitcoin (BTC). For example, the mezzanine plan is called at startup, and the tokenized BTC product is called “PolkaBTC”.
“Interlay released a proof of concept for the untrusted bridge from Bitcoin to Polkadot: BTC Parachain,” the Interlay team detailed. “Once online, users will be able to mint 1:1 Bitcoin-backed assets onto Polkadot (the so-called PolkaBTC) and use them in a wide range of applications, including decentralized exchanges, stablecoins and loan agreements. “
Since Polkadot was first announced, many people have been waiting for the project to start. Spartan Black, a Crypto asset fund based in Asia, believes that one day Polkadot (DOT) will become the top three contender in market capitalization.
“Within a year, DOT will become the Crypto currency with three major market capitalizations,” Spartan Black wrote on Twitter recently. Polkadot is “the most important crypto project since the launch of Ethereum in 2016.”
Spartan Block also wrote:
In the absence of an upgrade in Ethereum, Polkadot can be regarded as ETH2.0.
In addition to all the publicity, there are many criticisms of the Polkadot project. Tom Shaughnessy, the co-founder of Delphi Digital, wrote an article about Polkadot’s commitment and also involved some issues with the project.
Shaughnessy emphasized that the birth of Polkadot actually originated from the desire of Ethereum member Gavin Wood to implement sharding immediately.
Just recently, Polkadot released a version of a decentralized exchange (dex), which was built for cross-chain and auction plugs.
Delphi Digital executives also pointed out that Parity, the parent company of Polkadot, also has “troubles.” Shawnee also elaborated on “the possible obstacles to voting on Polkadot”, because Polkadot’s 6 to 24 council members (which may become less and less over time) will cause the Polkadot network Too much centralization risk.
At the time of issuance, in terms of market value, Polkadot (DOT) is already the sixth largest blockchain, because the DOT transaction price has exceeded 4USDT per coin. Market data shows that there are currently more than 852 million DOT in circulation, and the total value of the project is 3.6 billion US dollars.
Seven-day DOT/USD chart on September 23, 2020
On September 23, more than 80% of the DOT was exchanged (USDT). This is followed by currency pairs such as BTC (13.4%), USD (1.9%), TWD (1.2%), EUR (1.2%) and BUSD (0.7%). On Wednesday, Ethereum (ETH) transactions accounted for only 0.65% of DOT transactions.
People find value in DOT because it promises to provide interoperability among many blockchains, and it also demonstrates the benefits of sharding.
Although the Polkadot project has been conducting research for many years, it has just started and it still has a long way to go to catch up with many cross-chain competitors. Many cryptocurrency supporters also don’t like sharding, and they believe that the process will eventually lead to loopholes.
For example, a research paper published by Cornell University explained that blockchains are connected through “sharding”. This means that the node may be damaged, and the leaked data may cause serious and permanent losses.