Polkadot is another blockchain project that has attracted attention among users of the crypto community. This initiative uses a heterogeneous multi-chain technology that allows different blockchains to interact with greater security and performance. It has an ambitious objective, to reshape the current Internet structure making it completely decentralized, what they call Web3.
Polkadot System: Connection between blockchains
At present, there is already a large number of blockchains, although we are still at a very young age for technology, which suggests that the true development and use of the network will be seen in the years to come. New projects continue to emerge and one after another, and important companies also begin to use this revolutionary technology. There are banks, for example, that are creating their own solutions that involve private blockchains in order to keep their data in trusted hardware. However, each of these blockchain can only send data and assets within its own network. And this is a great limitation that is currently being attempted through centralized exchange platforms, which are the most used mechanisms to transfer values between networks.
What Polkadot does is allowing interoperability between very different blockchains, including encrypted authority test chains suitable for internal business networks (provided they confirm certain specifications). In the case of banks, for example, they could verify a transaction in their private network and subsequently publish it in the Ethereum network. Or for example, insurance companies could, through public blockchains, assess the damage caused by a certain weather event and pay their share with a token.
Polkadot also allows to have multiple public chains interacting and taking advantage of the functionality of each one.
An optimal security system and enviable performance
Polkadot separates two vital components of a blockchain network: state transition and consensus.
Let’s think again about the Ethereum blockchain. The state transition is controlled by the ethereum virtual machine (EVM), whereby the status is updated through applications that make changes to smart contracts.
The consensus part means that once some data is written in a smart contract, the change must be sent to everyone on the network so it can be added to the chain.
In order for the status update and the guarantee that the transition to be valid require a great computational work. On the other hand, the consensus part is not computationally difficult, however, it requires communication and transmission information to other nodes.
By separating these two functions, Polkadot will allow the decentralized ecosystem to grow and allow projects to be built on the progress of other projects. It will help secure these applications and accelerate performance on these networks. All this is great for users to adopt cryptocurrencies and decentralized applications (dApps).
Polkadot has chosen GRANDPA (GHOST-based Recursive Ancestor Bypass Prefix Agreement) as its original consensus for a safer and more resilient network.
Polkadot’s network is divided into three layers: Parachains, Relay Chain and Bridge Chain.
Parachains are the parallelizable blockchains that make up the network. They are customizable so that their structure can be developed by making it fit better with the application for which it will be used. These blockchains can control their own government and provide scalability by allowing transactions to be parallelized, that is, transactions can be distributed among the different blockchain. These blockchains are connected and secured by the Relay Chain.
The Relay Chain serves as a connection between the different parachains that form the Polkadot network. In addition, it provides them with security and transmits the information between them whether they are transactions or any other data.
Bridges chains are a type of special parachains that allow communication between Polkadot and independent blockchains.
Roles of the participants
Polkadot also divides the participants into 4 groups: the Validators (validators), Nominator (nominators), Fisherman (fishermen) and Collator (collectors).
- Validators: They have the most critical role of the ecosystem, defining the blocks in the Polkadot network. They receive candidate blocks from the collaborators and finalize them in the relay blockchain through a deterministic selection process and a final round of ratification validation.
- Nominators: They are also participants of the network. However, their job is not to finalize blocks but they work as a mechanism to select reliable validators. For this, they give back their link to a select validator bonus. His work is simpler but important, as it helps strengthen the combined security of the relay chain.
- Collators: This group does not work directly in the security blockchain, it does so at the level of parachains. Their job is to collect the transactions of the parachains, generate a test along with an unsealed block and send it to the appropriate validator who has to finalize the parachain block. According to the white paper of the project, its role can evolve, forming a close collaboration with the validators through a contract to verify blocks of certain parachains.
Collators also provide an additional layer of security to the network. To do this they must demonstrate the malicious behavior of the validators. In a way, their work could be compared to the work of miners in a blockchain that implements the PoW algorithm, such as Bitcoin.
- Fisherman: Your job is not related to the block verification process itself, but is to keep the network secure. To do this, look for malicious behavior and notify the validators about candidates with unfair behavior. To motivate this group they are rewarded extraordinarily when they demonstrate that a related party broke the rules and acted maliciously.
Polkadot uses a communication protocol between chains that makes standardized communication possible. The communication is totally asynchronous between parachains, or even, when they communicate with the relay chain.
In addition, those blockchains that have not been connected as parachains but that are “bridged” can also communicate. You have access to the standardized network intercom and can maintain your own consensus. However, not being connected as parachains are not part of the shared state and do not benefit from the security guarantees of the Polkadot network. Ethereum will be the first and a good example of a bridge on this platform.
Dot is the token of the platform and has 4 purposes to fulfill in it that are: network governance, operation, linking and interoperability.
- Governance: in Polkadot the control over the protocol and the benefits that this entails is granted to the operators of the relay chain, that is, the holders of the DOT token.
- Linking: DOT allows joining parachains. These parachains remain ‘linked’ to their DOTs and cannot be ‘detached’ or eliminated until the end of the established period.
- Operation: it consists of the ‘game theory’. It is a mechanism used to encourage token holders to behave honestly, rewarding good actors and bad people lose their participation in the network, while maintaining the security of the network.
- Interoperability: Although not required, it can be used to pay fees to send messages between blockchains.
The total supply of the Polkadot token is set at 10,000,000 DOT. Currently, its price is $151 USD although it is not available for purchase (at the moment).