- 25. August 2020
- Posted by: Dopplersaufer
- Category: BitCoin, Blockchain, Cryptocurrency
Polkadot – Connecting the dots…
…or in that case, the Polkadot blockchains. THE most powerful feature that has the possibility to change the world is the cross-blockchain transfers of any type of data or asset. That means, all kind of data and asset and not just mere tokens!
This could be the gamechanger that a lot of companies waited for which also means it´s a technology that can be applied in almost every business vertical. By connecting the DOTs so to speak, Polkadot enables total interoperability betwen a huge variety of blockchains.
It´s on of the most prominent problems a lot of developers face. Migration from old to new and in our case migration from one blockchain to another. As Chainlink imports data from real life backends, DOT sends the data to another blockchain, making it usable for a diverse kind of applications. The development team is working hard and just a few weeks ago they released a testnet designed for sharding solutions as another proof of progress.
However, the interoperating service is just one of many that Polkadot plan to offer in the future.Thery already have achieved another milsteone by reaching a 3.5B USD market capitalization and that just 6 days after the team enabled DOT for transfers. Lets have a look at who are those people in such a powerful team which works on such an impactful technology
Who is behind Polkadot?
Polkadot has 3 founders
Dr. Gavin Wood – Co-Founder and CTO of Ethereum
Robert Habermeier – A former German core developer and partner at Hyperspere Venture
Peter Czaban – Technological director of Web3 Foundation
With such a founding team it´s easy to gain traction, attract additional team members and get the attention of venture capital money. At the moment, Polkadot is the self próclaimed the flagship project of the Web3 Foundation, which locates in Crypto Valley Zug in Switzerland.
Their focus is on developing the next levels of foundation towards a decentralized web. The Foundation currently employs a team of researchers and community administrators that are actively work on Polkadot as well. No wonder, the Foundation got founded by Garvin Wood himself and he was a co-founder or Parity Technologies as well…
Speaking of which. As for the acutal development, Web3 hired Parity Technoligies (PT homepage – https://www.parity.io/ ) develop the first implementations in Rust and JavaScript. However, Gavin Wood and Habermeier remain the core developers. Further developers, coders and software architects can be found Polkadots Github page (link). DOT was always an open source project, so anyone who is interested to contribute is free to do so.
Interlude: Are you a blockchain developer working on a decentralized web application? If yes, Web3 also offer grants for projects that fulfill a certain criteria, so if you work on a project that is somehow connected to the Web3.0 technology, you can get in touch with them here. https://web3.foundation/grants/
Why is $DOT important?
From the dawn of crypto-time in 2009 to today, blockchain interoperability was always a desired technology, but up till now just available with a boatload of problems and a huge effort. Polkadot are out to change this by building a framework that covers all blockchains.
Polkadot is a scalable multichain platform with low technological barriers. Currently, just 2 criterias need to be fulfilled. You can read about the technical details on their websites FAQ section. Polkadot serves as the basic level, the basic platform for autonomous economies to interact in a flexible manner.
The use cases later on will show you the real life use cases that are so important for a crypto/Blockchain project in these times. Without such use cases, a sustainable business modell would hardly be possible. This is a reason why many altcoins get caught in a pump and dump scheme because there is no intrinsic value, neither in the technology nor in the use cases. What is a solution worth if it doesn solve a problem? A question and many examples we currently see in a negative way in the DeFi hype.
Still thought, there are projectls like Interlay who intend to build a Polkadot to Bitcoin bridge AND is an interoperability project for decentralized finance (DeFi). With their DOT connection their project got leveled up significantly in terms of credibility. Source:
Polkadot $DOT crypto coin – The technology behind
I´ll try to reduce the technological terms to a minimum and try to describe the terms or simply use other words for easier understanding. If you are a developer, you won´t find anythign new in this paragraph.
A few terms we need to understand the Polkadot technology:
- Parachains: Think of it as the subsidiaries of the main Polkadot blockchain. They interact (achieve consensus as it is called) by using the mainnets consensus mechanism in a pooled security environment.
- Bridges: In opposite to Parachains, Bridges are the connectors to already existing blockchains, like Bitcoin or Ethereum.
- Sharding – Splitting up a chain
- Substrate — the technology powering Polkadot
- Node – is a validator for a transaction. And you can run one yourself and interact with the Polkadot testnet. Check the following 2 step process taken from the Polkadot website.
Speaking of the testnet, they named if Rococo, is intend to test DOTs sharding communication protocols. They are based on a consensus algorithm known as Proof-of-Authority, meaning there is an administrative entity in control. At the current stage, the goal is to implement cross-chain message passing,
A very recent incident needs to be adressed at this point.
Polkdaot in the news and the DOT Coin denomination change
Polkador need to re-evaluate their DOT coiins. The new DOT coin denomination is 100x smaller than the old DOT. There are no other differences than this. If you hold DOT in your wallet, than your DOT balance is now 100x higher and the price per DOT is 100x lower. The percentage of the DOT you own relative to total supply has remained unchanged and it will have no effect of the value of your coins
The decision to decrease the denomination was democratic and you can see the poll and a comment from Gavin Wood here https://polkadot.network/the-results-are-in/
A Tweet from Gavin Wood – quote
„As forewarned, some unscrupulous exchanges listed today rather than Friday – the Denomination Day agreed upon by the @Polkadot community. While we can’t control these CEXs, we can urge them to stop. Their actions are putting our community at risk.
Cooperations
Web3 foundation projects
The obvious one first. Gavion Wood is co-founder and investors to it´s just natural that all kinds of Web3 supported companies will be very open to cooperate with Polkadot as soon as soon as it becomes possible. Certainly that is true for all collab partners of Parity.io and pretty much every other company Mr. Wood has his influence on. His name value and his connection to the Ethereum network will be a huge door opener in the future when it comes to dealing with big international companies and a possible implementation of a Polkadot solution,
Chainlink (read about their analyses here)
In february 2020 Polkadot developers were able to access external data by using Chainlink’s oracles. Oracles are the key component of Chainlinks – real life data to blockchain technology. A collaboration with Chainlink could be the start of a relationhsip that can send tremors through the whole IT industry. I´ll elaborate in the use case section.
Kusama
Another one of Woods projects. At Kusama they use the network is an experimental development environment, or as they call it, a „canary in the coal mine’ platform. The idea is to built for change agents to take back control for blockchain developers . Build on the self-developed Substrate framework it shares the basic coding with the superior Polkadot blockchain. w
OAX Foundation
Based in HingKong, OAX Foundation announce a strategic initiative to build a parachain within the Polkadot network at the beginning of 2020. They offer DeFi opportunities and the collab is intended to expand the potential of trading on decentralized exchanges. OAX Foundation aims to remedy the limited utility of OAX ERC20 tokens by building OAX’ will build an own blockchain even with it´s on ERC20 utilty token and build their solution again with the help of the Substrate framework.
Cross-Chain Message Passing (XCMP)
More a subsidiary than a real cooperation partner, but worth to be mentioned anyway. It defines how messages can pass among Polkadots parachains by following the economic security of the relay chain. Read more about it here –https://medium.com/web3foundation/polkadots-messaging-scheme-b1ec560908b7
Use Cases
Blockchain
I already mentioned Chainlink in the cooperations section, but it is worth to elaborate further. The use case is that on Polkadot, Chainlink will be integrated with a dedicated parachain, the subchain if you will. Prachains will be the interoperable network to read data from the Chainlink shard to develop and support decentralized apps (dApps).
Example I: A supply chain company wants track the route of their goods. They send the real life data like postal codes, switches of transportation method or customs data in the blockchain and connect their chain with the one from the transport companies. This way a cross-blockchain connection is establish that is able to track a good from production in a foreign country to the final destination in a store somewhere else on the planet.
Example II: A government decides to go all out on Blockchain and feeds it´s native system with data from its citizens. Data like social insurance number, birth date or gender. However, they are also collaborting with the half-governmental public transportation company for which they need a link to exchange data, like on useage of public transport, rush hour prediction or however else to improve their serives and get feedback about the habits of the population in return.
Investment
Like with every other coin you can also trade $DOT on various exchanges. You can invest long or short time, and you are able to stake. However, staking Polkadots is not that easy at the moment. Get yourself informed about the topic which you can start to do here: https://medium.com/coinmonks/what-polkadot-validators-should-i-nominate-a638c180f2a0
You can also go for „offline staking“ which is explained here. https://cointelegraph.com/explained/offline-staking-explained
Polkadot price prediction – Polkadot price forecast
To evaluate a price in the future we need to look at the tokenomics.
We know that 50% of Token in auction and the majority of users have not sold there stake and they don´t seem to plan to sale soon either.You can calculate that around 25% which is about 300,000,000 to circulate as supply of DOT token for trading. As for Staking, according to Polkadot Scan around 400,000,000 new dots are in stake.
New very recent change of denomination makes it a little harder to put the finger on the exact price development of the DOT coin. Price predictions went up to over 2.000.- USD in the old version. The new version (x/100) is now more directed towards the 22.- USD level in the coming 5-7 years.
What we can say is that, Binance listed the new DOT on August 18, and the price instandly surged from around $2.1 to $4.1, a gain of almost 100%. Keeping in mind how early the DOT technology actually is and how far it can go in the future if accepted by the big players, another few hundred percent gain isn´t out of reach.
The long time sustainabel business model and the real life use case makes DOT a perfect coin to „hodl“. The chances are good that they are the first on the market with a full fledged interoperability solution that is scalable and flxible enough to withstand even to most complicated applications. A first price target is 10.- USD for new DOT and 20-30 as a second long term goal.
Conclusion
If Gavin Wood managed to get serious traction outside his conglomerate of blockchain ecosystem companies he owns or co-owns, DOT coin has a bright future ahead. His name should stand for quality and currently it´s still less controversial than the one of many other crypto personalities.
Their use cases are the ultimate weapn though and their importance shouldn´t be underestimated. As in the examples show above, the areas of impact are almost limitless and if even one or two big global players start to use a Polkadot chain empowered solution it could easily trigger a snowball effect. Certainly such an effect would also increase the value of not only the company but of their native $DOT coin as well.
The collab wir Chainlink makes it even more interesting as these two together have the chance to become the Apple and Microsoft of Crypto world, or more appropriately the Apple and Samsung. They just have to do it, and they have the teams and the financial support to execute.
Links:
Homepage: https://polkadot.network/
Reddit Profile: https://www.reddit.com/r/dot/
List of DOT supported wallets:https://wiki.polkadot.network/docs/en/build-wallets
Github – https://github.com/paritytech/polkadot/
Wanna swap Polkadot $DOT Coins? Do it here!