What Is Polkadot (DOT)?

Polkadot (DOT) has quickly become one of the most prominent digital currencies in the industry, backed by an impressive blockchain platform. It’s a platform that encourages a global network of computers to run a blockchain. This platform allows unrelated blockchains to interact with each other without an intermediary.

This blockchain platform’s name plays a significant role in the idea of what this platform actually does. Users will see what looks like a tapestry of dots when on the platform. Each of these dots figuratively represents the multiple blockchain platforms present today. And it highlights their separation from each other.

Cryptocurrencies can be confusing for some, with different platforms working on similar technology in isolation. While the individual dots represent these cryptocurrency platforms, Polkadot (DOT) helps to connect all these platforms or dots.

The Polkadot (DOT) gives holders a say in the direction of the blockchain project. And the token also allows holders the opportunity to stake their DOTs and earn.

Who Created Polkadot (DOT)?

The Polkadot (DOT) platform was founded by one of the co-founders of Ethereum, Gavin Wood, in 2016. He was assisted by Peter Czaban and Robert Habermeier. Gavin Wood has been an integral part of the Ethereum platform, developing the language programmers use to design decentralized applications.

Gavin Wood was one of the first CTO of the Ethereum Foundation and previously worked at Microsoft. In October 2017, the platform raised about $144.3 million through its Initial Coin Offering. The platform officially launched on May 26. 2020. Its open-source code is maintained by the non-profit Web3 Foundation.

How Does Polkadot (DOT) Work?

To work more efficiently, the Polkadot platform was designed to work on two different blockchains. Their primary network is a so-called relay chain, where transactions are permanent. The user-created network, on the other hand, is called Parachain.

At its core, Polkadot is simply a blockchain network that works on the proof of stake concept. It uses this concept to connect all other blockchains. The relay chain and the various Parachains that exist on the network work together to connect these different blockchain platforms.

The Polkadot (DOT) network essentially works similarly to the Hub and Spoke model. That is, there is a central hub and many different branches that branch out from that hub. In the Polkadot platform, the relay chain is the hub that forms the basis of the network. This is where the different Parachains come to reach a consensus.

Since the Polkadot platform uses a proof-of-stake concept, the validators in the network must deploy at least 10,000 DOT tokens. This ensures that all validators are financially invested in the platform’s future. All validators reach consensus directly in the relay chain.

The various blockchains and decentralized applications are given their own unique use cases using Parachains. These Parachains are the heart of the model. They administer their own use cases and then connect to the Relay Chain to synchronize. Parachains ensure that everyone on the network is secure and on the same page.

This concept of shared security is what makes Polkadot unique and popular. The technology behind this platform makes Polkadot robust and adaptable.

Is Polkadot (DOT) a Good Investment?

Analysts and investors see Polkadot (DOT) as an inevitable evolution of digital currencies. The platform improves blockchain technology with its interactive platform. Polkadot (DOT) offers a scalable business model with many growth opportunities. When there’s growth, the value increases significantly, making DOT a good investment.

More and more developers are considering the Polkadot platform. They aren’t only linking their blockchains through the network but also creating new blockchains. When developers move to new technology, many investors follow them. Polkadot trades for less than $10, making it a more enticing buy than Bitcoin or Ethereum.

The Polkadot (DOT) platform also rewards its investors. As an investor, you receive access to management rights over the entire platform. Even though this technology comes with some risks, your investment will pay off in the long run since it’s still relatively new.