Polkadot is a blockchain network consisting of many interconnected and integrated blockchains. This blockchain is designed to be a multi-chain or multi-chain decentralized network, where a small network within it can interact freely.
Blockchain is a technology that enables digital transactions without intermediaries. Blockchain can be used for a variety of applications, from cryptocurrencies, smart contracts, digital identities, to the internet of things.
What is Polkadot and how does it work? What are the benefits and advantages of Polkadot compared to other blockchains? How can Polkadot become the connected and unified blockchain network of the future? Let's look at the explanation in this article.
Understanding Polkadot
Polkadot is an open-source project founded by the Web3 Foundation. It is a non-profit organization that aims to facilitate a decentralized web, controlled by its users, and to simplify the creation of new applications, institutions, and services.
Polkadot was built by five teams and more than 100 developers, including Dr. Gavin Wood, co-founder of Ethereum, Parity Technologies, and Solidity. Polkadot is a blockchain network consisting of four main components, namely:
Relay Chain
This isthe heart of Polkadot, tasked with creating consensus, interoperability and shared security across different blockchain networks.
Parachains
independent blockchains that can have their own tokens and are optimized for specific use cases.
Parathreads
Parathreads are similar to parachains, but with flexible connectivity based on a pay-as-you-go economic model.
Bridges
allows parachains and parathreads to connect and communicate with external blockchains such as Ethereum.
Token DOT
Polkadot uses DOT tokens as a medium of exchange on its network. DOT has three main functions, namely:
Governance
DOT token holders have complete control over the protocol. They can propose, vote on, and implement changes to the network, including code updates and fixes.
Staking
PHolding DOT tokens can maintain network security and earn rewards by depositing DOT. Polkadot uses a nominated proof-of-stake (NPoS) model designed for maximization of decentralization and fair representation.
Bonding
New parachains and parathreads are added by depositing tokens. Obsolete or useless parachains and parathreads are removed by deleting deposited tokens. This is a form of proof of stake.
How Does Polkadot Work?
Polkadot is a connected and unified blockchain network, which enables cross-chain transfers of any type of data or assets, not just tokens. Polkadot provides the ability to interoperate with various blockchains within the Polkadot network.
To understand how Polkadot works, we need to know some basic concepts, such as:
Substrate
It is a framework that allows developers to create custom blockchains easily and quickly. Substrate provides various features and modules that can be tailored to developer needs.
Substrate also allows blockchains to connect to Polkadot and gain interoperability and security from day one.
Consensus
Consensus isa mechanism used to reach agreement among network participants on the valid and up-to-date state of data. Polkadot uses two types of consensus, namely BABE (Blind Assignment for Blockchain Extension) to produce blocks, and GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) to finalize blocks.
Validators
Validators are pAra network participants are responsible for depositing DOT tokens, validating blocks proposed by parachains, and participating in consensus. Validators are randomly selected and alternate to handle different parachains.
Collators
They are the network participants responsible for collecting transactions from parachains, creating candidate blocks, and providing them to validators for validation. Collators are usually affiliated with specific parachains and help maintain their performance and security.
Nominators
Nominators are network participants who are responsible for depositing DOT tokens, selecting reliable validators, and earning rewards according to the performance of the validators they choose. Nominators help improve network security by encouraging good behavior from validators.
Fishermen
This is network participants who are responsible for monitoring network behavior and reporting fraud or errors committed by validators or collators. Fishermen were rewarded if their reports proved correct. Fishermen can come from parachains or relay chains.
Polkadot uses a mechanism called Cross-Chain Message Passing (XCMP) to facilitate communication between parachains and parathreads. XCMP enables secure, reliable, and efficient data transfer between multiple chains. XCMP can also be used to send tokens, smart contract calls, or other data.
Polkadot also uses a mechanism called Horizontal Message Passing (HMP) to facilitate communication between parachains and relay chains. HMP allows parachains to send messages to relay chains, for example to participate in governance, staking, or bonding.
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Read also:
What is Blockchain 1.0? A Blockchain Starting Point
Understanding Public Blockchains
What is Blockchain 3.0? Blockchain Always More Up to Date
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