In this video, we’ll be taking a deep dive into the polkadot project protocol, a framework that allows for interoperability between a lot of blockchains. I think that is super fascinating.
So in this post, I’ll be talking about how polkadot works, what
- relay chains
- para chains
- what fisherman
have to do with a polka.as well as the benefits that polkadot can bring to the entire cryptocurrency space.
My name is Kierin. And I’ll be your guide on your defi adventure. The space is filled with hacks, scams people out there trying to grab your money away from you. And I want to be your map and compass to make sure that you reach your goal of financial independence.
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What is polkadot though?
Well, polkadot is a project by the web3 foundation and it acts as a framework to allow developers to build and to join the blockchains with each other.
It creates interoperability between blockchains. So it’s actually super exciting because at the moment, if you’ve got a token or using a dapp in a certain blockchain, you cannot actually interact with a dapp or a token on another blockchain because of using different technology stacks that. Different types of blockchains that just can’t communicate with each other.
Polkadot will make this possible as polkadot facilitates, cross chain communication and interoperability by connecting multiple blockchains and unifying the network. Thus unifying the whole cryptocurrency space. What is also super interesting is that polkadot was built by the ethereum co-founder Gavin woods, Robert Habermeier, and Peter Czaban, who is the technology director of the web 3 foundation. So, exciting team, exciting project all in all, and I think this will bring a lot more adoption as the network effect is going to be a lot higher. Thanks to the interoperability of the blockchains with each other that allows for a lot more growth.
Polkadot doesn’t actually want to be a competitor to third generation block chain, such as ethereum 2.0 or Cardano
it actually wants to be an enabler and allow these projects to communicate with each other. Let’s have a look at how polkadot works underneath the hood. So polkadot is a global network, acts like a protocol of interoperable chains. It allows for Charlotte blockchains.
Here are some of the most important characteristics of the polkadot project.
So the first one I already mentioned before is the interoperability between blockchains.
And the second one that is super important is the horizontal scalability.
What that actually means is that you can have many things, chains that are also interoperable between each other, that would run in parallel.
The great thing is should one chain have a much too high workload, is overloaded through many smart contract calls or too many transactions happening on that chain. Well, basically it can offset a lot of these calls or transactions onto other chains that are running in parallel, and since they’re interoperable, it can actually increase the scalability of the network. Governance on polkadot works for the community that can propose and vote for decisions that impact the network’s future.
A big vote happened on the 21st August where the denomination changed one polkadot became a hundred polkadots. So the circulating supply of polkadots changed by a factor of 100. That was done thanks to the governance model. A vote took place, there were different options. There was a 10 X increase as a circulating supply, a hundred X increase of the circulating supply and the fast next, and the voters decided on the a hundred X change for the circulating supply. It went from 10 million to 1 billion.
Let’s talk about the architecture of Polkadot.
The main ingredients are the relay chain, para chains and bridges, which are super important. Relay chains actually provide the security to that attached para chains. A very important difference between the way that polkadot taxes transactions, and the way that ethereum does it, is that polkadot has a flat fee regardless of the number of operations.
Whereas with ethereum you’re going to pay a fee for every transaction and also smart contract code. There are some main advantages and disadvantages to the flat transaction fee. The main advantage is that allows for much higher scalability. The main disadvantage is that people can easily spam the network.
para chains is nothing other than existing or future blockchains that are connected to the polkadot protocol. It allows for a lot more scalability, horizontal scalability, because you can have many para chains that are running side by side for the same blockchain. The easy way to explain what the bridges are late in the name entails is actually a connection between blockchains with smart contract capability.
So basically you can use a bridge to connect the ethereum blockchain with the polkadot protocol and allow for interoperability with other smart contracts, blockchains.
So polkadot has four major network participants and those are validators nominators collators and fishermen.
Now these names might seem a bit abstract, so let’s start with the validators. Validators are very similar to many other proof of stake blockchains. They allow for blocks to be finalized. And in the case of a polkadot zone, the blocks are finalized on the relay chain. So I won’t go into the technical aspects about being a validator, the same with, ethereum 2.0 You have to add a stake (lock up coins) in order to become a validator.
And you can own the rewatch by staking DOT in this case on the polkadot protocol. So correlators maintain a full node of their respective parachain. So basically they’re in their own blockchain. They send all the necessary information to create a new block and execute transactions. You can compare collators with miners in a proof of work blockchain.
So what they basically do is they move transactions from the output queue of the source parachain, one blockchain to the input queue of the destination parachain. And this allows for a lot of interoperability between different blockchains. The nominators contribute to the security bond of a validator.
You do have some risk. If you do that, basically if the validator acts maliciously, you can lose your security bonds or if the validator is is good you can earn some return on investment. So basically to making sure that all the validators are good in the network, you’re voting for different validators.
Fisherman types of bounty hunters. They actually look for malicious behavior during the block offering process. And if they catch a malicious behavior, they actually get a reward for that. And they have to deposit a certain amount of funds, but they can withdraw at any time that’s just to prevent sybil attacks. That’s a type of attack on a network.
So let’s talk about the possibilities of polkadot para chains. We can expect the number of super interesting chains to pop up as soon as the network flourishes a lot more. So you can have general purpose chains with eWasm smart contracts, edgeware, Charlie cherry Testnet, Chasper on substrate. You can have transaction chains, allow people to send transactions to each other with monetary value.
Just blink network. You’ve got oracle chains such as chainlink. They get real world data, which is put into code and fed to smart contracts that allows for price feeds and allows for weather data on smart contracts and a lot more real world data. Identity chains. Like the name says it allows people to have an identity and account people to connect with different blockchains or dapps.
So you’ve got an example here, specleOS, Filestorage chains, which would allow you to store a data on that particular chain in a decentralized manner, data creation networks that connects all file storage chains into created a data sense that would allow you to filter through many different datasets on decentralized data curation.
You can maybe imagine that all of data stores on the file storage chains and it could be searched thanks to a data curation network. ocean protocol is an that example for that. You can have chains for internet of things that would allow machine to machine communication, which is going to be huge in the automobile industry,
financial chains that allow you to hold all your assets in one portfolio, instead of in separate blockchain portfolios,
zero knowledge chains, which would allow for transactions or smart contract calls to happen without some third person knowing what the amount is of the transaction, to who it’s sent to, or what the smart contract is about. This is great. However, no work has been done on this yet. But it’s a future possibility. There’s are many companies working on several of these chains, the polkadot ecosystem is growing at a fast pace.
Here you have an…
Overview of the current polkadot ecosystem
as you can see, it’s already massive. There are many companies working on different aspects of the polkadot ecosystem. There are many creating wallets valdators, forums, explorers, substrate based chains. You’ve got the bridges that would allow for the interoperability between many different projects, the privacy chains, internet of things, machine to machine communication.
You’ve got robonomics. You’ve got the defi space, which is still relatively small, Oracle gaming, data scaling and other. So there are way too many projects for me to cover in this video. But if you’re interested, leave it down below and I’ll start looking at a few of these projects because I’m interested in everything cryptocurrency and everything defi. So this does look super exciting and I’m looking forward to what’s going to happen in the future with the polkadot ecosystem. There has been also some great news with Polkadot and Switzerland. WEB3 foundation granted Swisscom blockchain to secure the polkadot network.
And that is a great, happy to see one of Switzerland’s maine companies working close with polkadot, ensuring that polkadot is more secure. That was it for this video. Hope you enjoy this deep dive into the polkadot project. If you’ve got any questions, leave them down below any suggestions, feedback. I appreciate all the comments that I receive.
With that said, I wish you a fantastic day and I’ll catch you in the next video. Have a good one. Bye bye.