The “Internet of Blockchains” business is becoming increasingly saturated as time goes on. There are numerous competitors in the space, and choosing which ones to invest in isn’t getting any easier. There are two strategies you can take: choose the one you consider the best fundamental long-term bet among the many and invest in that; or put money into all of them with the assumption that at least one will take off.
Assuming you want to go the more selective route, we’re going to go into some detail about Polkadot and what you need to know about them.
The main problem that a company like Polkadot is addressing is there are no singular blockchains. If the blockchains can’t connect with each other then you basically have a bunch of different networks operating at once, but no ability to combine them.
Therefore, the primary goal of Polkadot is to maximize interoperability. Ideally, they will be able to enable applications and smart contracts to seamlessly interact and transmit data/assets between chains.
The Polkadot ICO was billed as a huge deal when it was executed as a crowdsale in October 2017. This was just around the time that the markets were hit their peaks, and since then, we have obviously seen considerably less interest in the ICO markets.
What Makes Polkadot Different?
As we mentioned at the beginning, the goal is to find ways to differentiate these companies so you can best invest your money. Scalability is the most common problem that companies have encountered in the blockchain space, and Polkadot has a unique solution.
Basically, Polkadot runs tons of blockchains in paralell, and refers to them as “parachains”. These parachains are connected by relay chains and “bridges” connect all these parachains back to the main chain. The result is an exponential increase in processing speed that allow for faster transactions, as well as many more of them.
The network functions using a DOT token, which has several uses. First off, it forms the mechanism for governance in the Polkadot community. All decisions are made based on votes and the staking of DOT tokens. Additionally, the ecoystem becomes more secure due to the downside risk of losing your DOT tokens if you act maliciously.
Investing in Polkadot
One other big point in Polkadots favour is the community they’ve constructed. Not only are they home to a massive open source community that believes in their mission, but they have at least 12 “friends” (the term for other blockchain companies) in the top 100, including OmiseGo, Melonport, Zcash, and GridSingularity. This allows them to harness these communities as well as their own in their quest for growth/scaling.
Normally we would talk about buying prices, but Polkadot isn’t currently trading on any markets. The good news is, as we wait for the Polkadot network to be launched in the third quarter of 2019, you can do your due diligence and decide if you want to get in. One thing to point out is that there is another token with the ticker DOT, and you shouldn’t confuse this with Polkadot’s token.
The remainder of their tokens will be released with the genesis block. There are planned to be 10 million DOT tokens, with 3 million going to the web3 foundation and 2 million having already been sold in presale. Now is the time to do your research on Polkadot and other Internet of blockchain companies, and then pull the trigger on the who you think will do the best job of allowing chains to communicate with each other at scale.
Featured image courtesy of Shutterstock.