What Is Polkadot (DOT)?

Polkadot (DOT) is a platform that allows different blockchains to “work together under the protection of shared security.” Described as a “united network of machines”, Polkadot’s technology aims to lower entry barriers for autonomous economies that are working cooperatively within the platform’s security infrastructure.

Polkadot Provides “Economic” and “Transactional” Scalability

Any type of asset, data, or token may be transferred between independent blockchains by using Polkadot’s interoperability features. According to Polkadot’s official website, the Polkadot network aims to provide a high level of “economic” scalability by allowing the same group of validators to verify transactions on multiple blockchains.

The Polkadot platform also offers “transactional” scalability by processing transactions simultaneously via multiple parallel blockchains. Developers can use Polkadot’s blockchain-building framework, called Substrate, to launch their own blockchain “in minutes.” 

Connect Blockchains to Polkadot for Improved Security and Interoperability

After creating a blockchain, users may connect it to the Polkadot network, in order to take advantage of the platform’s interoperability and security features. According to its developers, Polkadot’s technology is easy to use, which could potentially attract more users to the platform.

As a “truly resilient” network, Polkadot can quickly adapt and update its platform without forking. New technologies can be easily integrated into Polkadot’s infrastructure. 

Using “Pooled Security” to Secure Multiple Blockchains 

As explained, Polkadot’s “pooled security” feature enables the same group of validators to secure multiple blockchains. A newly launched blockchain can potentially benefit from the same level of security that protects older and more established blockchain networks.

Polkadot Stakeholders Have Same Privileges As Miners On Proof of Work Chains

Updates to the Polkadot platform are managed through an open and on-chain governance model. As noted on its website, Polkadot’s governance system reflects the “values” of its community members, and it ensures that upgrades to the platform are performed consistently. 

Network participants who hold Polkadot’s DOT token may exercise control over decisions related to the platform’s protocol. DOT token holders, also known as relay chain operators, have the same type of privileges that miners might have on proof-of-work (PoW) networks.

Bonding Specialized Blockchains to Polkadot

Bonding (DOT) tokens may be used to add specialized blockchains (called parachains) to the Polkadot network. Bonded parachains must remain attached to the Polkadot platform until their lease period ends. 

According to Polkadot’s developers, parachains have their own governance model, a unique set of characteristics, and specialized use cases. In order to build highly scalable platforms, “interactions” on parachains are “processed in parallel.”

Incentivizing Network Participants to Act Honestly

The Polkadot network relies on game theory principles to ensure that its network remains safe and secure. The platform’s stakeholders are incentivized to act honestly – as they may receive compensation for their good behavior. Meanwhile, bad actors will lose their stake and control over the Polkadot network.

Empowering Individuals By Giving them Full Control Over Personal Data

As mentioned on its website, the Polkadot network has been launched as an open-source project by the Web3 Foundation. The foundation aims to create a “serverless” internet and a decentralized web.

Instead of giant corporations like Facebook and Google controlling user data, the Web3 Foundation wants to empower individuals by building solutions that will allow them to control their own “data, identity, and destiny.”

Connecting Public and Private Blockchains

The Web3 Foundation has reportedly commissioned more than 100 application developers and five different teams to create and maintain the Polkadot network. Since the past two years, the Polkadot team has been working on various technologies that enhance interoperability between private or consortium blockchains and public, permissionless chains.

The developers of Polkadot are also planning to integrate oracles and other Web3-related technological developments into the shared security platform. In order to receive feedback and help from its community members, the Polkadot team has launched an “Ambassadors Program.”

Working Closely with Leading Web 3.0 Developers

By serving as Polkadot Ambassadors, the platform’s community members may receive “early access to bounties”, and the funding required to conduct educational workshops and host meetup events. Ambassadors will also be able to work with the leading contributors in the Web3 space. 

Addressing the Limitations of Existing Blockchains

Authored by British computer programmer Gavin Wood, the Polkadot whitepaper notes that existing blockchains are plagued by scalability and extensibility problems. According to the whitepaper, the consensus architecture of current distributed ledger technology (DLT) platforms has various limitations. 

The paper’s abstract states that Polkadot’s developers aim to introduce a heterogeneous multi-chain architecture, which provides scalable security and interoperability. In order to build scalable systems, Polkadot’s technology employs the divide-and-conquer approach to enabling security by incentivizing “untrusted” public nodes to secure the network.

Integrating “Divergent” Types of Consensus Systems

As mentioned in its technical documentation, the heterogeneous nature of Polkadot’s framework allows it to integrate “highly divergent” types of consensus systems in a “trustless” and decentralized “federation.” This approach allows permissioned and open networks to have “trust-free access” to each other’s platforms.

As stated in the Polkadot whitepaper, the network aims to offer backwards compatibility with “one or more” established blockchain networks (like Ethereum). One of the main goals behind the development of Polkadot include creating a system that can “achieve global-commerce levels of scalability and privacy.”

Polkadot Token Sale Seeks $1 Billion Valuation

In early June 2019, Polkadot’s management successfully closed a private sale of 500,000 DOT tokens – although a few sources claimed that only 70% of these tokens were actually sold to investors. 
According to The Block, Polkadot’s token sale was on track with a $1.2 billion valuation (estimated by the Wall Street Journal). However, reports from Coindesk revealed that three Chinese funds had committed to investing $15 million in Polkadot’s DOT tokens. These investments would not be enough to reach Polkadot’s valuation target of $1 billion.