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What is Polkadot (DOT)?
Polkadot is a scalable heterogeneous multi-chain. Polkadot allows new designs of blockchains to communicate and pool their security while still allowing them to have the entirely arbitrary state-transition functions. Polkadot is a network that connects blockchains. Provides a framework under which new blockchains may be created and to which the existing blockchains can, if their communities desire, be transitioned- Pooled security- Trust-free interchain transactability When it comes to the blockchain, the level of enthusiasm often exceeds any doubts. For example – if any blockchain is a specific unchangeable chain, how can I transfer my data to another blockchain? The answer is – there are no ways to do it. That’s why Polkadot was created.
History of Polkadot
The official website says that it is «a multi‐chain technology». Speaking simply – it is a network that connects blockchains. It creates space where data from different blockchains can be operated and exchanged fast and securely. And the important thing is – without any system-wide upgrades or hard forks. It is the goal of this project.
The mission of Polkadot is to change the existing internet structure into Web3: a completely new and decentralized web. Polkadot helps to connect private and public blockchains and other networks in the Web3 ecosystem. It enables the internet where independent blockchains can exchange information and trust-free transactions via the Polkadot. It is really a project of the future – the digital world, the internet of things, and web decentralization.
The idea was presented by Gavin Wood, co-founder of Ethereum and founder of Parity Technologies at the end of 2016. Then, in mid-2017 Web3 Foundation was created, which manages the project, together with Parity Technologies. In October 2017 the successful ICO was performed. We will tell you about it later, but you can check DOT on COIN360 to know the actual situation with this token if you wish. Last but not least from the general information – Polkadot’s Genesis block will be launched only in Q3 2019. That’s why some information below has no confirmation, except theoretical.
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What is the Polkadot ecosystem?
The token in Polkadot ecosystem is called DOT. It has 3 main functions.
- Governance. DOT owners have full control over the protocol. The ecosystem has no miners and use proof-of-stake algorithm so holders manage all exceptional events such as protocol upgrades and fixes.
- Operation. The system uses game theory and rewards those DOT owners who behave in honest ways. Cheaters will lose parts of their stake. This principle make system stays secure.
- Bonding & Payment. Tokens give possibility to add new parachains or to remove non-active ones.
Another important thing about DOT tokens is that there is no information about limits. Yes, the whitepaper says that investors can buy 5 millions from total 10 millions DOT. But there are no words – «there will be only 10 millions tokens and no new tokens will be created». So the risk of price inflation may appear.
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