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Newbie Quest: Understanding Polkadot (DOT)

I was talking a few days ago with a friend of mine and he told me that he made a big investment in Polkadot. At that moment I was "what the hell, another crypto-currency with a strange name?!?!". I've never heard of this before, so I decided to do some research and if I manage to understand it, I will write a post. So, here I am with a new post from my mini-series Top 100 crypto-currencies

As I said in the above introduction, today's episode is going to be about a new crypto-coin that I personally like a lot - Polkadot. It is a crypto-coin that is among the top 10 crypto-currencies and today, I will present you what Polkadot is, what is does, who is team behind this successful project, how many coin are currently on the market, what is the maximum supply, what is the daily volume, what is the price of a coin, what was the All Time High and the All Time Low etc. Let's the post begins!

 

What is Polkadot?

Polkadot is a blockchain interoperability solution, between different types of blockchains, any type of data, for any type of blockchain. Polkadot is a network protocol that allows the transfer of arbitrary data, not just coins or tokens on blockchains. Polkadot can transfer data through public, open and without permissions blockchains, but also private blockchains.

Any type of data across any type of blockchain. Polkadot is a network protocol that allows arbitrary data – not just tokens – to be transferred across blockchains.

This means Polkadot is a true multi-chain application environment where things like cross-chain registries and cross-chain computation are possible.

Polkadot can transfer this data across public, open, permissionless blockchains, as well as private, permissioned blockchains.

This makes it possible to build applications that get permissioned data from a private blockchain and use it on a public blockchain. For instance, a school’s private, permissioned academic records chain could send a proof to a degree-verification smart contract on a public chain.

Why Polkadot is so popular right now?

Polkadot is built on a novel blockchain framework known as Substrate, which is widely regarded as being simple to build on, thanks to the dozens of composable modules that blockchain architects can use for building their solutions.

It uses a combination of the relay chain (Polkadot’s main chain), parachains, and bridges to connect the blockchain ecosystem into a cohesive, interoperable unit. 

Developed by Parity Labs, Substrate is completely open-source, allowing developers to build on, ensuring builders can create their decentralized applications for the Polkadot blockchain with even limited budgets. 

 

Substrate imbues Polkadot with a range of features that make it the ideal platform for building DeFi solutions on, including: 

Speed: Polkadot has a block time of just six seconds and most transactions are considered final after less than a minute. This makes it ideal for building applications where speed is critical — like decentralized exchange (DEX) platforms. 

 

Scalability: Polkadot can currently handle more than 1,000 transactions per second (tps), compared to just ~25 tps for Ethereum at its peak under ideal conditions. According to Polkadot’s founder Gavin Wood, this could eventually reach as high as 1 million tps, with the use of sharding and optimized parachains. 

Interoperability: Arguably Polkadot’s biggest advantage is its interoperability. This means applications built on Polkadot and its parachains can easily interact with those on other blockchains (including Ethereum). Producing the first interoperable DeFi ecosystem. 

 

Taken together, these features, and the breakneck pace of Polkadot’s development have positioned it as a potential launchpad for the future of not just DeFi — but potentially the crypto industry as a whole. 

I will now talk about those who founded this project, better said about one of the founders, about Gavin Wood.

Gavin is one of the co-founders of Ethereum with Vitalik Buterin. He is also the creator of the programming language that is used to build applications that are based on the blockchain of Ethereum. We are talking about Solidity, as a programming language. He is a very respected man in the crypto-industry and he managed to gather with him a team of professionals, people who have studies at Oxford and Cambridge and have been involved in extremely important projects in the market. I consider a very important factor for a project to have a quality team, a team of people who have been part of the history of successful projects. That's about all I can say about the team.

The Polkadot project was launched on the 26th of May 2020. I will talk about Polkadot numbers now. 

The total number of coins in circulation right now is a bit over 900 millions DOT, out of a Total Supply of 1,038,893,374 DOT. 

The Trading Volume from the past 24 hours is approximately $3 billions and the total value of the Market Cap of the project is worth $15 billions. 

The All Time High happened just 12 days ago, on the 16th of January 2021, when DOT's price was $19,32. The All Time Low was just a few months after its launch, on the 20th of August 2020, when a DOT was worth $2,69. 

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We see that DOT had a spectacular growth in only 5 months, which is sort of "wow" for a relatively new coin. Equally spectacular is the fact that the project managed to reach the top 10 crypto-currencies in an extremely short time. Many projects have hardly reached this top.

For these reasons, I think that Polkadot will climb higher. I think that in maximum 1 year it will reach a better position. I trust this project.

Currently, Polkadot is registered on more than 80 exchanges, the most important from them all are Binance, Kraken, Bithumb, Hotbit, MXC.COM, Paribu, Bitfinex, KuCoin, Hoo etc. 

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Broadly speaking, this is everything that anyone should know about Polkadot. The fact that it has a very strong team behind the project, they also have capital and I think they will be very useful in the future as the market begins to be dominated by decentralized exchanges. Moreover, the fact that on their own platform cannot be transferred only crypto-currencies and data is also important to mention. For example, it can be used for all kinds of businesses and I think that this is where the focus is now and not necessarily just on crypto-currencies. The focus is more oriented on business development, as we are talking about health, oil and gas, real estate, notaries, doctors and so on. There are a lot of industries where Polkadot definitely makes its presence felt and will be useful.

 

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