There are many different blockchains in the world, such as Bitcoin, Ethereum, Solana, etc, so it’s difficult to choose whether you should invest in Polkadot or some other similar projects. Read on to find out how Polkadot is different from other crypto projects and whether you should invest in Polkadot now.
So all of the cryptocurrencies mentioned above solve specific tasks, covering different areas of activity. One of the main problems that does not allow mass distribution of the blockchain in the world is that these blockchains practically cannot interact with each other. They lack what is called "blockchain interoperability." This is exactly what Polkadot is trying to solve and such ambitions make investing in Polkadot attractive.
In simple terms, Polkadot is a blockchain protocol that connects different blockchains. This is a platform where already existing blockchains are created or integrated and data can be exchanged quickly and securely between networks.
The developers of Polkadot implemented the ability to create networks of other projects based on their blockchain. Such derivative networks are called parachains or parallel chains. These are independent blockchains with their own tokens and the ability to optimize the functionality for specific tasks and project needs.
Just as the Ethereum network is said to be created to improve and replace Bitcoin, the Polkadot network is one designed to improve Ethereum (fun fact: Polka’s founder was the co-founder, first CTO and main developer of Ethereum). However, despite all the competition among currencies the leadership board remains stable and each new project finds its place under the sun and serves as a boost for the general development of crypto.
Polkadot has recently been in top 10 crypto coins by market cap, but as of May 2022 it’s in the 11th place, which is a good opportunity to invest in Polkadot today. Why? Simply because it has a very good intrinsic value and can easily replace such hype projects as Dogecoin, which currently takes the 10th place.
Polkadot was created by Gavin Wood in 2016, when he left Ethereum because it didn’t meet his expectations. He wrote the code for the first version of the platform and, in fact, he created the Solidity programming language, which is used for all smart contracts on the Ethereum network. A Polkadot investment at the time of the ICO would have brought you 157% to this day or 1280% at max.
The network's native token is called DOT and it has three main functions:
Governance. Token holders are in complete control of the protocol, with privileges that on other platforms are assigned to miners. Determining the structure of transaction fees, decisions to change the protocol, adding or removing parachains, and so on.
Staking. By design, Polkadot rewards DOT token holders who play by the rules. Validate the Relay Chain in good faith or nominate their tokens to good validators.
Bonding. In essence, this is a freezing of tokens in exchange for something useful. Staking is also in some way bonding. But it can be, for example, freezing DOT tokens to get a parachain slot.
As for questions like ‘Where can I invest in Polkadot?’ and ‘What is the best way to invest in Polkadot?’ you can buy it on all crypto exchanges and from a limited number of brokers. But very soon in Gainy, too!