Polkadot (DOT)

What is Polkadot? Well, to put it simply, Polkadot helps blockchains communicate with each other.

Created by one of the co-founders of Ethereum, Polkadot facilitates the transfer of data and assets across multiple blockchains. It means blockchains can share information with each other. This is called a “cross-chain” transfer.

Why do we need Polkadot?

The crypto space is full of independent blockchains all running on their own. They don’t share information or interact with each other, for the most part. Polkadot wants to improve this system by making a fully interoperable blockchain. That means it aims to have all blockchains and decentralized apps connect with each other.

Example:

Imagine you make a bet with your friend and set up a smart contract on the Ethereum blockchain to pay out the winner. However, you want the payment to be in bitcoin.

Bitcoin can’t do smart contracts so you can’t just set one up on Bitcoin’s blockchain. So you do it on Ethereum, but the problem is that the Ethereum and Bitcoin blockchains don’t interact with each other.

Through the Polkadot umbrella, you could set up this smart contract and it would allow this communication to happen. Once the Ethereum-based smart contract has the necessary data, it could trigger the payment on the Bitcoin blockchain.

What makes Polkadot Unique?

Polkadot is essentially a multi-blockchain network allowing information and assets to be passed around different blockchains easily. It means that decentralized apps and services can be created with ease and allow them to use many blockchains. This opens up the door to many possibilities within the decentralized apps and services space.

In addition to this, Polkadot solves scalability issues. Thousands of transactions can be processed on multiple blockchains at once running parallel to each other on “para-chains”.

Polkadot is often referred to as the internet of blockchains because, like the internet that connects all websites, Polkadot connects all blockchains.

You can trade Polkadot’s cryptocurrency, DOT, on major crypto exchanges.