Wednesday, January 19

Polkadot’s quest to become the last word in blockchain technology


Polkadot (DOT) 284% price increase in the last 12 months is extraordinary when compared to conventional market indices such as the S&P 500 (13.1%) and the JSE Top 40 (15.9%).

Along with Cardano (ADA), DOT has been hailed as an ‘Ethereum killer’. The fact that it has underperformed Ethereum (ETH) and ADA in the last 12 months is seen by some as a sign that the DOT may be slow in exiting the starting blocks, but it is likely to be a powerful finisher. All three are vying for dominance in emerging ‘smart contract’ networks that are redefining the way we transact, invest, and share information.

Smart contracts are pieces of computer code that allow people to securely transact in a “trustless” environment. For example, you can already borrow money at relatively low interest rates on decentralized finance applications (DeFi) using your crypto assets as collateral. No credit check by a bank clerk, no KYC (Know Your Customer) obligations, and in many cases, they don’t even ask for your name. Smart contracts also allow you to buy insurance without a broker and get paid without a company employee interpreting the fine print of the contract on your behalf. Soon, supply chains, purchase orders, and a host of business transactions will depend on smart contracts running on the blockchain, with no middlemen like lawyers and brokers extracting fees and creating inefficiencies.

Source: Revix

This is the space that Polkadot aims to dominate. It seeks to become the blockchain of blockchains, allowing one blockchain to communicate with another.

So what is Polkadot (the name of the network) and DOT (the currency used to transact on the network)?

Brett Hope Robertson (BHR), investment analyst at Revix, is available to help us solve this problem.

What is Polkadot and what is it trying to do?

BHR: It is designed to allow transfers of any type of data or assets through different blockchains, so its appeal is its interoperability with all other blockchains, most of which were not created to communicate with different chains of blocks. For example, the Bitcoin blockchain serves a completely different purpose than the Ethereum blockchain and is not designed to allow the free flow of information or assets between the two. Polkadot is designed for exactly this. And while Ethereum has some great features, it does have a critical shortcoming in its ability to scale. Polkadot has very smart functionality that allows it to scale and handle large transaction volumes, up to a million per second, which is where you need to be if you want to be taken seriously in your quest to become the backbone of the new emerging financial system. .

Polkadot is led by Gavin Wood, who was the former chief technology officer for the Ethereum project. He left Ethereum with a clear vision in mind and the goal of correcting the mistakes that plagued Ethereum in its early stages of growth. Ethereum is currently trying to overcome some of its design flaws that resulted in network congestion and high ‘gas’ fees, through the Ethereum 2.0 update, but Wood wanted to develop a technology from scratch that would allow for massive scale changes. and protocol without disrupting the core network.

Should we be excited about that?

BHR: There are many people who are excited about this, and the proof of this is in the price of DOT, which has risen 284% in 12 months. That is by no means a spectacular performance in terms of crypto, but it is still quite impressive. We are now looking at a largely three-way race between ETH, ADA and DOT to see who comes to dominate this space. I would not dismiss the DOT as a dark horse in this race.

How does Polkadot work?

BHR: It is designed to link other networks. As things stand, developers have to choose which blockchain to build applications on. Each chain has its own strengths and weaknesses that developers must weigh when deciding where to develop. Polkadot solves that problem by enabling cross-chain interoperability and also solves many other problems, such as excessive use of electricity for mining tokens and, more importantly, the inability to transact at speed and instantly scale the network. There is an elegant architecture behind all of this, but the bottom line is that developers can build applications and choose which parts of the Polkadot technology they want to use and which parts they don’t. This gives them the flexibility to choose those parts of the Polkadot network that suit them and steer clear of those parts that do not.

At the end of the day, the user doesn’t really care what kind of technology is used. Consumers want to know that they can transact safely and quickly, without having to switch between different networks. Think of the mobile phone users hopping between the MTN and Vodacom networks without ever knowing which one they are using. That is what Polkadot aims to achieve in the financial arena. It will open up a world of possibilities that are hardly conceivable today.

How to invest in Polkadot?

BHR: Revix just launched DOT as a standalone cryptocurrency. If you buy in the next week (September 3-9) and pay in GBP or ZAR, your purchase will not be subject to fees.

Revix.com now offers Bitcoin, Ethereum, Uniswap, Cardano, PAX Gold, and USDC as standalone cryptocurrencies. Plus a USDC Savings Vault, similar to a savings account.

In addition to this, Revix offers ‘packaged’ products that give you balanced exposure to these crypto sectors:

  • The Top 10 package, which distributes your investment equally among the 10 largest cryptocurrencies, measured by market capitalization;
  • The smart contract package, which spreads your investment equally among the top 5 smart contract cryptocurrencies; and
  • The payment package, which distributes your investment equally among the top 5 cryptocurrencies focused on payments.

Should Polkadot be part of a diversified crypto portfolio?

BHR: Diversification is always the smart thing to do when investing. Without giving investment advice, do a little research on smart contracts and Polkadot, and form your own opinion on what the future holds. I think if you see a future for smart contracts and blockchain technology, it might be worth including some Polkadot in your crypto portfolio.

About Revix

Revix brings simplicity, confidence and excellent customer service to the investment. Its easy-to-use online platform enables anyone to securely own the world’s top investments with just a few clicks. Revix guides new clients through the registration process to their first deposit and first investment. Once configured, most clients manage their own portfolio, but can access support from the Revix team at any time.

For more information please visit www.revix.com

This article is intended for informational purposes only. The opinions expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, nor is it a solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose and, before investing, consider your level of experience, your investment objectives, and seek independent financial advice if necessary.

Presented by Revix.

Moneyweb does not endorse any product or service that is advertised in sponsored articles on our platform.


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