What Does Polkadot Mean?
Polkadot is a sharded blockchain protocol that lets multiple blockchains communicate and work together efficiently, allowing them to split heavy workloads and prevent bottlenecks. At its core, Polkadot protocol is a translation architecture that allows users to combine, decentralize, and scale blockchains as needed. Since networks comprised of a single blockchain are limited in the number of transactions they can process in a set period of time, they were impossible to implement into real-world applications without the use of Polkadot.
Polkadot works by connecting multiple blockchains into a single network called a Relay Chain, forming a web of single-unit chains that can be used to run specific tasks without running out of computational power. Connected, blockchains do not work separately, but as a larger, more complex unit. This allows a single Polkadot relay chain to process multiple transactions simultaneously. And instead of off-network communication between individual blockchains, the Polkadot relay chain is closed and secure, isolating the data exchanged between individual chains from unauthorized access and manipulation.
Blockchains—regardless of their type or configuration—in a single relay chain are able to communicate and transfer and exchange any type of data with one another. Anything from preexisting files such as cryptocurrency and data for analysis to extracting data from real-time events such as the stock market values.
Additionally, Polkadot is decentralized and entirely transparent when it comes to management. All individuals participating in a Polkadot relay chain have a say in how the network is managed and their decisions are made public to all other members. That makes Polkadot particularly useful when it comes to managing blockchains that carry sensitive data or play a significant role in high-stake decision-making.
Techopedia Explains Polkadot
Polkadot protocol is what allowed blockchain technology to move from small-scale projects to larger, real-world applications. Previously, each blockchain worked independently. If the demand for one increases to where a single chain could no longer handle the influx of transaction requests, there would be a correlative increase in wait-time and transaction fees.
But with Polkadot’s decentralized model, blockchains can be utilized by various people to suit fluctuating needs, from software developers to established enterprises. Additionally, Polkadot is highly flexible and scalable as it supports forkless, on-chain upgrades, allowing teams and individuals to quickly and efficiently scale their blockchain and add new features.
It is important to note that Polkadot is not independent like individual blockchains. Instead, it is simply the network protocol that heterogeneously connects them. It cannot exist on its own. To function properly, Polkadot protocol relies on three elements: connectors, consensus roles, and governance roles.
- Connectors – The connectors are the components that form a Polkadot network and are what holds and transfers data through the network. They are the Relay Chain, Parachains, Parathreads, and Bridges.
- Consensus Roles – Consensus roles are the foundation protocol of Polkadot that enables it to connect multiple blockchain networks and cryptocurrencies together. Consensus roles consist of Nominators, Validators, Collators, and Fishermen.
- Governance Roles – As the name suggests, this is how the stakeholders, or owners, of one or more Polkadot relay chains, govern and control it. Since Polkadot is decentralized and everyone has a voice, the governance roles consist of elected Council Members and a Technical Committee.
Perhaps, the biggest of Polkadot’s contribution to blockchain technology is ensuring the future of Decentralized Finance (DeFi). That is because Polkadot is the first of its kind to offer a completely decentralized network, all whilst allowing for cross-chain communication and strong data encryption, all of which are essential when it comes to finances in general and DeFi goals in particular.
In fact, there are multiple DeFi projects that used Polkadot protocol as their foundation such as Acala, Moonbeam, and Centrifuge. While its beginning stands strong in the world of online finances, Polkadot is expected to be the catalyst to entirely decentralized internet and applications as a whole, where the resources are controlled by users instead of a select few.