Is Polkadot ready to be woken up and follow the rest of the Ethereum killers?
In the past few weeks we have seen how many of the cryptocurrencies hailed as “Ethereum killers” are generating impressive returns. This was largely because Ethereum’s recent network upgrade did little to alleviate high transaction fees and network congestion.
Ethereum was a victim of its own success as higher network usage came with higher fees and slower transaction times.
Will Polkadot catch up with these “Ethereum killers” or is it just quietly building its empire in the shadows?
What is polkadot?
At the moment, blockchains fall into one of two main categories. They are either specially designed and designed for a very specific function – like Bitcoin, which was specifically designed as an alternative payment system and store of value.
Or they can be more open and general in how they work, and applied to a variety of applications like Ethereum or Cardano, which can be used to create decentralized applications (dApps) – which are basically just blockchain-based versions of regular apps. like the one you get on your phone.
On the other hand, Polkadot is a blockchain that provides an environment on which other blockchains, so-called “parachains”, can run. It essentially provides the infrastructure with which other blockchains can safely interact with one another.
Polkadot was developed with the aim of uniting an entire network of blockchains – from Bitcoin to Ethereum to all the other cryptocurrencies you’ve never heard of.
As things stand, developers have to decide on which blockchain they want to build their applications. Each chain is unique and has its own strengths and weaknesses that developers have to weigh up when developing. Ethereum, for example, has a large network that is robust and easy to use, but relatively slow and expensive. While competitors like Solana were designed to prioritize scalability.
The problem: blockchains cannot talk to each other
To understand what polkadot is and why it holds so much promise, we first need to outline one of the biggest problems in the blockchain and crypto space right now: blockchain interoperability. This is a fancy way of describing how blockchain networks communicate with each other.
Blockchains can’t really communicate with each other – which really limits the entire crypto narrative of “building the financial world from scratch”.
If you decide to develop on Cardano, you will not be able to interact with the Ethereum blockchain and thus lose the large ecosystem that Ethereum has to offer.
This is where Polkadot steps in to save the day and enable different blockchains to work together seamlessly and on a large scale. Polkadot allows developers to customize the specific features they want, giving them the flexibility to choose the parts of the Polkadot network that fit their project and stay away from the parts that don’t. Additionally, it allows your project to work across multiple blockchains so that you are not limited to just the blockchain on which you built your project.
Put simply, Polkadot acts as a framework for all blockchains that log in, much like the HTML programming language allows websites, browsers, and servers to interact with each other. The idea is to take care of messy and costly cryptocurrency mining processes (including transaction validation and security logs) and allow developers to focus on building blockchain-based apps.
Ready to go?
After last month’s highly anticipated Ethereum upgrade, many hoped it would solve the problem of Ethereum’s high transaction fees, but all evidence points to the opposite. With Ethereum’s high fees and network congestion still unresolved, many Ethereum competitors, or “Ethereum killers” as they are known, gained momentum in August.
Ethereum is clearly feeling the pressure – in the past five months we’ve seen Ethereum lose over 20% of its dominance in the smart contract crypto category. This means that for the first time, developers are not only looking for alternatives to Ethereum to build their apps, but also actively using them faster and faster.
The chart below shows how Ethereum and its competitors have fared since their all-time highs in May.
From the “Ethereum killers” we can see that Solana has outperformed and gained over + 99% since its previous all-time high, while Polkadot is the worst performer as it is still -39% below its all-time high.
While all “Ethereum killers” have recovered to near all-time highs or higher, Polkadot is still lagging behind.
So will the sleeping giant wake up?
It seems like it just happened – the recent hype surrounding the Polkadot “Parachain” auction brought the cryptocurrency to life and woke this multi-chain giant.
How does polkadot create value?
1. Solution for blockchain communication
Blockchains function as separate data islands with few possibilities to use the information of the other networks. Polkadot eliminates these concerns with its “multi-chain” network, which enables information transfer between blockchains. This is a valuable function that will be increasingly used by blockchain technologies in the future.
2. Solve scalability
Bitcoin only processes 3-5 transactions per second and Ethereum processes 10-15 transactions per second. For context, Visa processes 1,700 transactions per second. This points to the scalability problem that both cryptocurrencies are facing. Polkadot is a winner when it comes to scalability, however. Polkadot is said to be able to process up to 1 million transactions per second.
3. An easy way to create custom blockchains
Polkadot allows users to build their own blockchain from scratch with their suite of functionalities, while also giving you the freedom to customize whatever you need. Custom blockchains can be created in minutes, giving you access to their security, scalability and interoperability. You’re also not limited to writing your blockchain logic in a Polkadot-specific language, but accepts multiple languages.
Where do I buy polkadot?
Crypto investment platform based in Cape Town Revix, which is supported by JSE-listed Sabvest, has just added Polkadot to its crypto product offering with an enticing fee-free promotion.
Revix will offer Zero purchase fees on Polkadot purchases for a week beginning September 3 and ending September 9, 2021.
By Revix, you also get access to your ready-made “Crypto packages“. Your bundles allow you to effortlessly own an equally weighted basket of the world’s largest and most successful cryptocurrencies by default, without having to build and manage a crypto portfolio yourself. They’re like the JSE Top 40 or S&P 500, but for crypto. DM / BM
For more information, visit www.Revix.com.
Revix brings simplicity, trust and great customer service to investing. Its easy-to-use online platform allows anyone to securely own the best investments in the world with just a few clicks. Revix guides new customers through the registration process through to their first deposit and first investment. Once set up, most customers manage their own portfolio, but can always access the support of the Revix team.
This article is for informational purposes only. The views expressed are and should not be construed as investment advice or recommendation. This article is not an offer or a solicitation of an offer to buy or sell any of the assets or securities referred to herein. You should not invest more than you can afford to lose and, before investing, please consider your level of experience and investment goals, and seek independent financial advice if necessary.