Structure and functions of the Polkadot cryptocurrency

10th January 2023

With the introduction of decentralized technology, the most famous asset that came into existence is cryptocurrency. The world of crypto is taking over the world at a rapid rate and as a result, the popularity of cryptocurrencies is on the rise. When the concept of crypto was introduced in 2010, the major currency known to common people was bitcoin. If you want to know more about trading, then you can take a reference from here.

As a result, it is the foremost crypto ever known to people and its popularity plunged to many heights. With the advancement of time and the development of technology, many new currencies came into being of which the Polkadot is one of the most famous. The structure and working of Polkadot are the same in the principle of decentralized applications with some changes in its algorithm making it unique. In this article, we are going to discuss the features of the Polkadot and will keenly study the structure and working of the Polkadot as a digital asset.

Polkadot- An overview

Just like the dots in its name, Polkadot is a kind of network that has the capability of connecting all other networks with the help of a few dots. The other name for this currency is a multi-chain network as it has the feature of connecting different networks. In contrast to bitcoin, this makes a point of difference wherein the prime currency runs on its own whereas Polkadot is a community-based cryptocurrency. If we talk about the ultimate goal of this technology, the answer will be to serve foundations for many blockchains across the globe that can communicate with any website, browser, or server. Also, the basic aim of using this technology is to make the easy reach expensive methods of mining and other transactions related to data validation and other security protocols. The development of smart contracts and decentralized applications is another perspective of developing Polkadot. Polkadot was introduced in the year 2020 and has a wide number of elements that can surely help it complete its objectives the way it wanted to.

Historical background

Co-founder of ethereum named Gavin Wood came up with the idea of Polkadot. He used the Web3 Foundation for the same and the main motive behind raising this technology is to create such a platform that can make links with a various chains that too in a decentralized manner. Thus, the nature of Polkadot is open-source and has the facility to enable communications between different blockchain networks.

Structure of Polkadot

Three basic chains are involved in Polkadot. These are

  • Relay Chain- The relay chain has the capability of uniting all the chains available in an individual manner to the basic structure of the Polkadot. This facilitates interoperability and many other concerns related to communication.
  • Parachain- This contains parallel chains that are constantly flowing in the entire Polka network. The operations are parallel, thus assisting the entire structure.
  • Bridge chain- Those blockchains that do not hold and use Polkadot mechanisms are interconnected by this chain.

Working of Polkadot

The proof-of-stake operations are consumed in this platform and it is the relay chain that a Polkadot structure uses. The tokens available with DOT validate the voting powers thereby allowing several project decisions and development interferences. Thus a DOT token functions in these roles,

  • Validating roles- The accuracy of data in parachain blocks are checked by these tokens. Other voting and consensus related problems can be easily used.
  • Nominating roles- The addition of validators and safeguarding of relay chain can be done using the facility of these tokens.
  • Collecting roles- The various records can be easily collected and tracked down using these facilities and this makes the contribution of data possible.
  • Fishing roles- Reporting unauthorized access and inappropriate behavior of validators can be easily seen from these network structures.