What is Polkadot (DOT)

Polkadot is an intricate multi-chain network that strives to unify separated blockchains. Polkadot’s design allows users to perform private transactions. Its blockchains don’t release users’ information to the public network. However, they still allow millions of transactions to occur per second, so this cryptocurrency doesn’t compromise efficiency.

Curious to know more about Polkadot? Keep reading to learn about its history, how it compares to Bitcoin, and whether it’s compatible with hardware wallets.

History of Polkadot

Polkadot is one of the newest cryptocurrencies around. Gavin Wood, a core founder of one of Bitcoin’s biggest rivals, created it in May 2020. It still has a long way to go. However, Polkadot has proven itself in its short existence.

Since its launch, this cryptocurrency has accomplished the following achievements:

  • It has become one of the top five largest cryptocurrencies in the world. It has a market capitalization of$11.2 billion.
  • It has split 100 ways. At first, there were a modest 10 million DOT tokens in existence. Today, there are approximately1 billion.
  • It has gone through rebranding and experienced a dramatic increase in developer activity.

Polkadot vs. Bitcoin

While both Polkadot and Bitcoin offer users ways to pay via decentralized systems (rather than via a centralized authority), their similarities end there.

The major difference you should understand is how they operate. Bitcoin operates independently, while Polkadot works to join different networks together. It operates as a multi-chain network, so there are a lot more components involved.

Polkadot consists of two main types of blockchains:

  • The relay chain. All transactions that occur in this main network are permanent.
  • The user-created networks, also referred to as the parachains.

These parachains feed into the relay chain. So, they benefit from the same level of security as the main chain. However, the parachains are much more flexible. Users can use them for various transaction types, so their uses are seemingly endless.

You can think of Bitcoin as a singular website, while Polkadot is more like HTML code — it allows different servers, browsers, and websites to collaborate.

In short, Polkadot strives to create a framework that allows all participating blockchains. This cryptocurrency wants to put the expensive and disorganized cryptocurrency mining process in the past. Its priority is to give developers a way to add value to all blockchains instead of singular ones at a time.

Pros & Cons of Polkadot

Check out this cryptocurrency’s pros and cons below:

Pros

  • The buying process is simple for interested users
  • It’s a newer cryptocurrency with a lot of promise
  • It had attracted major funding even before its launch
  • It operates on a shared security model
  • It offers developers the flexibility that fits their application-specific chains

Cons

  • It had some security issues in its early days, but its developers squashed those quickly
  • It’s still very new and developing
  • It’s not widely accessible compared to Bitcoin

What Hardware Wallet to Use

Now that you know more about Polkadot, you might be interested in purchasing some for yourself. Because you can’t carry this cryptocurrency around like cold hard cash, you’ll need a safe place to store it.

That’s wherehardware wallets come into play:

  • Trezor offers unlimited wallet storage, so you can stock up on as much Polkadot as you can afford. This hardware wallet features an ultrasound hardware seal, meaning no one will be able to steal your valuable data and cryptocurrencies.
  • LedgerNano features an intuitive user interface that lets you safely buy and sell Polkadot. You can use this wallet to access your funds via your computer or smartphone via Bluetooth if you prefer.

Bottom Line

Polkadot is a safe, profitable cryptocurrency with a lot of room for growth in the coming years. Its ambitious goals and accomplishments prove it’s headed towards a successful future. It’s very compatible with Trezor or LedgerNano, and we expect this cryptocurrency to become even more popular within the next five years.