Polkadot: One Chain to Link Them All.
Imagine sending bitcoin from the Bitcoin network to the Ethereum network to buy Ether instead of going through an exchange or any centralized entity that would collect your Bitcoin and give you Ether in return after charging you a certain fee. Imagine a world where Bitcoin network can communicate with all other blockchain networks without a central entity/infrastructure serving as an intermediary but a decentralized protocol. Also imagine a Trade Finance Smart contract on a Private/Consortium Blockchain using Substrate, HyperLedge or Corda where the Parties(Seller and Buyer) involve wants to use Bitcoin, Dai or any other cryptocurrency as their payment settlement instead of using Banks as intermediaries and fiat for payment and once payment is made, the private/consortium blockchain receives the payment data automatically and releases goods or carry out further instructions. Welcome to the world of Web3 being powered by Polkadot that is making the web truly decentralized by creating an Interoperability protocol that makes it easy for blockchains communicate and scale.
According to the information on their website, Polkadot is a protocol that allows independent blockchains to exchange information. Polkadot is an inter-chain blockchain protocol which unlike internet messaging protocols (e.g. TCP/IP) also enforces the order and the validity of the messages between the chains. This interoperability also allows the additional benefit of scalability by creating a general environment for multiple state machines. I won’t be delving into details about how Polkadot works because that has already been covered in various Polkadot Blog posts and you can take a look at this Polkadot video I find interesting. Rather I will be looking at the possibilities and uniqueness of the protocol I dub “One Chain to Link Them All”. To ensure an easy flow of this article, I will define it as a decentralized relay chain or protocol that creates interoperability between the present and future blockchains and improves scalability with the use of parachains. Think of a blockchain world where this can happen;
- A world where you can develop your State Machine (smart contract, payment, supply chain, etc) without worrying about the consensus mechanism and economic model to adopt because you can depend on other Blockchain consensus mechanisms.
- Do Atomic swap of tokens/coins across blockchains(both public and private).
- A true decentralized exchange without any central infrastructure attached.
- Calling smart contracts from other blockchains or across blockchain from a non-smart contract chain and vice-versa. E.g. Transactional Blockchain (Bitcoin) calling Smart Contract (Ethereum, EOS, Tron) Blockchains.
- Communicate with IoT devices and AI/Machine Learning technologies from any blockchain.
- Pooled Security. Currently, creating a blockchain and getting it secured using POW or POS is difficult because of the limited available nodes or interest. You can pool security with Polkadot or use trusted blockchain consensus.
Polkadot aims to solve some of the big issues facing blockchains today, including scalability, governance, extensibility, and interoperability. By allowing a diverse range of chains to pool their security and communicate with one another, Polkadot strives to revolutionize the blockchain space.
Interoperability
Polkadot’s interoperability of blockchain is made possible by a decentralized relay chain for connecting blockchains (private and public chains). This helps it to connect chains with distinct state machines and consensus making it possible for public and private blockchains working on the same network and open to past, present and future support upgrade.
Co-Security/Pooling Security
Another great feature Polkadot is solving the “survival of the fittest” narrative that would eventually see good and innovative protocols and project get easily attacked and eventually dies because of the battle for limited security resources by different blockchains. Polkadot lets blockchains pool security resources turning competition into rule-based cooperation.
Scalability via Parachains Connected to the Root
A parachain (parallelizable chain) is a simpler form of the blockchain, which attaches to the security provided by a “relay chain” rather than providing its own. The relay chain is called that because it not only lends security to attached parachains but also provides a guarantee of secure message-passing between them. One key feature of parachains is that the computations they perform are inherently independent.
After the successful launch of the PoC1 (Proof of Concept 1) last year which focused on the RELAY CHAIN that connects blockchains, the team was able to release PoC3 this January called the GRANDPA consensus algorithm which is much better and improved. The PoC1 runtime laid the foundational groundwork for parachains, the interoperable and scalable blockchains on Polkadot.
According to the blog post for the release of PoC1:
Using Substrate, a technology stack to build blockchains, we are able to demonstrate the validation and synchronization of blocks using a Byzantine Fault Tolerant (BFT) consensus algorithm on a testnet. This blockchain is upgradable on-chain and hence requires no forking procedures to keep the network healthy and adaptive. We were able to upgrade runtimes successfully without the need for a hard fork.
PoC3 — GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement), is an improvement on PoC1, is seen as the granddaddy of all consensus algorithms:
- Under good network conditions, GRANDPA can finalize blocks nearly instantly.
- Under bad network conditions, like a network partition, GRANDPA can finalize millions of blocks at once when the partitions resolve.
- GRANDPA can finalize a new block regardless of how many blocks have passed since the last one was finalized.
Adding DOT to the Polka
The Polkadot token called DOT token serves 3 distinct purposes: governance over the network, operation, and bonding.
Governance
Polkadot holders have complete control over the protocol. All privileges, which on other platforms are exclusive to miners, will be given to the relay chain participants (DOT holders), including managing exceptional events such as protocol upgrades and fixes.
Operation
Game theory incentivizes token holders to behave in honest ways. Good actors are rewarded by this mechanism whilst bad actors will lose their stake in the network. This ensures the network stays secure.
Bonding
New parachains are added by bonding tokens. Outdated or non-useful parachains are removed by removing bonded tokens. This is a form of Proof of Stake.
Let’s Talk a bit About Parity Substrate
All blockchains are divided into two parts; The State Machine and The Consensus Mechanism. These two are quite tasking to build and organizations are spending a lot of resources plus time to put up their own blockchains. Organizations have to decide which programming language to use, how the nodes will communicate with each other, what consensus algorithm to use, the networking and then finally start thinking about the business logic or what the blockchain is expected to solve. Think of Substrate as a framework for building blockchains that take away the headache of consensus algorithm, finality, block voting, peer to peer communication library, programming languages, and compiler and can easily connect to the Polkadot network. With Substrate, organizations can focus on the reason for their blockchain. Polkadot was also built with Substrate.
You can take a look at this videos for more info about Substrate
In Conclusion
I think Polkadot should be dub the “One Chain to Rule Them All” but this would be against the tenets of the decentralized web being built on the blockchain which is based on collaboration and being autonomous. The future for the ecosystem will strive on this as research and development of efficient systems come on board and what better way to survive and tap into the already existing network of systems than tapping into the Polkadot Network?
