Polkadot Running The World Of Blockchain.
Have you ever wondered what it will feel like to have the whole world running on Blockchain technology? From Smart Cities, Agricultural produce, Supply Chain, Financial Technology, Power infrastructure, IoT, Healthcare records, Sex (Yep! wait for it, someone is thinking about it), Transportation, Automobiles and lots more than you could imagine, where the data record or state changes are easily called from other blockchains. I think you already get the picture.
Now think of these individual blockchains, that appear in different sectors of the economy, and consider how limited they would be if they can’t communicate with each other. The added value to the world but be limited; however they will be able to communicate with one another through the Polkadot platform.
For those that do know much about Polkadot, you can read my article here about Polkadot: One Chain to Link Them All.
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.
On the Polkadot Network, On-Chain governance is key to the lifecycle of parachain. The DOT token will serve as governance over the network, to incentivize actors to behave in an honest way, and also serve as proof of stake for securing the network. Finally, DOT tokens will also be used to add new parachains.
Polkadot allows the experimentation and growth of projects through….. Let’s look at a practical example of Polkadot being the central piece connecting all applications using blockchain.
An example would be a decentralized logistics and supply chain on a blockchain network that delivers grocery to an end user when his or her grocery runs out. The system notifies a free nearby pickup truck in another blockchain-enabled logistic network where to pick up the grocery. The grocery details are automatically stored on the blockchain record of the fridge manufactures and the grocery producer or pickup truck owner (if need be) gets paid via cryptocurrency from the bitcoin network. All these can work together through the Polkadot network.
This could also be applied to Energy companies where energy distribution records are available on-chain. The energy company can make a request for power consumption payment from Client’s account on the Bitcoin network. Also, they can request for data of the power being used by the electronic devices from the manufacturers’ blockchain in order to determine the amount of power needed in a particular region and the growth rate of users.
Another example would be an IoT tracking device that sends a sea vessel location data to the blockchain of a logistics/transport consortium to help prevent diversion of a vessel’s cargo.
On the other hand, is a smart contract application built on the Ethereum or CordaDLT Network that needs to automatically release some eth or DAI cryptocurrency as payment to an account/address when the vessel gets to its desired location like to the logistics firm that owns the vessel used in the transportation.
Let’s also imagine another blockchain that is being used by insurance companies exists. Insurance companies can inspect the chain and verify that the paper documents of the insured cargo exist and are valid. This could be easily confirmed by smart contracts. They can also make payments to the insurance companies based on the terms outlined in the contract like whether the vessel arrives in the destination port. Vessel Inspection Agents also could have their own parachain where they stake some funds or coins that are equivalent to the cargo value to serve as reputation check and get their staked fund/coin slashed, or they can even be removed from the network when they act in a dishonest way.
Polkadot creates an easy data request and exchange network amongst blockchains in a world where distributed ledger technology is being applied for IoT and Smart Contract application, Polkadot can stand as a bridge to unify the two together.
How blockchains will connect and be able to incentivize another blockchain to carry out functions
Atomic swap of coins would go a long way in solving this but there are some blockchains that are not cryptocurrency enabled. In the words of McPheeb on Reddit, an opinion which looks more likely to happen:
Imagine one parachain chain (caller) wants to ask another parachain (callee) to do a computationally difficult task that the caller can’t efficiently do themselves. There must be some way of compensating the callee for their work. We could imagine having many specialized task-specific parachains that only perform a particular function but do it very well. Task-specific parachains might even require collators equipped with task-specific hardware. These parachains will come into existence if only they are financially incentivized to do so. It’s the old division of labor to improve efficiency thing.
For this reason, the Polkadot ecosystem will require a currency in order to incentivize increased functionality. It won’t be DOTS because of the high transaction costs. It likely won’t be Bitcoin because, from section 5.6 of the white paper, “Bitcoin interoperation presents an interesting challenge for Polkadot: a so-called “two-way peg” would be a useful piece of infrastructure to have on the side of both networks. However, due to the limitations of Bitcoin, providing such a peg securely is a non-trivial undertaking.”
As we look forward to the final launch of the Polkadot network this year after all test runs and important feature additions have been concluded, I believe the right incentivization mechanism to help with task execution on other blockchains would be agreed upon. How the different networks would incentive each other to carry out a given task especially networks that are not cryptocurrency driven.
Teams on Polkadot
As at this date, there are 24 teams and counting either building or waiting for the launch of the Polkadot Network. From DAO teams to smart contract oracle projects, cyber-physical systems integration, financial systems, energy networks, cryptocurrencies exchange, wallets, etc.
The future application of the Polkadot network looks very promising and open for improvements as on-chain upgrades can easily be carried on the network due to the on-chain governance mechanism built into the democratic system.
