Polkadot FAQs

Polkadot is a blockchain-based platform that allows multiple blockchains to connect and work together. It helps facilitate the communication between decentralized applications (dApps), oracles (data sources), and other blockchain-based technologies.

Here are some of the most frequently asked questions about Polkadot from around the web.

What is Polkadot?

Source: Polkadot.network

Polkadot is a heterogeneous multi-chain framework. That means the framework enables independent blockchains to exchange information and settle transactions with high-security guarantees. 

In addition, Polkadot provides interoperability between public and private blockchains, allowing them to share their security without needing to trust one another or be built on the same consensus algorithm such as proof-of-work (PoW) or proof-of-stake (PoS). 

The Polkadot project was conceived by Gavin Wood, co-founder of Ethereum, and is currently developed and managed by Web3 Foundation. Drawing Inspiration from both Bitcoin and Ethereum, Polkadot is a blockchain agnostic solution to achieving scale, governance, interoperability, and security within a trustless network.

But it doesn’t end there. 

The Substrate Framework in Polkadot allows users to create their blockchain with little effort. Furthermore, the network may maintain these user-designed blockchains while monitoring network transactions and security. As a result, Polkadot is well-positioned to compete aggressively in the Defi market.

What is the Native Token of Polkadot?

Polkadot’s blockchain is based on the proof-of-stake consensus algorithm. The project’s native currency, DOT, gives network validators the ability to vote on Polkadot decisions. Because DOT holders have an economic interest in the project, this voting power incentivizes them to act without bias.

The network quickly went mainstream when it raised USD $160 million through an ICO (Initial Coin Offering) in 2017. While Ethereum and Cardano offer programmable blockchains, Polkadot’s unique value proposition stems from its ability to act as a bridge, linking dozens of Defi projects and cryptocurrencies together despite them all being built on different blockchains.

Proof Of Stake on DOT

The Polkadot network uses the Proof-of-Stake (PoS) consensus algorithm, designed to improve chain security by allowing for more validators and nominators. Stakers can stake DOT to operate validator nodes, which verify the central relay chain and connected Parachains while also participating in consensus to earn block rewards.

Governance on DOT

The DOT token is an inflationary cryptocurrency, allowing holders to vote and take part in network governance. This governance includes validating fees, determining Parachain connections, deciding on upgrades, and contributing to the governance of the Council and Technical Committee.

The Council is a group of individuals chosen by the DOT token holders to decide which proposals should advance. 

The Polkadot treasury consists of the collection of network fees. In addition, passive DOT investors are represented in the ecosystem by the Council. Alongside the Council, the Technical Committee consists of members from across the network’s development teams, who then execute approved ideas.

While Polkadot can become a building block for blockchain infrastructure, some not-so-pleasant facts bear mentioning. Following the 2017 ICO success, 60% of the funds were frozen to fix some vulnerabilities in the network for a short period. Furthermore, eyebrows were raised when the public discovered Polkadot uses bounty hunters called Fishermen to secure the network, a practice that some would rather have in-house.

Nonetheless, all these minor security concerns have not held them back. Polkadot promises to allow both private and public blockchains to share information while continuing to progress forward.

The Polkadot Ecosystem

Polkadot supports over 250 projects across multiple niches. These include Defi projects, Tokens, NFT’s, gaming, and more. Some of the more notable projects include:

MoonBeam

A decentralized, permissionless, and Ethereum-compatible smart contract platform that enables the production of natively interoperable applications. You can use Moonbeam to quickly create dApps on Polkadot and link them with other blockchains, such as Bitcoin and Ethereum.

Ocean Protocol

Any data source, such as individuals, industries, startups, governments, and data experts, may join the Ocean Protocol network. Furthermore, the protocol has no geographical restrictions, allowing anybody to develop data services and marketplaces.

How Many Polkadot Tokens are in Circulation?

Source: https://coinmarketcap.com/currencies/polkadot-new/

There are almost 1-billion DOT tokens in circulation. As an inflationary cryptocurrency DOT has an infinite supply. In this regard DOT is one of the only inflationary (infinite supply) tokens in the top ten market cap cryptocurrency list. Feel free to check out DOT’s current market price here

What Wallets Support Polkadot?

Polkadot ranks in the top ten of all cryptocurrencies by market capitalization, which means there are plenty of wallets that support it. This includes popular desktop wallets like Exodus and Atomic Wallet or hardware wallets like Ledger and Trezor.

If you plan to hold on to your Polkadot, it’s best to store your digital assets someplace safe, like an offline hardware wallet. However, if you plan to trade your DOT on a daily basis, it makes more sense to keep it in a web wallet, like Guarda or Math Wallet. 

You may also hold the Polkadot you buy on Coinberry. Learn more about our custody here.

Community Support/Social Media 

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Where can I buy Polkadot?

You can buy Polkadot on Coinberry by signing up for an account here.

Additional Resources

Want to learn more about Polkadot? You’re in luck! We have additional content here that tells you all about this unique and exciting project.