If you’re new to ICOs and cryptocurrency, you’ve probably been wondering whether you should invest in the new Polkadot crypto currency. During its ICO in October 2017, it raised $140 million and sold over 10 million DOTs. It has a bullish trajectory and analysts are predicting it will hit $6 by August 2020. But before you invest, you should have a basic understanding of the crypto currency‘s features.
DOT token
The Polkadot crypto token is a brilliant development in computing and blockchain technology. This open-source project is a 100-percent decentralized networking system that allows users to transfer data between blockchains without the need for forking. It is also expected to go beyond the financial industry and be the first decentralized internet. By the time the token reaches its first anniversary, it is expected to be a widely accepted global payment method.
Relay chain
The Polkadot crypto network is made up of a main blockchain called the Relay chain. Other parallel chains are created by users and connected through a connecting layer. The Relay chain is what enables value to move from most blockchains to the non-blockchain databases. As such, this is an extremely useful technology for cryptocurrency exchanges. It can be purchased on popular cryptocurrency exchanges like Coinbase.
Parachains
The Polkadot protocol has a unique flexibility that allows parachains to adopt any governance model. As part of the Polkadot protocol, parachains can incorporate pre-built modules that enable different on-chain governance systems. By implementing sophisticated on-chain governance mechanisms, Parachains reduce the risk of hard forks and maintain accountable transparency for their community. This is critical because transparency is the foundation of many institutions.
Kusama
The founder of Polkadot, Kusama, is preparing to release his coin on the Polkadot blockchain. The coin’s circulating supply is slightly different from the Kusama version and it is the only one with a modified governance model. Kusama is preparing to release his parachain on Polkadot, allowing all of the Kusama projects to access external data sources.
Security
The security of the Polkadot crypto network is a strong argument for its adoption. The system is built around a sharded protocol. Each shard represents a unique blockchain network, called a parachain, and uses the same set of validators for all parachains. This reduces the cost of security for all participants. The network’s sharding mechanism also ensures that transactions are secured by a different set of validators than the other chains, which makes it difficult for attackers to get funds.
Inflation
The economy of the Polkadot crypto is massive. It includes assets from public chains and a certificate for ecological applications in parallel chains. The Polkadot ecosystem is very lucrative, so it should experience appropriate inflation. This is because the Polkadot staking reward is higher than the inflation rate. This is an effective way to encourage people to use the Polkadot crypto, as it promotes its ecological construction.
Price
While the price of Polkadot is a relatively new asset, there is no need to be afraid of it. The price of the crypto is high in its early stages and will grow into a seasoned player before long. However, before investing, investors should perform due diligence and analyze the current price trends. If you are a new investor, here are a few things to look for before investing in the crypto.