Technology Fridays: Polkadot Enables the Internet of Blockchains
Welcome to Technology Fridays! For my US readers, I hope you enjoyed a blessed Thanksgiving holiday surrounded of your loved ones. Today, we are going to discuss a recent addition to the blockchain ecosystem which is playing in the emerging space of inter-chain communications.
Polkadot recently made news after completing a $140 million round to deliver on its promise of inter-blockchain interoperability. Polkadot approach is trying to prevent that the increasing fragmentation in the blockchain space becomes a roadblock for the evolution of the ecosystem. As more and more blockchains are implemented, Polkadot is attempting to become the channel that connects them all; an internet of blockchains or, as the industry names these new discipline, an inter-chain.
The reason for Polkadot’s existence can be traced to a mismatch between the promises and reality of blockchain technologies. while, in theory, smart contracts should be able to interoperate from one blockchain to another, the reality has been that different blockchain stacks have relied on their own proprietary protocols creating a level of isolation with the rest of the ecosystem that prevents transaction to execute across different blockchains. Enter Polkadot, the platform’s core focus is to enable authenticated transaction to execute seamlessly across blockchains.
The main idea behind Polkadot can be reduced to two main concepts: Parachains and Relay-Chains. In Polkadot, a Parachain is, essentially, a blockchain that is part of the network. Transactions between Parachains are coordinated using a Relay-Chain. While, the Relay-chain acts as a consensus coordinator between Parachains, the latter remains autonomy to validate and confirm transactions.
In order to enables its consensus model, Polkadot leverages Proof-Of-Stake mechanisms similar to Ethereum. Polkadot’s consensus model uses an internal network token called DOT. In a Polkadot inter-chain, the owners of DOT tokens can vote on many decisions such as the validity of transactions or the addition or removal of Parachains.
The Polkadot architecture needs to coordinate transactions between heterogeneous topologies such as “high-value” blockchains like Bitcoin or Ethereum with “low-value” private blockchains. Polkadot abstracts this diverse universe using four fundamental roles: Validators, Collators, Nominators and Fishermen.
Validators are a key component of the Polkadot architecture responsible to operate a Relay-Chain client network. Transaction Collators are in charge of processing and confirming transactions in a similar way to how Miners work in Proof-Of-Work blockchains. Nominators typically place security bonds that indicate tryst on a specific Validator. Completing the Polkadot architecture, we have Fishermen which are components that are rewarded by detecting anomalies in the network. Polkadot combines these four fundamental components with innovative protocols that enable a simple and yet robust experience to the implementation of inter-chains.
Polkadot is one of the key players in the emerging inter-chain space which is fairly new. However, we are already seeing some interesting alternative in that market segment. Cosmos is typically seeing as the main competitor of Polkadot. Ripple’s dabbled into the space with its InterLedger Protocol which can be used as an interoperable channel between blockchains. Startups such as Aion or Lamden can also be considered competitors of Polkadot.