Before trying to figure out whether it is a good investment, it is necessary to answer the question – What is Polkadot? It is an open-source project that is powered by the Web3 Foundation. Technically, it happens to be a multi-chain application environment that provides cross-chain interoperability at a level that was impossible before. It implies that consumers can send more than just coins across blockchains. Polkadot makes it possible for these networks to communicate actual data.
With the help of this technology, the protocol is trying to solve one of the most pressing problems facing the blockchain sector, which is interoperability. These days, it happens to be the market in a state of extreme division. Blockchains act as separate parts with data, while it is barely possible to use the information that other networks have.
Polkadot gets rid of these concerns via integrations of different technologies. Furthermore, the protocol is able to communicate data from private blockchains to public networks and vice versa. That is the reason why Polkadot is an extremely popular cryptocurrency from the very beginning.
Consequently, it is possible to utilize it as a digital asset, just like any other coin. Many of the new tokens appearing on the market are using the Polkadot app to create their own cryptocurrencies.
How to Get Polkadot?
It is possible to purchase Polkadot from any crypto exchange online, such as Binance and Coinbase. At the same time, it cannot be mined because it is very different from other coins, like BTC. Bitcoin is a Proof of Work network, while Polkadot happens to be a Proof of State network. It implies that you need to hold a specific number of coins and stake them to earn tokens on the blockchain.
Therefore, holders are going to be rewarded for staking their assets in the protocol in exchange. Polkadot uses Nominated Proof of Stake as its validation for the algorithm. The holders of DOT can take part in this essential network operation. It also acts as a disincentive for bad actors to take part in the network because they have all the chances to lose their stake for bad behavior.
The requirement for participating is dependent on the duration of staking and the overall number of coins staked.
Should People Invest in Polkadot?
It is hard to give a clear answer whether or not you should invest in Polkadot. The digital asset is still relatively new, so it will take some time for it to see true success.
At the same time, there are a lot of indications that the coin should be a good investment. One of the reasons is that the team behind it obtains numerous projects in the pipeline close to 253, such as Polka Defi.
The great part is that the cryptocurrency has a monetary value at the moment, which makes it worth considering as an investment. Furthermore, some investors believe that Polkadot is going to succeed because it is available in many trading markets. Thus, it is possible to use it in many places.
However, it is still not easy to give an accurate prediction when it comes to investing in Polkadot. If you believe in the digital asset and the blockchain technology behind it, you can have the coin as a part of your portfolio. It is recommended to keep an eye on developments, though.
Vivek is a published author of Meidilight and a cofounder of Zestful Outreach Agency. He is passionate about helping webmaster to rank their keywords through good-quality website backlinks. In his spare time, he loves to swim and cycle. You can find him on Twitter and Linkedin.