Ethereum and Polygon.</strong></p>\n<p>In this section, I&rsquo;m going to tell you all about Polygon. We&rsquo;ll talk about what it is, how it works, and why it has become the essential tool for all Ethereum users.</p>\n<p><em>Let&rsquo;s get to it!</em></p>\n<h2>What is Polygon?</h2>\n<p>To start off, before we can get into the topic of what is Polygon, you first need to understand Ethereum, and all of the main issues associated with this <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-blockchain/">blockchain. Since this isn&rsquo;t a section about Ethereum, I&rsquo;ll be quick.</p>\n<p>So, as of writing this section, Ethereum is the second-most popular crypto network, right after Bitcoin. It&rsquo;s super popular for a variety of reasons - <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-smart-contract/">smart contracts</a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-decentralized-applications-dapps/">dApps, it being the center hub of <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-defi/">DeFi, and so on. </strong>Having said that, though, this does not mean that ETH is issue-free - in fact, there are quite a few big issues associated with this blockchain!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: Smart contracts, dApps, DeFi, etc.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-01.o.jpg/" alt=\"What is Polygon in crypto: Smart contracts, dApps, DeFi, etc.\" width=\"1000\" height=\"518\" /></p>\n<p>First and foremost, <strong>Ethereum is a dated blockchain. </strong>There&rsquo;s a variety of different networks that are much faster, easier to use, and that require far fewer resources in order to upkeep and maintain. Ethereum will soon launch its ETH 2.0 update, which will address many of these issues, but as of writing this section, it&rsquo;s a blockchain that certainly lacks in certain areas!</p>\n<p>Among the most notable of these areas is the <strong>&ldquo;TPS&rdquo; metric, also known as</strong> <strong>&ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-transactions-per-second-tps/">transactions per second</a>&rdquo;. </strong>At present time, Ethereum is able to confirm around 30 transactions per second. As you can imagine, for a network as popular as this, a number like this is detrimental. This is especially true when you consider the fact that, say, <a href=https://www.bitdegree.org/"/crypto/learn/what-is-solana-in-crypto/">Solana - a popular competing blockchain - can support over 65,000 TPS. <em>The difference is crazy!</em></p>\n<p>Since Ethereum can only support so few transactions per second, this leads the network to another huge issue - <strong>gas fees. </strong>These are the fees that you pay in order to perform a transaction on Ethereum - say, sending some ETH to your friend or relative, or buying the newest token that has hit the market.</p>\n<p>Essentially, if you want your transaction to be confirmed in a speedy manner, you&rsquo;ll need to pay higher fees than some other individual sending their ETH to their friends or relatives. These fees can become very irrational, fast!</p>\n<p>On the user end of things, this is already super-inconvenient, and isn&rsquo;t how the second-largest blockchain should look like! To add to that, <strong>Ethereum is also difficult to work with</strong>, if you&rsquo;re a developer, and are creating a dApp on this blockchain.</p>\n<p><em>Now, how does all of this tie into the question of what is Polygon?</em> Well, the biggest thing that you should take away from this section is the fact that <strong>Polygon is a separate blockchain that utilizes Ethereum&rsquo;s technology</strong>, with the goal to address and solve all of these issues that I&rsquo;ve just mentioned.</p>\n<p>Polygon was created all the way back in 2017, and from day one, its main goal was to tackle all of the shortcomings associated with ETH. Initially, <strong>Polygon was called Matic</strong>, but at some point, it rebranded to its current name - the native coin of the network, however, is still referred to as <strong>the Matic Coin.</strong></p>\n<h2>How Does Polygon Work?</h2>\n<p>Continuing on with the section, I admit - it&rsquo;s pretty simple to just say that Polygon aims to solve the issues that are present with the Ethereum blockchain, and leave it at that. However, it&rsquo;s also important to tackle the question of HOW Polygon achieves this, in the first place!</p>\n<p>Think about the example I gave at the beginning of the section. <strong>Ethereum would be that awesome new phone that you&rsquo;ve bought</strong> - it&rsquo;s full of issues, sure, but it&rsquo;s still the most popular and widely-used phone, since it&rsquo;s both established, and supports all of the most popular applications - something that no other phone is able to claim.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: How does Polygon work?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-03.o.jpg/" alt=\"What is Polygon in crypto: How does Polygon work?\" width=\"1000\" height=\"226\" /></p>\n<p><strong>Polygon would be that aforementioned update to your phone.</strong> In the world of crypto, Polygon is referred to as a <strong>&ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-layer-2/">Layer-2 scaling solution</a>&rdquo;.</strong> It&rsquo;s a complex topic, but essentially, the way you can look at it is this - Polygon allows developers and end-users on the Ethereum blockchain to connect to its network and avoid many of the shortcomings associated with ETH.</p>\n<p>So, to put it in other words, imagine that you want to purchase a computer game, for cryptocurrencies. The game is based on the Ethereum blockchain, and costs a crazy amount of ETH to buy - the price itself isn&rsquo;t all that big, but the <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-transaction-fee/">transaction fees</strong></a> are double that of the price! Well, what if you could purchase that same game for Matic coins, pay very small transaction fees, and then still play the game with all of the benefits that are available on the Ethereum blockchain?</p>\n<p><em>Sounds awesome, right? </em>Well, put simply, this is possible, and it&rsquo;s one of the core features of Polygon! That&rsquo;s because of how similar Polygon is to Ethereum, blockchain development-wise. <strong>Some places around the internet use the term &ldquo;EVM&rdquo; to describe the way that Polygon works. </strong>This term abbreviates as <strong>&ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-ethereum-virtual-machine-evm/">Ethereum Virtual Machine</a>&rdquo;,</strong> and it essentially describes the ecosystem that is powered by Ethereum&rsquo;s code, but is based on a third-party blockchain.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: Ethereum Virtual Machine.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-04.o.jpg/" alt=\"What is Polygon in crypto: Ethereum Virtual Machine.\" width=\"1000\" height=\"429\" /></p>\n<p><em>Why is EVM functionality important?</em> Well, it allows different projects to migrate between blockchains, in an almost seamless manner. For example, developers of the earlier-mentioned game could take it from the Ethereum blockchain, and transfer it to Polygon, and it would essentially work in the exact same manner. Just with all of the added benefits of Polygon - small gas fees, super-quick transactions, and so on. In this sense, <strong>Polygon is helping Ethereum to scale!</strong></p>\n<p>This is actually one of the core goals of Polygon, too! Since it&rsquo;s a Layer-2 blockchain, it aims to <strong>help Ethereum manage all of the transactions that it deals with</strong>, and by doing so, help scale the main network, indefinitely.</p>\n<p>To help you better understand how this works, you can think about it in a visual manner - imagine the Ethereum blockchain as the main, huge network where a large variety of important processes happen every second. Since the network is so huge, it gets congested, and all of the issues that we&rsquo;ve talked about earlier start to arise.</p>\n<p>So, a much smaller network called Polygon enters the scene. It communicates with Ethereum, and says: <em>\"Hey! Redirect all of that huge amount of data to me, I&rsquo;ll condense it to some much smaller units of information, and send it back to you!\"</em></p>\n<p>By utilizing its <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake consensus mechanism, Polygon is able to do just that, and in this way, it alleviates the load that the Ethereum mainnet receives. This is why Polygon is called a Layer-2 scaling solution - it&rsquo;s literally a smaller network that works alongside Ethereum, with the goal to help this large network manage its processes!</p>\n<p>It needs to be mentioned, though, that <strong>Polygon is a much larger project than just a &ldquo;Layer-2 scaling solution for Ethereum&rdquo;.</strong> While this is its main functionality that we - the everyday users - see, Polygon allows developers to work on complex, Ethereum-based projects in an approachable, multi-chain-oriented manner. It&rsquo;s an entirely different field, and I won&rsquo;t get into it here, since it would require a separate section in and of its own. Just keep in mind that Polygon is a much larger project than it might seem, initially!</p>\n<h2>The Matic Coin</h2>\n<p>Before I let you go, the one last thing that I want to tell you about in this section is the Matic coin. I mentioned it earlier - it&rsquo;s the native cryptocurrency of the Polygon blockchain. <em>However, what is it used for?</em></p>\n<p>Well, essentially, <strong>Matic is a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-utility-token/">utility token</a>. </strong>It has staking functionality, which means that the coin can be staked in order to earn passive rewards, in the form of more Matic. If you&rsquo;d like to learn more about staking, I have <a href=https://www.bitdegree.org/"/crypto/learn/what-is-staking-in-crypto/">a section on that</strong></a>, too!</p>\n<p>The second large purpose of the Matic coin is to <strong>incentivize developers and users </strong>on the Polygon blockchain to perform different processes on the network! It does tie in with staking, but if you provide your computational resources to Polygon, and are an active developer on the network, this can result in Matic rewards!</p>\n<p>Lastly, the coin is used to <strong>pay for transaction fees</strong>, whenever you perform those transactions on the blockchain.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: The Matic coin.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-05.o.jpg/" alt=\"What is Polygon in crypto: The Matic coin.\" width=\"1000\" height=\"841\" /></p>\n<p>As of writing this section, Matic currently has a market cap of $4,4 billion and is worth around $0,64. At its highest point back in December of 2021, it was worth $2,88. The coin currently has inflationary mechanics, due to the staking functionality - however, the team behind <strong>Polygon aims to make the coin</strong> <strong>deflationary</strong>, at some point in time. This could theoretically help it increase in value, too!</p>\n<p>Wrapping things up, whether you&rsquo;re a developer or a crypto enthusiast, Polygon is definitely one of the more-interesting projects that are certainly worth checking out, especially if you&rsquo;re fascinated with all-things Ethereum.</p>","meta_title":"What Is Polygon in Crypto and What Makes It Unique?","meta_description":"Trying to figure out what is Polygon in crypto? Want to know how it differs from other chains and what makes it interesting? Find out here!","meta_keywords":"what is polygon crypto, what blockchain is polygon helping to scale, is polygon a good crypto, polygon matic crypto, ethereum polygon matic,","order":12,"language":"en","created_at":"2022-06-21T06:44:52.000000Z","updated_at":"2022-10-17T07:48:45.000000Z","modified_content":"<p>In this section, I&rsquo;m going to tell you what is Polygon in crypto!</p>\n<p>Imagine that you&rsquo;ve bought a new phone. After you start using it, you notice that, while it&rsquo;s super-modern, and supports all of the latest apps, it has a lot of issues - the battery runs out very fast, everything&rsquo;s slow to load, and the apps glitch out every once in a while.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: Ethereum and Polygon.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-02.o.jpg/" alt=\"What is Polygon in crypto: Ethereum and Polygon.\" width=\"1000\" height=\"687\" /></p>\n<p>You could change your phone, sure, but then you wouldn&rsquo;t be able to use many of the most popular applications that all of your friends are using, since only this phone supports them! However, there&rsquo;s an alternative - a third-party update that would allow your phone to resolve many of these issues. <strong>In essence, this is the relationship between <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum and Polygon.</strong></p>\n<p>In this section, I&rsquo;m going to tell you all about Polygon. We&rsquo;ll talk about what it is, how it works, and why it has become the essential tool for all Ethereum users.</p>\n<p><em>Let&rsquo;s get to it!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"What is Polygon in Crypto? (Animated Explainer)\"\n title=\"What is Polygon in Crypto? (Animated Explainer)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Polygon: the Essential Scaling Solution for Ethereum</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Polygon: the Essential Scaling Solution for Ethereum\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"V19wb3rf67U\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">What is Polygon in Crypto? (Animated Explainer)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/V19wb3rf67U/hq720.jpg/"/n alt=\"What is Polygon in Crypto? (Animated Explainer)\"\n title=\"What is Polygon in Crypto? (Animated Explainer)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"What is Polygon in Crypto? (Animated Explainer)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"V19wb3rf67U\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>What is Polygon?</h2>\n<p>To start off, before we can get into the topic of what is Polygon, you first need to understand Ethereum, and all of the main issues associated with this <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-blockchain/">blockchain. Since this isn&rsquo;t a section about Ethereum, I&rsquo;ll be quick.</p>\n<p>So, as of writing this section, Ethereum is the second-most popular crypto network, right after Bitcoin. It&rsquo;s super popular for a variety of reasons - <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-smart-contract/">smart contracts</a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-decentralized-applications-dapps/">dApps, it being the center hub of <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-defi/">DeFi, and so on. </strong>Having said that, though, this does not mean that ETH is issue-free - in fact, there are quite a few big issues associated with this blockchain!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: Smart contracts, dApps, DeFi, etc.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-01.o.jpg/" alt=\"What is Polygon in crypto: Smart contracts, dApps, DeFi, etc.\" width=\"1000\" height=\"518\" /></p>\n<p>First and foremost, <strong>Ethereum is a dated blockchain. </strong>There&rsquo;s a variety of different networks that are much faster, easier to use, and that require far fewer resources in order to upkeep and maintain. Ethereum will soon launch its ETH 2.0 update, which will address many of these issues, but as of writing this section, it&rsquo;s a blockchain that certainly lacks in certain areas!</p>\n<p>Among the most notable of these areas is the <strong>&ldquo;TPS&rdquo; metric, also known as</strong> <strong>&ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-transactions-per-second-tps/">transactions per second</a>&rdquo;. </strong>At present time, Ethereum is able to confirm around 30 transactions per second. As you can imagine, for a network as popular as this, a number like this is detrimental. This is especially true when you consider the fact that, say, <a href=https://www.bitdegree.org/"/crypto/learn/what-is-solana-in-crypto/">Solana - a popular competing blockchain - can support over 65,000 TPS. <em>The difference is crazy!</em></p>\n<p>Since Ethereum can only support so few transactions per second, this leads the network to another huge issue - <strong>gas fees. </strong>These are the fees that you pay in order to perform a transaction on Ethereum - say, sending some ETH to your friend or relative, or buying the newest token that has hit the market.</p>\n<p>Essentially, if you want your transaction to be confirmed in a speedy manner, you&rsquo;ll need to pay higher fees than some other individual sending their ETH to their friends or relatives. These fees can become very irrational, fast!</p>\n<p>On the user end of things, this is already super-inconvenient, and isn&rsquo;t how the second-largest blockchain should look like! To add to that, <strong>Ethereum is also difficult to work with</strong>, if you&rsquo;re a developer, and are creating a dApp on this blockchain.</p>\n<p><em>Now, how does all of this tie into the question of what is Polygon?</em> Well, the biggest thing that you should take away from this section is the fact that <strong>Polygon is a separate blockchain that utilizes Ethereum&rsquo;s technology</strong>, with the goal to address and solve all of these issues that I&rsquo;ve just mentioned.</p>\n<p>Polygon was created all the way back in 2017, and from day one, its main goal was to tackle all of the shortcomings associated with ETH. Initially, <strong>Polygon was called Matic</strong>, but at some point, it rebranded to its current name - the native coin of the network, however, is still referred to as <strong>the Matic Coin.</strong></p>\n<h2>How Does Polygon Work?</h2>\n<p>Continuing on with the section, I admit - it&rsquo;s pretty simple to just say that Polygon aims to solve the issues that are present with the Ethereum blockchain, and leave it at that. However, it&rsquo;s also important to tackle the question of HOW Polygon achieves this, in the first place!</p>\n<p>Think about the example I gave at the beginning of the section. <strong>Ethereum would be that awesome new phone that you&rsquo;ve bought</strong> - it&rsquo;s full of issues, sure, but it&rsquo;s still the most popular and widely-used phone, since it&rsquo;s both established, and supports all of the most popular applications - something that no other phone is able to claim.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: How does Polygon work?\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-03.o.jpg/" alt=\"What is Polygon in crypto: How does Polygon work?\" width=\"1000\" height=\"226\" /></p>\n<p><strong>Polygon would be that aforementioned update to your phone.</strong> In the world of crypto, Polygon is referred to as a <strong>&ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-layer-2/">Layer-2 scaling solution</a>&rdquo;.</strong> It&rsquo;s a complex topic, but essentially, the way you can look at it is this - Polygon allows developers and end-users on the Ethereum blockchain to connect to its network and avoid many of the shortcomings associated with ETH.</p>\n<p>So, to put it in other words, imagine that you want to purchase a computer game, for cryptocurrencies. The game is based on the Ethereum blockchain, and costs a crazy amount of ETH to buy - the price itself isn&rsquo;t all that big, but the <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-transaction-fee/">transaction fees</strong></a> are double that of the price! Well, what if you could purchase that same game for Matic coins, pay very small transaction fees, and then still play the game with all of the benefits that are available on the Ethereum blockchain?</p>\n<p><em>Sounds awesome, right? </em>Well, put simply, this is possible, and it&rsquo;s one of the core features of Polygon! That&rsquo;s because of how similar Polygon is to Ethereum, blockchain development-wise. <strong>Some places around the internet use the term &ldquo;EVM&rdquo; to describe the way that Polygon works. </strong>This term abbreviates as <strong>&ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-ethereum-virtual-machine-evm/">Ethereum Virtual Machine</a>&rdquo;,</strong> and it essentially describes the ecosystem that is powered by Ethereum&rsquo;s code, but is based on a third-party blockchain.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: Ethereum Virtual Machine.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-04.o.jpg/" alt=\"What is Polygon in crypto: Ethereum Virtual Machine.\" width=\"1000\" height=\"429\" /></p>\n<p><em>Why is EVM functionality important?</em> Well, it allows different projects to migrate between blockchains, in an almost seamless manner. For example, developers of the earlier-mentioned game could take it from the Ethereum blockchain, and transfer it to Polygon, and it would essentially work in the exact same manner. Just with all of the added benefits of Polygon - small gas fees, super-quick transactions, and so on. In this sense, <strong>Polygon is helping Ethereum to scale!</strong></p>\n<p>This is actually one of the core goals of Polygon, too! Since it&rsquo;s a Layer-2 blockchain, it aims to <strong>help Ethereum manage all of the transactions that it deals with</strong>, and by doing so, help scale the main network, indefinitely.</p>\n<p>To help you better understand how this works, you can think about it in a visual manner - imagine the Ethereum blockchain as the main, huge network where a large variety of important processes happen every second. Since the network is so huge, it gets congested, and all of the issues that we&rsquo;ve talked about earlier start to arise.</p>\n<p>So, a much smaller network called Polygon enters the scene. It communicates with Ethereum, and says: <em>\"Hey! Redirect all of that huge amount of data to me, I&rsquo;ll condense it to some much smaller units of information, and send it back to you!\"</em></p>\n<p>By utilizing its <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake consensus mechanism, Polygon is able to do just that, and in this way, it alleviates the load that the Ethereum mainnet receives. This is why Polygon is called a Layer-2 scaling solution - it&rsquo;s literally a smaller network that works alongside Ethereum, with the goal to help this large network manage its processes!</p>\n<p>It needs to be mentioned, though, that <strong>Polygon is a much larger project than just a &ldquo;Layer-2 scaling solution for Ethereum&rdquo;.</strong> While this is its main functionality that we - the everyday users - see, Polygon allows developers to work on complex, Ethereum-based projects in an approachable, multi-chain-oriented manner. It&rsquo;s an entirely different field, and I won&rsquo;t get into it here, since it would require a separate section in and of its own. Just keep in mind that Polygon is a much larger project than it might seem, initially!</p>\n<h2>The Matic Coin</h2>\n<p>Before I let you go, the one last thing that I want to tell you about in this section is the Matic coin. I mentioned it earlier - it&rsquo;s the native cryptocurrency of the Polygon blockchain. <em>However, what is it used for?</em></p>\n<p>Well, essentially, <strong>Matic is a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-utility-token/">utility token</a>. </strong>It has staking functionality, which means that the coin can be staked in order to earn passive rewards, in the form of more Matic. If you&rsquo;d like to learn more about staking, I have <a href=https://www.bitdegree.org/"/crypto/learn/what-is-staking-in-crypto/">a section on that</strong></a>, too!</p>\n<p>The second large purpose of the Matic coin is to <strong>incentivize developers and users </strong>on the Polygon blockchain to perform different processes on the network! It does tie in with staking, but if you provide your computational resources to Polygon, and are an active developer on the network, this can result in Matic rewards!</p>\n<p>Lastly, the coin is used to <strong>pay for transaction fees</strong>, whenever you perform those transactions on the blockchain.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"What is Polygon in crypto: The Matic coin.\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polygon-05.o.jpg/" alt=\"What is Polygon in crypto: The Matic coin.\" width=\"1000\" height=\"841\" /></p>\n<p>As of writing this section, Matic currently has a market cap of $4,4 billion and is worth around $0,64. At its highest point back in December of 2021, it was worth $2,88. The coin currently has inflationary mechanics, due to the staking functionality - however, the team behind <strong>Polygon aims to make the coin</strong> <strong>deflationary</strong>, at some point in time. This could theoretically help it increase in value, too!</p>\n<p>Wrapping things up, whether you&rsquo;re a developer or a crypto enthusiast, Polygon is definitely one of the more-interesting projects that are certainly worth checking out, especially if you&rsquo;re fascinated with all-things Ethereum.</p>","preview_url":"https://www.bitdegree.org/crypto/learn/what-is-polygon-in-crypto","youtube_video":{"id":27,"channel_id":1,"sort":35,"video_title":"What is Polygon in Crypto? (Animated Explainer)","description":"What is Polygon?\n\nPolygon is one of the major names in the crypto world. It’s a unique blockchain project oriented around Ethereum, and to be more specific - the question of how to solve some of the major issues present with ETH, as well as how to scale it.\n\nIn this video, I’ll tell you all about Polygon. Specifically, you’ll be able to learn what is Polygon, how does it work, and why it’s so important to any and all users of the Ethereum blockchain.\n\nHave you ever used Polygon? Perhaps you’re an owner of some Matic coins? Make sure to share your experience with this blockchain project in the comments below!\n\nVideo Time Table:\n\n0:00 Introduction to What is Polygon in Crypto\n0:59 What is Polygon?\n3:31 How Does Polygon Work?\n7:06 What is the Matic Coin Used For?\n8:20 Wrap-up: What is Polygon in Crypto?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#WhatisPolygonCrypto #WhatBlockchainisPolygonHelpingtoScale #IsPolygonaGoodCrypto","video_id":"V19wb3rf67U","duration":536,"view_count":454,"thumbnail_url":"https://i.ytimg.com/vi/V19wb3rf67U/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-06-19 17:24:56","created_at":"2022-06-19T23:00:02.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}},"prevSection":{"id":10,"featured_image_id":6497,"original_id":null,"youtube_video_id":12,"author_id":42,"translator_id":null,"chapter_id":2,"title":"Is Solana an Improved Version of Ethereum?","slug":"what-is-solana-in-crypto","definition":"Did you know that the Solana blockchain supports up to almost 70,000 transactions per second?","status":"published","content":"<p>In this section, I will tell you all about <strong>what is Solana in crypto.&nbsp;</strong>This is one of those cryptocurrencies that definitely deserves a section of its own, since it's a project that all crypto enthusiasts should be aware of!</p>\n<p>So, when <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum came around in 2015, it was a piece of revolutionary crypto technology. With time, however, there have been multiple new projects that have aimed to improve all aspects of ETH. Solana is often viewed as one of the most successful of these projects.</p>\n<p>In this section, we&rsquo;re going to answer what Solana is. To be more specific, I&rsquo;ll tell you about the fundamentals of Solana, why it&rsquo;s so special, and we&rsquo;ll also touch on the idea of &ldquo;Proof-of-History&rdquo;, too!</p>\n<p><em>So, let&rsquo;s go!</em></p>\n<h2>What is Solana?</h2>\n<p>In very very short, Solana is today&rsquo;s future Ethereum 2.0 in some kind. But let&rsquo;s begin by answering the fundamental question, first - what is Solana, exactly?</p>\n<p>Well, <strong>Solana is a cryptocurrency project that&rsquo;s very similar to Ethereum</strong> - the second-largest crypto platform in the world. Same as Ethereum, Solana aims to provide its users with the tools and environment to create <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-decentralized-applications-dapps/">decentralized applications</strong></a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-smart-contract/">smart contracts</strong></a>, and other awesome projects.</p>\n<p>All these are the biggest differences comparing those two to <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin. Let&rsquo;s call them smart chains, as they aim to have some utility logic developed and not just assets with some kind of monetary value.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-1.o.jpg/" alt=\"What is Solana in crypto: Solana and Ethereum.\" width=\"800\" height=\"708\" /></p>\n<p>Now, if what I&rsquo;ve just blurted out sounds like alien-speak, I highly recommend you to read previous sections in this <strong>BitDegree Crypto 101 Handbook,</strong> before we continue with Solana. This will help you get a better understanding of what I&rsquo;m talking about, and about the world of crypto, in general!</p>\n<p>A good way of how you can look at it is this - imagine that you&rsquo;re using the same game console for over 7 or 8 years now. It does the job, and it is reliable, but does also have issues, too - it&rsquo;s too old, kinda slow, no latest games are available for it, and it tends to heat up really bad from time to time. Not to mention the fact that it might not support your favorite game's latest version, which was just released on a different console brand.</p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-2.o.jpg/" alt=\"What is Solana in crypto: An example with a game console.\" width=\"800\" height=\"470\" /></em></p>\n<p>Now, one day, at your local game store, you notice that there&rsquo;s a brand new console of a different brand being advertised - one that&rsquo;s MUCH faster and more advanced than your current &ldquo;joy-machine&rdquo;. However, there&rsquo;s just one catch - all of your friends, and other people in your life are using the same old console that you are now.</p>\n<p><em>Should you switch?</em></p>\n<p>What if this new different brand console won&rsquo;t support some of the essential older games that you have played for your whole life on your old machine?</p>\n<p>Another point is that a firmware update is planned for your old console, too - one that should make it much faster and smoother to use, and maybe even bring the compatibility to your favorite games&rsquo; latest version, that you are still just dreaming to play&hellip; All of this is just plans and still not a reality, and also, you are not really sure if it will happen soon, in the first place.</p>\n<p>While I do admit that the above example is very specific, you must understand that this is how people view Ethereum and Solana. ETH is extremely popular and is the old standard on which smart contracts and other decentralized platforms are built. While Solana offers <strong>extremely fast transaction speeds and advanced scalability</strong> <strong>features</strong> that are also planned for Ethereum in upcoming years.</p>\n<p><em>Which one you&rsquo;ll choose? </em></p>\n<p>Should people switch from ETH to Solana? Maybe these two blockchains should be used in conjunction with one another?&nbsp;Well, in order to answer these (and similar) questions, you should first be aware of what EXACTLY makes Solana so attractive.</p>\n<h2>What are the Main Features of Solana?</h2>\n<p>As I&rsquo;ve mentioned earlier, Solana aims to <strong>improve on all of the core aspects of Ethereum.</strong> These include things such as transaction speeds, smart contract creation, fees, use of its consensus algorithm, and general usability. Let&rsquo;s cover each of these, in a simple-to-understand manner.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-3.o.jpg/" alt=\"What is Solana in crypto: The main features of Solana.\" width=\"800\" height=\"422\" /></p>\n<p>Imagine that you&rsquo;re planning to send some money to your friend in another country. Perhaps you owe them money or are buying that awesome console game off of him, now that your console supports it<em>.</em></p>\n<p>You have two methods (or, two payment gateways) of sending the money - let&rsquo;s call them Method A and Method B. With Method A, you will send the money, and will have to wait a few hours for it to arrive to your friend. If you send the money with Method B, though, as soon as you press the &ldquo;Send&rdquo; button, your friend will receive the money - it&rsquo;s instant!</p>\n<p>This is rather similar to how transactions on Ethereum and Solana work. Ethereum can handle up to around <strong>40 transactions per second.</strong> Sounds pretty decent, right? Well, yes - until you find out that Solana can handle up to almost <strong>70,000 transactions per that same second.</strong> And this is the future of Ethereum too.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-4.o.jpg/" alt=\"What is Solana in crypto: 70,000 transactions per second.\" width=\"800\" height=\"341\" /></p>\n<p>The difference isn&rsquo;t anything to scoff at! Transaction speeds on Solana are astonishing, and you don&rsquo;t even need to compare it to today's Ethereum! And to compare and understand these metrics globally, take traditional banking, as an example - VISA can theoretically handle up to <strong>24,000 transactions per second! </strong>70k on a blockchain, VS 24k today in real life.&nbsp;</p>\n<p>Do you feel the difference and why blockchain tech is booming so much? <em>I feel it with, without a doubt!&nbsp;</em></p>\n<p>Now, let&rsquo;s stick to that same example of you sending money to your friend. Let&rsquo;s say, you want to send $10. If you send it with slow Method A, not only will you have to wait longer for the money to arrive to your friend, you will also have to pay, say, $4, as a transaction fee. While sending the same $10 via Method B, the transaction fee will be just a few cents.</p>\n<p>So you pay more for the slowest service, <em>how fun is that? </em>And&hellip; does it make any sense? It&rsquo;s like paying triple for the economy class flight instead of getting business class on a bargain.</p>\n<p>This is another huge point that comes up when talking about Solana. The network allows users to make <strong>transactions for a fraction of the cost</strong> <strong>that you would pay on Ethereum.</strong></p>\n<p>Now, when it comes to smart contracts, there is a section <strong>\"<a href=https://www.bitdegree.org/"/crypto/learn/what-are-smart-contracts/">What are Smart Contracts?</a>\".</strong> Check it out, if you want to understand the topic in-depth! Here, I&rsquo;ll just mention that smart contracts are <strong>special automated agreements</strong> that are designed to perform certain processes without human intervention.</p>\n<p>Now, initially, smart contracts were an invention of Ethereum. ETH was the first blockchain that came up with the concept, and the developers behind the network in question have taken the concept very far. Solana, however, does also support smart contract development.</p>\n<p>On Solana, smart contract development is much faster and simpler than on ETH. This is due to a variety of reasons, actually. Solana uses a different programming software than Ethereum, is simpler to get into, and requires less time to truly be grasped by developers.</p>\n<h2>What is Proof-of-History?</h2>\n<p>Now, whenever you're researching Solana, the term &ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-history-poh/">Proof-of-History&rdquo; is bound to come up, all the time.</p>\n<p>In this part of the section, we&rsquo;ll have to get just a little bit technical - worry not, though, since I&rsquo;ll explain all of the concepts that we&rsquo;ll be talking about, or lead you to resources where you can learn more.</p>\n<p>In the world of crypto, there&rsquo;s a concept called &ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-consensus-mechanism/">consensus algorithm</strong></a>&rdquo; (or consensus mechanism). Essentially, what this refers to is the way of how the communities behind different blockchains make decisions, and come to agreements on serious questions and issues.</p>\n<p>The most popular consensus algorithms are <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-work-pow/">Proof-of-Work and <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake. At first glance, you might think that Solana uses a different consensus algorithm - Proof-of-History. Well, let me tell you right off the bat - that&rsquo;s not the case!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-6.o.jpg/" alt=\"What is Solana in crypto: Proof-of-History protocol.\" width=\"800\" height=\"217\" /></p>\n<p>Proof-of-History is actually just an <strong>improved version of Proof-of-Stake, </strong>the mechanism that will be adopted by Ethereum 2.0 probably in upcoming years. In addition to all of the staking functionality that you have with Proof-of-Stake, Proof-of-History also implements universal timestamps for the transaction confirmations.</p>\n<p>Traditionally, when different <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-validator/">validators on the network confirm transactions, they send that information relying on their own local clock timestamp without knowledge of any other participants' actual clocks in the same network.&nbsp;In other words, if you&rsquo;re based in New York, and your friend is located in Berlin, even if you confirm the transaction at the same time, the timestamps will be very different.</p>\n<p>The lack of a standardized clock, or, let&rsquo;s say, a universally-trusted time source, meant that when a transaction proceeded, there was no guarantee that every other active party in the network would stay synchronized with the same timestamp you set. And this is a huge bump for network speed because it takes time to figure out what happens, and <strong>time is everything on a blockchain.</strong></p>\n<p><strong><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-7.o.jpg/" alt=\"What is Solana in crypto: transaction confirmation in chronological order.\" width=\"800\" height=\"232\" /></strong></p>\n<p>Normally, most &ldquo;smart&rdquo; blockchains, like Ethereum, rely purely on external mechanisms to add their timestamp &mdash; which they then apply to confirm all transactions in the order they were received.</p>\n<p>So, as we see, <strong>network synchronization is the key feature of Solana. </strong>Proof-of-History sorts this out by arranging all transaction confirmations in an organized, set chronological order. Allow me to give you an example.</p>\n<p>Imagine that you&rsquo;re working from home, and have decided to order a few things, since you can&rsquo;t really be arsed to go out. You order groceries from the store, some lunch from the local restaurant, and a book from a bookstore in another town. You did all of the ordering in that manner.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-8.o.jpg/" alt=\"What is Solana in crypto: An example of ordering groceries.\" width=\"800\" height=\"421\" /></p>\n<p>However, your lunch came in first, since the restaurant was half-empty. The book came in second, since they noticed that there&rsquo;s a copy in a store near you. And lastly, you received your groceries, since there was a traffic jam in that part of town.</p>\n<p>Now, while all of these processes happened in a very random order, you have your app, where you can check EXACTLY when you&rsquo;ve asked for each order to be sent out, and when they WERE sent out by the respective establishments. No matter when they came in, you know the time they were sent to you!</p>\n<p>Now, do keep in mind that I&rsquo;ve discussed a very simplified and broad version of Proof-of-History. The concept is much more difficult than that, and there are other aspects that need to be kept in mind.</p>\n<p>The final point that I want to leave you with is the idea of<strong> &ldquo;Ethereum killers&rdquo;. </strong>Solana and similar projects are often labeled like that - the communities behind these blockchain networks believe that they will surpass Ethereum, and become the superior crypto projects!</p>\n<p>With time, though, it&rsquo;s becoming apparent that reality isn&rsquo;t as simple as that. These yet advanced &ldquo;Ethereum killers&rdquo; often have many issues of their own. For example, Solana was taken down in December 2020, due to a bug in the network - that&rsquo;s worrying since decentralized projects shouldn&rsquo;t be so prone to complete network shutdowns!</p>\n<p>On top of that, there are also fears regarding the decentralization aspect of Solana - the team behind the blockchain project has been criticized for <strong>sacrificing decentralization in order to achieve those amazing transaction speeds</strong> we&rsquo;ve talked about earlier in this section.</p>\n<p>With Ethereum getting ready to launch a huge update called <strong>ETH 2.0,</strong> it&rsquo;s becoming more and more obvious that crypto fans shouldn&rsquo;t search for &ldquo;Ethereum killers&rdquo;, but rather, aim to create a decentralized, blockchain-powered future together. Solana definitely does have the potential to become a significant part of that future!</p>","meta_title":"What Is Solana in Crypto? Is It Better Than Ethereum?","meta_description":"Trying to figure out what is Solana in crypto? Why it's so special and what are its fundamentals? You'll find all the answers right here!","meta_keywords":"what is solana crypto, what is solana, what is solana used for, what is solana coin, what is solana blockchain, where can i buy solana crypto, where to buy solana crypto","order":10,"language":"en","created_at":"2022-05-03T07:58:27.000000Z","updated_at":"2022-10-17T07:40:22.000000Z","modified_content":"<p>In this section, I will tell you all about <strong>what is Solana in crypto.&nbsp;</strong>This is one of those cryptocurrencies that definitely deserves a section of its own, since it's a project that all crypto enthusiasts should be aware of!</p>\n<p>So, when <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum came around in 2015, it was a piece of revolutionary crypto technology. With time, however, there have been multiple new projects that have aimed to improve all aspects of ETH. Solana is often viewed as one of the most successful of these projects.</p>\n<p>In this section, we&rsquo;re going to answer what Solana is. To be more specific, I&rsquo;ll tell you about the fundamentals of Solana, why it&rsquo;s so special, and we&rsquo;ll also touch on the idea of &ldquo;Proof-of-History&rdquo;, too!</p>\n<p><em>So, let&rsquo;s go!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"What is Solana in Crypto? (Beginner-Friendly Animation)\"\n title=\"What is Solana in Crypto? (Beginner-Friendly Animation)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: Is Solana an Improved Version of Ethereum?</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"Is Solana an Improved Version of Ethereum?\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"6H3tUtymTJQ\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">What is Solana in Crypto? (Beginner-Friendly Animation)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/6H3tUtymTJQ/hq720.jpg/"/n alt=\"What is Solana in Crypto? (Beginner-Friendly Animation)\"\n title=\"What is Solana in Crypto? (Beginner-Friendly Animation)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"What is Solana in Crypto? (Beginner-Friendly Animation)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"6H3tUtymTJQ\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>What is Solana?</h2>\n<p>In very very short, Solana is today&rsquo;s future Ethereum 2.0 in some kind. But let&rsquo;s begin by answering the fundamental question, first - what is Solana, exactly?</p>\n<p>Well, <strong>Solana is a cryptocurrency project that&rsquo;s very similar to Ethereum</strong> - the second-largest crypto platform in the world. Same as Ethereum, Solana aims to provide its users with the tools and environment to create <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-decentralized-applications-dapps/">decentralized applications</strong></a>, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-smart-contract/">smart contracts</strong></a>, and other awesome projects.</p>\n<p>All these are the biggest differences comparing those two to <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin. Let&rsquo;s call them smart chains, as they aim to have some utility logic developed and not just assets with some kind of monetary value.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-1.o.jpg/" alt=\"What is Solana in crypto: Solana and Ethereum.\" width=\"800\" height=\"708\" /></p>\n<p>Now, if what I&rsquo;ve just blurted out sounds like alien-speak, I highly recommend you to read previous sections in this <strong>BitDegree Crypto 101 Handbook,</strong> before we continue with Solana. This will help you get a better understanding of what I&rsquo;m talking about, and about the world of crypto, in general!</p>\n<p>A good way of how you can look at it is this - imagine that you&rsquo;re using the same game console for over 7 or 8 years now. It does the job, and it is reliable, but does also have issues, too - it&rsquo;s too old, kinda slow, no latest games are available for it, and it tends to heat up really bad from time to time. Not to mention the fact that it might not support your favorite game's latest version, which was just released on a different console brand.</p>\n<p><em><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-2.o.jpg/" alt=\"What is Solana in crypto: An example with a game console.\" width=\"800\" height=\"470\" /></em></p>\n<p>Now, one day, at your local game store, you notice that there&rsquo;s a brand new console of a different brand being advertised - one that&rsquo;s MUCH faster and more advanced than your current &ldquo;joy-machine&rdquo;. However, there&rsquo;s just one catch - all of your friends, and other people in your life are using the same old console that you are now.</p>\n<p><em>Should you switch?</em></p>\n<p>What if this new different brand console won&rsquo;t support some of the essential older games that you have played for your whole life on your old machine?</p>\n<p>Another point is that a firmware update is planned for your old console, too - one that should make it much faster and smoother to use, and maybe even bring the compatibility to your favorite games&rsquo; latest version, that you are still just dreaming to play&hellip; All of this is just plans and still not a reality, and also, you are not really sure if it will happen soon, in the first place.</p>\n<p>While I do admit that the above example is very specific, you must understand that this is how people view Ethereum and Solana. ETH is extremely popular and is the old standard on which smart contracts and other decentralized platforms are built. While Solana offers <strong>extremely fast transaction speeds and advanced scalability</strong> <strong>features</strong> that are also planned for Ethereum in upcoming years.</p>\n<p><em>Which one you&rsquo;ll choose? </em></p>\n<p>Should people switch from ETH to Solana? Maybe these two blockchains should be used in conjunction with one another?&nbsp;Well, in order to answer these (and similar) questions, you should first be aware of what EXACTLY makes Solana so attractive.</p>\n<h2>What are the Main Features of Solana?</h2>\n<p>As I&rsquo;ve mentioned earlier, Solana aims to <strong>improve on all of the core aspects of Ethereum.</strong> These include things such as transaction speeds, smart contract creation, fees, use of its consensus algorithm, and general usability. Let&rsquo;s cover each of these, in a simple-to-understand manner.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-3.o.jpg/" alt=\"What is Solana in crypto: The main features of Solana.\" width=\"800\" height=\"422\" /></p>\n<p>Imagine that you&rsquo;re planning to send some money to your friend in another country. Perhaps you owe them money or are buying that awesome console game off of him, now that your console supports it<em>.</em></p>\n<p>You have two methods (or, two payment gateways) of sending the money - let&rsquo;s call them Method A and Method B. With Method A, you will send the money, and will have to wait a few hours for it to arrive to your friend. If you send the money with Method B, though, as soon as you press the &ldquo;Send&rdquo; button, your friend will receive the money - it&rsquo;s instant!</p>\n<p>This is rather similar to how transactions on Ethereum and Solana work. Ethereum can handle up to around <strong>40 transactions per second.</strong> Sounds pretty decent, right? Well, yes - until you find out that Solana can handle up to almost <strong>70,000 transactions per that same second.</strong> And this is the future of Ethereum too.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-4.o.jpg/" alt=\"What is Solana in crypto: 70,000 transactions per second.\" width=\"800\" height=\"341\" /></p>\n<p>The difference isn&rsquo;t anything to scoff at! Transaction speeds on Solana are astonishing, and you don&rsquo;t even need to compare it to today's Ethereum! And to compare and understand these metrics globally, take traditional banking, as an example - VISA can theoretically handle up to <strong>24,000 transactions per second! </strong>70k on a blockchain, VS 24k today in real life.&nbsp;</p>\n<p>Do you feel the difference and why blockchain tech is booming so much? <em>I feel it with, without a doubt!&nbsp;</em></p>\n<p>Now, let&rsquo;s stick to that same example of you sending money to your friend. Let&rsquo;s say, you want to send $10. If you send it with slow Method A, not only will you have to wait longer for the money to arrive to your friend, you will also have to pay, say, $4, as a transaction fee. While sending the same $10 via Method B, the transaction fee will be just a few cents.</p>\n<p>So you pay more for the slowest service, <em>how fun is that? </em>And&hellip; does it make any sense? It&rsquo;s like paying triple for the economy class flight instead of getting business class on a bargain.</p>\n<p>This is another huge point that comes up when talking about Solana. The network allows users to make <strong>transactions for a fraction of the cost</strong> <strong>that you would pay on Ethereum.</strong></p>\n<p>Now, when it comes to smart contracts, there is a section <strong>\"<a href=https://www.bitdegree.org/"/crypto/learn/what-are-smart-contracts/">What are Smart Contracts?</a>\".</strong> Check it out, if you want to understand the topic in-depth! Here, I&rsquo;ll just mention that smart contracts are <strong>special automated agreements</strong> that are designed to perform certain processes without human intervention.</p>\n<p>Now, initially, smart contracts were an invention of Ethereum. ETH was the first blockchain that came up with the concept, and the developers behind the network in question have taken the concept very far. Solana, however, does also support smart contract development.</p>\n<p>On Solana, smart contract development is much faster and simpler than on ETH. This is due to a variety of reasons, actually. Solana uses a different programming software than Ethereum, is simpler to get into, and requires less time to truly be grasped by developers.</p>\n<h2>What is Proof-of-History?</h2>\n<p>Now, whenever you're researching Solana, the term &ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-history-poh/">Proof-of-History&rdquo; is bound to come up, all the time.</p>\n<p>In this part of the section, we&rsquo;ll have to get just a little bit technical - worry not, though, since I&rsquo;ll explain all of the concepts that we&rsquo;ll be talking about, or lead you to resources where you can learn more.</p>\n<p>In the world of crypto, there&rsquo;s a concept called &ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-consensus-mechanism/">consensus algorithm</strong></a>&rdquo; (or consensus mechanism). Essentially, what this refers to is the way of how the communities behind different blockchains make decisions, and come to agreements on serious questions and issues.</p>\n<p>The most popular consensus algorithms are <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-work-pow/">Proof-of-Work and <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake. At first glance, you might think that Solana uses a different consensus algorithm - Proof-of-History. Well, let me tell you right off the bat - that&rsquo;s not the case!</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-6.o.jpg/" alt=\"What is Solana in crypto: Proof-of-History protocol.\" width=\"800\" height=\"217\" /></p>\n<p>Proof-of-History is actually just an <strong>improved version of Proof-of-Stake, </strong>the mechanism that will be adopted by Ethereum 2.0 probably in upcoming years. In addition to all of the staking functionality that you have with Proof-of-Stake, Proof-of-History also implements universal timestamps for the transaction confirmations.</p>\n<p>Traditionally, when different <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-validator/">validators on the network confirm transactions, they send that information relying on their own local clock timestamp without knowledge of any other participants' actual clocks in the same network.&nbsp;In other words, if you&rsquo;re based in New York, and your friend is located in Berlin, even if you confirm the transaction at the same time, the timestamps will be very different.</p>\n<p>The lack of a standardized clock, or, let&rsquo;s say, a universally-trusted time source, meant that when a transaction proceeded, there was no guarantee that every other active party in the network would stay synchronized with the same timestamp you set. And this is a huge bump for network speed because it takes time to figure out what happens, and <strong>time is everything on a blockchain.</strong></p>\n<p><strong><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-7.o.jpg/" alt=\"What is Solana in crypto: transaction confirmation in chronological order.\" width=\"800\" height=\"232\" /></strong></p>\n<p>Normally, most &ldquo;smart&rdquo; blockchains, like Ethereum, rely purely on external mechanisms to add their timestamp &mdash; which they then apply to confirm all transactions in the order they were received.</p>\n<p>So, as we see, <strong>network synchronization is the key feature of Solana. </strong>Proof-of-History sorts this out by arranging all transaction confirmations in an organized, set chronological order. Allow me to give you an example.</p>\n<p>Imagine that you&rsquo;re working from home, and have decided to order a few things, since you can&rsquo;t really be arsed to go out. You order groceries from the store, some lunch from the local restaurant, and a book from a bookstore in another town. You did all of the ordering in that manner.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-solana-in-crypto-8.o.jpg/" alt=\"What is Solana in crypto: An example of ordering groceries.\" width=\"800\" height=\"421\" /></p>\n<p>However, your lunch came in first, since the restaurant was half-empty. The book came in second, since they noticed that there&rsquo;s a copy in a store near you. And lastly, you received your groceries, since there was a traffic jam in that part of town.</p>\n<p>Now, while all of these processes happened in a very random order, you have your app, where you can check EXACTLY when you&rsquo;ve asked for each order to be sent out, and when they WERE sent out by the respective establishments. No matter when they came in, you know the time they were sent to you!</p>\n<p>Now, do keep in mind that I&rsquo;ve discussed a very simplified and broad version of Proof-of-History. The concept is much more difficult than that, and there are other aspects that need to be kept in mind.</p>\n<p>The final point that I want to leave you with is the idea of<strong> &ldquo;Ethereum killers&rdquo;. </strong>Solana and similar projects are often labeled like that - the communities behind these blockchain networks believe that they will surpass Ethereum, and become the superior crypto projects!</p>\n<p>With time, though, it&rsquo;s becoming apparent that reality isn&rsquo;t as simple as that. These yet advanced &ldquo;Ethereum killers&rdquo; often have many issues of their own. For example, Solana was taken down in December 2020, due to a bug in the network - that&rsquo;s worrying since decentralized projects shouldn&rsquo;t be so prone to complete network shutdowns!</p>\n<p>On top of that, there are also fears regarding the decentralization aspect of Solana - the team behind the blockchain project has been criticized for <strong>sacrificing decentralization in order to achieve those amazing transaction speeds</strong> we&rsquo;ve talked about earlier in this section.</p>\n<p>With Ethereum getting ready to launch a huge update called <strong>ETH 2.0,</strong> it&rsquo;s becoming more and more obvious that crypto fans shouldn&rsquo;t search for &ldquo;Ethereum killers&rdquo;, but rather, aim to create a decentralized, blockchain-powered future together. Solana definitely does have the potential to become a significant part of that future!</p>","preview_url":"https://www.bitdegree.org/crypto/learn/what-is-solana-in-crypto","youtube_video":{"id":12,"channel_id":1,"sort":50,"video_title":"What is Solana in Crypto? (Beginner-Friendly Animation)","description":"What is Solana in crypto?\n\nSolana is a decentralized ecosystem built on blockchain technology. It’s often compared to Ethereum, since Solana aims to serve the same purpose, but also improve on all aspects of the ETH network.\n\nSolana has quickly grown in popularity - this is thanks to a combination of a few different reasons. It’s also the project that has popularized the concept of a “Proof-of-History” consensus algorithm. I’ll tell you all about it in this video, as well as cover the question of what is Solana, in general, and what unique features it has to offer to crypto enthusiasts around the world\n\nAre you a SOL hodler? Do you believe in the future of this project? Do share your opinions in the comments below!\n\nVideo Time Table:\n\n0:00 Introduction to What is Solana in Crypto\n0:45 What is Solana?\n3:06 What are the Main Features of Solana?\n6:10 What is Proof-of-History?\n9:16 Wrap-up: What is Solana in Crypto?\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#WhatisSolanaCrypto #WhatisSolana #WhatisSolanaUsedFor #WhatisSolanaCoin #WhatisSolanaBlockchain #WhereCanIBuySolanaCrypto #WheretoBuySolanaCrypto #ProofOfHistory","video_id":"6H3tUtymTJQ","duration":631,"view_count":799,"thumbnail_url":"https://i.ytimg.com/vi/6H3tUtymTJQ/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-02-22 09:09:00","created_at":"2022-02-23T00:00:41.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}}},"chapterTitle":"Cryptocurrencies","cryptoBookSection":{"id":25,"featured_image_id":6891,"original_id":null,"youtube_video_id":26,"author_id":42,"translator_id":null,"chapter_id":2,"title":"The Bridge Between Blockchains: Polkadot","slug":"what-is-polkadot-in-crypto","definition":"Did you know that in October 2017, about 10 million DOT tokens were minted on Ethereum following a successful ICO that raised $145 million?","status":"published","content":"<p>In this section, I&rsquo;ll tell you about Polkadot. Specifically, I&rsquo;ll tell you what is Polkadot in crypto, how it works, and what it&rsquo;s used for, in the first place.</p>\n<p>Imagine that you have decided to visit a friend who lives in another town. He&rsquo;s organizing a small get-together, and there will be people who will come from multiple other towns and cities. Driving there, however, all of you notice that there&rsquo;s a river that needs to be crossed, in order to get to the friend&rsquo;s house.</p>\n<p>Even though you and the other people are coming from different towns, each and every one of you needs to cross that river in order to be able to meet each other. Thankfully, though, there are bridges that allow you to cross, no sweat. <strong>In the crypto world, these bridges would be called Polkadot.</strong></p>\n<p><em>Now, let&rsquo;s get into more detail!</em></p>\n<h2>What is Polkadot?</h2>\n<p>I&rsquo;ll get back to the example I gave at the beginning of the section shortly. Before I do that, though, let&rsquo;s first explore WHAT Polkadot is.</p>\n<p><strong>Polkadot is a cryptocurrency project.</strong> It&rsquo;s a dedicated blockchain network <em>(meaning, it has its own blockchain)</em>, with <strong>a</strong> <strong>native coin called DOT. </strong>At the time I'm writing this section, Polkadot is the 11th largest cryptocurrency, by market capitalization.</p>\n<p>Polkadot has a very interesting history. It&rsquo;s a crypto project that sometimes gets mixed up with <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum, with people thinking that Polkadot actually uses Ethereum in its operations. Well, it does not - however, the two crypto projects are actually related, in a very specific way.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-01.o.jpg/" alt=\"What is Polkadot in crypto: Cryptocurrency project.\" width=\"1000\" height=\"556\" /></p>\n<p>Polkadot was created by a man named <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/who-is-gavin-wood/">Gavin Wood</a>.</strong> If this name sounds familiar to you, it&rsquo;s because Wood was the CTO of Ethereum, and one of the original founders of the cryptocurrency. After all co-founders of ETH left the project (except for <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/who-is-vitalik-buterin/">Vitalik Buterin</strong></a>), some of them went on to create cryptos of their own - Charles Hoskinson creating <a href=https://www.bitdegree.org/"/crypto/learn/what-is-cardano-in-crypto/">Cardano is one of the more well-known examples.</p>\n<p>Gavin Wood, on the other hand, created Polkadot. And, while Cardano is somewhat similar to Ethereum, as far as use cases go, Polkadot is very different.</p>\n<h2>How Does Polkadot Work?</h2>\n<p>In order to understand how Polkadot works, you can simply think about the name of this blockchain network - it has a hint for you to figure out!</p>\n<p>In the real world, polka dots are a pattern of dots on a surface, all placed close to each other, with an equal amount of distance between them. <strong>Imagine these dots as different blockchains - Ethereum, Cardano, Bitcoin, and so on.</strong></p>\n<p>Each of these blockchains is unique, and possesses features and functionalities that are only available on them. <em>However, what happens if two different and unique blockchains would want to communicate with each other?</em> Well, to put it simply, they couldn&rsquo;t - both blockchain networks have different cryptocurrencies associated with them, and are coded differently, too. In order for them to communicate, <strong>they need some sort of a bridge.</strong></p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-02.o.jpg/" alt=\"What is Polkadot in crypto: A blockchain bridge.\" width=\"1000\" height=\"606\" /></p>\n<p>This is where the example I gave at the beginning of the section comes in, too. If you want to visit your friend, but need to pass a river to do so, you&rsquo;ll need a bridge. This bridge allows you to get together with your friend on the other side of the river, to communicate and exchange information.</p>\n<p><strong>Well, in the cryptocurrency world, Polkadot acts as that bridge.</strong></p>\n<p>To be more specific, Polkadot allows two different blockchains to communicate with one another. It acts as a bridge between two networks that would otherwise have no ability to communicate!</p>\n<p>So think about it this way - imagine that each blockchain is a drawing tool. Pencils, markers, crayons, and so on. In order to use all of these tools to draw a picture, you need a sheet of paper. In this example, Polkadot would be that sheet of paper, allowing you to use the different drawing tools, and for the tools to interact with each other, forming a picture.</p>\n<p>In the cryptocurrency world, this is called &ldquo;<strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-interoperability/">interoperability&rdquo;. It sounds like a fancy term, but in actuality, it simply means &ldquo;connection&rdquo;, or &ldquo;information sharing.&ldquo;</p>\n<p>Interoperability is something that blockchain networks have struggled with, since the early days. While blockchains could be used on their own, there was no reliable way to connect them with one another, in order to create advanced-level projects in the crypto space. <strong>Polkadot aims to solve this interoperability problem by positioning itself as a &ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-layer-0/">Layer 0</a>&rdquo; network.</strong></p>\n<p><strong><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-03.o.jpg/" alt=\"What is Polkadot in crypto: Interoperability.\" width=\"1000\" height=\"420\" /></strong></p>\n<p>Not to get too much into the difficult technicalities, most blockchains out there are considered to be &ldquo;<strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-layer-1-blockchain/">Layer 1</a></strong>&rdquo;. So, the very first layer of the blockchain is the blockchain network itself - <em>that makes sense. </em><strong>However, in Polkadot&rsquo;s case, it positions itself as a &ldquo;Layer 0&rdquo; project</strong> - <em>meaning, it lies beneath the other blockchains.</em> Just like that sheet of paper that I&rsquo;ve mentioned earlier - you can use the drawing tools on it, and your picture will sit on top of the paper sheet!</p>\n<h2>Relay Chain and Parachains</h2>\n<p>So, now you have a better idea of what Polkadot is, and how it works, on the surface level. Moving on with the section, let&rsquo;s now take a closer look at the mechanics behind Polkadot, and how it&rsquo;s able to accomplish this &ldquo;Layer 0&rdquo; functionality. <em>Don&rsquo;t worry, because I will keep everything as simple as possible!</em></p>\n<p>On the surface level, <strong>Polkadot looks like a simple blockchain</strong>, just like any other. Essentially, it&rsquo;s a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake network</a>. </strong>In the most basic sense, it means that it uses <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-staking/">staking mechanics, and allows DOT coin holders to earn passive coins by staking some of their own.</p>\n<p>The two things that make Polkadot unique, and stand out from other blockchains, however, are <strong>the relay chain, and the parachains.</strong> <em>Let&rsquo;s break them down.</em></p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-04.o.jpg/" alt=\"What is Polkadot in crypto: The relay chain and the parachains.\" width=\"1000\" height=\"261\" /></p>\n<p><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-relay-chain/">The relay chain</strong></a> is the center of the Polkadot network. It&rsquo;s like the largest shopping mall, in the very center of a city. <strong>This is the most important part of the network</strong> - it allows Polkadot to work the way that it does!</p>\n<p><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-parachain/">Parachains are all of the different blockchain networks connecting to the relay chain. It&rsquo;s like the different shops that you&rsquo;ll find in that shopping mall I&rsquo;ve mentioned just now. All of these shops sell their own specific products but, by the end of the day, they are all reachable in that same shopping mall. This means that you don&rsquo;t need to drive to the other side of the city to visit some remote and isolated shop to get what you want.</p>\n<p>All of these different parachains do their own thing, and communicate with their own projects and networks. However, every once in a while, they all have to <strong>sync up with the relay chain.</strong></p>\n<p>It&rsquo;s like you working in a job, together with other employees! All of you have your own responsibilities, and tasks that need to be completed. However, every so often, there are meetings being held, so as to establish a clear direction of where the company is going, and to update each other on your work progress. This is a very similar example to that which is given by Gavin Wood, the founder of Polkadot, when he&rsquo;s explaining parachain functionality.</p>\n<p><em>Now, remember when I said that Polkadot is a Proof-of-Stake network? </em>Well, this is important because, in order to become an active member of the network, and validate the transactions happening on it, you will need to <strong>stake a lot of DOT coins.</strong></p>\n<p><em>What does &ldquo;a lot&rdquo; mean? </em>Well, this number is going to vary quite a bit, depending on the time that you&rsquo;re reading this section. However, it&rsquo;s a number that helps discourage foul play on the blockchain network, and ensures optimal security measures for anyone using it.</p>\n<p><strong>This is the other thing, too - Polkadot is often seen as a very reliable and secure network. </strong>It allows developers to create projects using parachains, which both boosts and innovates the ecosystem of Polkadot, as well as makes it easier to create new platforms and networks, too.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-05.o.jpg/" alt=\"What is Polkadot in crypto: A reliable and secure network.\" width=\"1000\" height=\"675\" /></p>\n<p><strong>One of the things that help Polkadot remain secure and reliable are</strong> <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-validator/">validator nodes</a>.</strong> Since there&rsquo;s a pretty high benchmark that you need to meet to become a validator on the network <em>(or, in other words, you need to have a LOT of DOT coins)</em>, there&rsquo;s a financial responsibility to take network validation seriously.</p>\n<p>Following that, another thing that helps keep the Polkadot network secure and running smoothly is <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-corporate-treasury/">the treasury</a>.</strong> The absolute majority of public blockchains have their own treasuries - when you trade coins, a certain part of the trading fee that you pay goes to those treasuries.</p>\n<p>The funds of the treasury can then be used to experiment with new updates, make suggestions, and build up the community, as a whole. Speaking of experimentation, though, when figuring out how does Polkadot work, you will also come across the term <strong>&ldquo;Kusama&rdquo;.</strong></p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-06.o.jpg/" alt=\"What is Polkadot in crypto: Kusama.\" width=\"1000\" height=\"918\" /></p>\n<p>Not to go into too much technical detail, Kusama is a separate space on the Polkadot blockchain where developers are able to experiment with their projects, and see how they would work in the real world. While not being entirely correct, for simplicity&rsquo;s sake, you can view it as a sort of <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-testnet/">a testnet</a>.</strong></p>\n<p>Overall, Polkadot is definitely one of the more-interesting blockchain projects that are currently still standing strong. It&rsquo;s being developed constantly, and offers a very unique approach to blockchain cross-chain communication.</p>","meta_title":"What Is Polkadot in Crypto and Why Is It Unique?","meta_description":"Wondering what is Polkadot in the crypto world? Why it's unique and what characteristics does it have? You'll find all the answers here!","meta_keywords":"what is polkadot, what is polkadot crypto, polkadot explained, what is polkadot cryptocurrency, how does polkadot work, what does polkadot do, what is polkadot parachain, what is polkadot crypto used for, who uses polkadot crypto, does polkadot use ethereum, what blockchain is polkadot on, polkadot coin explained, polkadot parachain auction explained","order":11,"language":"en","created_at":"2022-06-07T13:09:20.000000Z","updated_at":"2022-10-17T07:42:08.000000Z","modified_content":"<p>In this section, I&rsquo;ll tell you about Polkadot. Specifically, I&rsquo;ll tell you what is Polkadot in crypto, how it works, and what it&rsquo;s used for, in the first place.</p>\n<p>Imagine that you have decided to visit a friend who lives in another town. He&rsquo;s organizing a small get-together, and there will be people who will come from multiple other towns and cities. Driving there, however, all of you notice that there&rsquo;s a river that needs to be crossed, in order to get to the friend&rsquo;s house.</p>\n<p>Even though you and the other people are coming from different towns, each and every one of you needs to cross that river in order to be able to meet each other. Thankfully, though, there are bridges that allow you to cross, no sweat. <strong>In the crypto world, these bridges would be called Polkadot.</strong></p>\n<p><em>Now, let&rsquo;s get into more detail!</em></p>\n<div class=\"container\">\n <div class=\"row justify-content-center\">\n <div class=\"col-md-10 comparison-suggestion pb-3 mb-4\">\n <div class=\"d-flex flex-row\">\n <div class=\"text-center\">\n <div class=\"img-block-yt\">\n <img src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/images/compare-crypto-exchanges.gif/"/n alt=\"What is Polkadot in Crypto? (DOT Animated Explainer)\"\n title=\"What is Polkadot in Crypto? (DOT Animated Explainer)\" class=\"border-0\">\n <p>Video Explainer</p>\n </div>\n </div>\n <div class=\"col-xs-10 col-sm-10 col-md-10 text-left py-3 yt-info\">\n <h4 class=\"mb-1\">Video Explainer: The Bridge Between Blockchains: Polkadot</h4>\n <p class=\"py-1 mb-0 youtube-video-subtitle\">Reading is not your thing? Watch the \"The Bridge Between Blockchains: Polkadot\" video explainer</p>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div class=\"col-12 col-md-11 px-3\">\n <div class=\"wrapper mb-0\">\n <div class=\"youtube mb-4 bg-transparent p-0 video-modal-popup\" data-toggle=\"modal\"\n data-target=\"#video-modal\" data-id=\"WHe8iIRyZIo\" data-title=\"CryptoFinallyExplained\">\n <div class=\"video-gradient-top\"></div>\n <p class=\"text-left dyk-video-title\">What is Polkadot in Crypto? (DOT Animated Explainer)</p>\n <img src=https://www.bitdegree.org/"https://i.ytimg.com/vi/WHe8iIRyZIo/hq720.jpg/"/n alt=\"What is Polkadot in Crypto? (DOT Animated Explainer)\"\n title=\"What is Polkadot in Crypto? (DOT Animated Explainer)\"\n class=\"p-0\">\n <img class=\"play-button\" data-target=\"#video-modal\"\n src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/video-button.png/"/n alt=\"What is Polkadot in Crypto? (DOT Animated Explainer)\">\n </div>\n </div>\n </div>\n </div>\n <div class=\"row justify-content-center text-center\">\n <div>\n <a href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n class=\"btn yt-promo mb-2\" target=\"_blank\" rel=\"nofollow noopener\">\n <div class=\"row justify-content-center align-items-center mx-0 text-center\">\n <div class=\"col-4 col-md-4\">\n <i class=\"fab fa-youtube yt-dyk-btn\"></i>\n </div>\n <div class=\"col-8 col-md-8 text-center yt-promo-text\">\n <h4 class=\"m-0 text-white\">SUBSCRIBE</h4>\n <span>ON YOUTUBE</span>\n </div>\n </div>\n </a>\n </div>\n </div>\n </div>\n </div>\n</div>\n<div class=\"modal fade\" id=\"video-modal\" tabindex=\"-1\" role=\"dialog\" aria-labelledby=\"WHe8iIRyZIo\">\n <div class=\"modal-dialog modal-dialog-centered modal-lg\" role=\"document\">\n <div class=\"modal-content\">\n <div class=\"modal-body p-0\">\n <button type=\"button\" class=\"video-modal-close close\" data-dismiss=\"modal\" aria-label=\"Close\">\n <i aria-hidden=\"true\" class=\"fas fa-times\"></i>\n </button>\n <div id=\"iframe\"></div>\n </div>\n <a class=\"text-decoration-none\"\n href=https://www.bitdegree.org/"https://www.youtube.com/c/CryptoFinallyExplained?sub_confirmation=1\%22\n rel=\"nofollow noopener\" target=\"_blank\">\n <div class=\"modal-footer p-0 d-block bg-white\">\n <div class=\"row justify-content-center m-0\">\n <div class=\"col-3 col-md-4 col-lg-2 p-0\">\n <img class=\"w-100 h-100\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/assets/crypto-subscribe.jpg/" alt=\"Subscribe\">\n </div>\n <div class=\"col-9 col-md-8 col-lg-2 px-0 d-flex\">\n <div class=\"modal-subscribe w-100\">\n <p class=\"m-0 mt-1 mr-3\">SUBSCRIBE<br>\n <span class=\"m-0\">ON YOUTUBE</span>\n </p>\n </div>\n </div>\n <div class=\"col-12 col-md-12 col-lg-8 p-0 text-center d-flex justify-content-center align-items-center\">\n <div class=\"modal-subscribe-text\">\n <h4 class=\"m-0\">Understand crypto with ease</h4>\n <span>New explainer videos every week!</span>\n </div>\n </div>\n </div>\n </div>\n </a>\n </div>\n </div>\n</div>\n<h2>What is Polkadot?</h2>\n<p>I&rsquo;ll get back to the example I gave at the beginning of the section shortly. Before I do that, though, let&rsquo;s first explore WHAT Polkadot is.</p>\n<p><strong>Polkadot is a cryptocurrency project.</strong> It&rsquo;s a dedicated blockchain network <em>(meaning, it has its own blockchain)</em>, with <strong>a</strong> <strong>native coin called DOT. </strong>At the time I'm writing this section, Polkadot is the 11th largest cryptocurrency, by market capitalization.</p>\n<p>Polkadot has a very interesting history. It&rsquo;s a crypto project that sometimes gets mixed up with <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum, with people thinking that Polkadot actually uses Ethereum in its operations. Well, it does not - however, the two crypto projects are actually related, in a very specific way.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-01.o.jpg/" alt=\"What is Polkadot in crypto: Cryptocurrency project.\" width=\"1000\" height=\"556\" /></p>\n<p>Polkadot was created by a man named <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/who-is-gavin-wood/">Gavin Wood</a>.</strong> If this name sounds familiar to you, it&rsquo;s because Wood was the CTO of Ethereum, and one of the original founders of the cryptocurrency. After all co-founders of ETH left the project (except for <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/who-is-vitalik-buterin/">Vitalik Buterin</strong></a>), some of them went on to create cryptos of their own - Charles Hoskinson creating <a href=https://www.bitdegree.org/"/crypto/learn/what-is-cardano-in-crypto/">Cardano is one of the more well-known examples.</p>\n<p>Gavin Wood, on the other hand, created Polkadot. And, while Cardano is somewhat similar to Ethereum, as far as use cases go, Polkadot is very different.</p>\n<h2>How Does Polkadot Work?</h2>\n<p>In order to understand how Polkadot works, you can simply think about the name of this blockchain network - it has a hint for you to figure out!</p>\n<p>In the real world, polka dots are a pattern of dots on a surface, all placed close to each other, with an equal amount of distance between them. <strong>Imagine these dots as different blockchains - Ethereum, Cardano, Bitcoin, and so on.</strong></p>\n<p>Each of these blockchains is unique, and possesses features and functionalities that are only available on them. <em>However, what happens if two different and unique blockchains would want to communicate with each other?</em> Well, to put it simply, they couldn&rsquo;t - both blockchain networks have different cryptocurrencies associated with them, and are coded differently, too. In order for them to communicate, <strong>they need some sort of a bridge.</strong></p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-02.o.jpg/" alt=\"What is Polkadot in crypto: A blockchain bridge.\" width=\"1000\" height=\"606\" /></p>\n<p>This is where the example I gave at the beginning of the section comes in, too. If you want to visit your friend, but need to pass a river to do so, you&rsquo;ll need a bridge. This bridge allows you to get together with your friend on the other side of the river, to communicate and exchange information.</p>\n<p><strong>Well, in the cryptocurrency world, Polkadot acts as that bridge.</strong></p>\n<p>To be more specific, Polkadot allows two different blockchains to communicate with one another. It acts as a bridge between two networks that would otherwise have no ability to communicate!</p>\n<p>So think about it this way - imagine that each blockchain is a drawing tool. Pencils, markers, crayons, and so on. In order to use all of these tools to draw a picture, you need a sheet of paper. In this example, Polkadot would be that sheet of paper, allowing you to use the different drawing tools, and for the tools to interact with each other, forming a picture.</p>\n<p>In the cryptocurrency world, this is called &ldquo;<strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-interoperability/">interoperability&rdquo;. It sounds like a fancy term, but in actuality, it simply means &ldquo;connection&rdquo;, or &ldquo;information sharing.&ldquo;</p>\n<p>Interoperability is something that blockchain networks have struggled with, since the early days. While blockchains could be used on their own, there was no reliable way to connect them with one another, in order to create advanced-level projects in the crypto space. <strong>Polkadot aims to solve this interoperability problem by positioning itself as a &ldquo;<a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-layer-0/">Layer 0</a>&rdquo; network.</strong></p>\n<p><strong><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-03.o.jpg/" alt=\"What is Polkadot in crypto: Interoperability.\" width=\"1000\" height=\"420\" /></strong></p>\n<p>Not to get too much into the difficult technicalities, most blockchains out there are considered to be &ldquo;<strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-layer-1-blockchain/">Layer 1</a></strong>&rdquo;. So, the very first layer of the blockchain is the blockchain network itself - <em>that makes sense. </em><strong>However, in Polkadot&rsquo;s case, it positions itself as a &ldquo;Layer 0&rdquo; project</strong> - <em>meaning, it lies beneath the other blockchains.</em> Just like that sheet of paper that I&rsquo;ve mentioned earlier - you can use the drawing tools on it, and your picture will sit on top of the paper sheet!</p>\n<h2>Relay Chain and Parachains</h2>\n<p>So, now you have a better idea of what Polkadot is, and how it works, on the surface level. Moving on with the section, let&rsquo;s now take a closer look at the mechanics behind Polkadot, and how it&rsquo;s able to accomplish this &ldquo;Layer 0&rdquo; functionality. <em>Don&rsquo;t worry, because I will keep everything as simple as possible!</em></p>\n<p>On the surface level, <strong>Polkadot looks like a simple blockchain</strong>, just like any other. Essentially, it&rsquo;s a <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake network</a>. </strong>In the most basic sense, it means that it uses <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-staking/">staking mechanics, and allows DOT coin holders to earn passive coins by staking some of their own.</p>\n<p>The two things that make Polkadot unique, and stand out from other blockchains, however, are <strong>the relay chain, and the parachains.</strong> <em>Let&rsquo;s break them down.</em></p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-04.o.jpg/" alt=\"What is Polkadot in crypto: The relay chain and the parachains.\" width=\"1000\" height=\"261\" /></p>\n<p><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-relay-chain/">The relay chain</strong></a> is the center of the Polkadot network. It&rsquo;s like the largest shopping mall, in the very center of a city. <strong>This is the most important part of the network</strong> - it allows Polkadot to work the way that it does!</p>\n<p><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-parachain/">Parachains are all of the different blockchain networks connecting to the relay chain. It&rsquo;s like the different shops that you&rsquo;ll find in that shopping mall I&rsquo;ve mentioned just now. All of these shops sell their own specific products but, by the end of the day, they are all reachable in that same shopping mall. This means that you don&rsquo;t need to drive to the other side of the city to visit some remote and isolated shop to get what you want.</p>\n<p>All of these different parachains do their own thing, and communicate with their own projects and networks. However, every once in a while, they all have to <strong>sync up with the relay chain.</strong></p>\n<p>It&rsquo;s like you working in a job, together with other employees! All of you have your own responsibilities, and tasks that need to be completed. However, every so often, there are meetings being held, so as to establish a clear direction of where the company is going, and to update each other on your work progress. This is a very similar example to that which is given by Gavin Wood, the founder of Polkadot, when he&rsquo;s explaining parachain functionality.</p>\n<p><em>Now, remember when I said that Polkadot is a Proof-of-Stake network? </em>Well, this is important because, in order to become an active member of the network, and validate the transactions happening on it, you will need to <strong>stake a lot of DOT coins.</strong></p>\n<p><em>What does &ldquo;a lot&rdquo; mean? </em>Well, this number is going to vary quite a bit, depending on the time that you&rsquo;re reading this section. However, it&rsquo;s a number that helps discourage foul play on the blockchain network, and ensures optimal security measures for anyone using it.</p>\n<p><strong>This is the other thing, too - Polkadot is often seen as a very reliable and secure network. </strong>It allows developers to create projects using parachains, which both boosts and innovates the ecosystem of Polkadot, as well as makes it easier to create new platforms and networks, too.</p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-05.o.jpg/" alt=\"What is Polkadot in crypto: A reliable and secure network.\" width=\"1000\" height=\"675\" /></p>\n<p><strong>One of the things that help Polkadot remain secure and reliable are</strong> <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-validator/">validator nodes</a>.</strong> Since there&rsquo;s a pretty high benchmark that you need to meet to become a validator on the network <em>(or, in other words, you need to have a LOT of DOT coins)</em>, there&rsquo;s a financial responsibility to take network validation seriously.</p>\n<p>Following that, another thing that helps keep the Polkadot network secure and running smoothly is <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-corporate-treasury/">the treasury</a>.</strong> The absolute majority of public blockchains have their own treasuries - when you trade coins, a certain part of the trading fee that you pay goes to those treasuries.</p>\n<p>The funds of the treasury can then be used to experiment with new updates, make suggestions, and build up the community, as a whole. Speaking of experimentation, though, when figuring out how does Polkadot work, you will also come across the term <strong>&ldquo;Kusama&rdquo;.</strong></p>\n<p><img style=\"display: block; margin-left: auto; margin-right: auto;\" title=\"\" src=https://www.bitdegree.org/"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-06.o.jpg/" alt=\"What is Polkadot in crypto: Kusama.\" width=\"1000\" height=\"918\" /></p>\n<p>Not to go into too much technical detail, Kusama is a separate space on the Polkadot blockchain where developers are able to experiment with their projects, and see how they would work in the real world. While not being entirely correct, for simplicity&rsquo;s sake, you can view it as a sort of <strong><a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-testnet/">a testnet</a>.</strong></p>\n<p>Overall, Polkadot is definitely one of the more-interesting blockchain projects that are currently still standing strong. It&rsquo;s being developed constantly, and offers a very unique approach to blockchain cross-chain communication.</p>","preview_url":"https://www.bitdegree.org/crypto/learn/what-is-polkadot-in-crypto","youtube_video":{"id":26,"channel_id":1,"sort":36,"video_title":"What is Polkadot in Crypto? (DOT Animated Explainer)","description":"What is Polkadot in crypto?\n\nPolkadot is a cryptocurrency project that has its own blockchain, as well as a native coin called DOT. What makes Polkadot unique is the fact that it acts as a “Layer 0” blockchain - in other words, its main goal is to increase the interoperability between blockchain networks, and allow different blockchains to communicate with each other better.\n\nWhile Polkadot might seem pretty simple on the surface, it’s an intricate crypto project that has a lot of different and unique details associated with it. In this video, I will tell you what is Polkadot, exactly, explain how it works, and what it’s used for, in the first place.\n\nDo you think Polkadot is an important part of the blockchain world? Does it succeed in its interoperability quest? Share your opinions in the comments section below!\n\nVideo Time Table:\n\n0:00 Introduction to What is Polkadot in Crypto\n0:54 What is Polkadot?\n1:59 How Does Polkadot Work?\n4:15 Relay Chain and Parachains\n7:38 Wrap-up: What is Polkadot in Crypto?\n\nMore Related Videos:\n?Coin vs Token https://www.youtube.com/watch?v=kNAC7CXFOTw\n?What is Cardano? https://www.youtube.com/watch?v=bn6Vxt_RTbI\n?What Does Staking Mean in Crypto? https://www.youtube.com/watch?v=irhlfrCrywo\n\nGet Quick Crypto Tips on Twitter - Follow:\nhttps://twitter.com/crypto_xplained\n\n#WhatisPolkadot #WhatisPolkadotCrypto #PolkadotExplained","video_id":"WHe8iIRyZIo","duration":489,"view_count":534,"thumbnail_url":"https://i.ytimg.com/vi/WHe8iIRyZIo/hq720.jpg","thumbnail_width":1280,"thumbnail_height":720,"published_at":"2022-06-06 15:17:21","created_at":"2022-06-06T23:00:02.000000Z","updated_at":"2023-05-21T23:00:04.000000Z","channel":{"id":1,"title":"CryptoFinallyExplained","channel_id":"UCOryUY0yxC08eJtK23mNgiA","main_playlist_id":"UUOryUY0yxC08eJtK23mNgiA"}},"featured_image":{"id":6891,"uuid":"8419c664-891c-434f-8de9-c483cd825616","public_url":"https://assets.bitdegree.org/crypto/storage/media/what-is-polkadot-in-crypto-featured-image.o.jpg","path":"crypto/storage/media/what-is-polkadot-in-crypto-featured-image.o.jpg","original_path":"crypto/storage/media/what-is-polkadot-in-crypto-featured-image.jpg","name":"what-is-polkadot-in-crypto-featured-image.o.jpg","original_name":"what-is-polkadot-in-crypto-featured-image.jpg","title":null,"alt":null,"width":768,"height":478,"disk":"spaces","status":"uploaded","readable_file_size":"87.09KB"}},"chapterList":[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"https://assets.bitdegree.org/crypto/assets/crypto-book/chapters/learn-blockchain.jpg","chapter_simple":"https://assets.bitdegree.org/crypto/assets/crypto-book/chapters-simple/blockchain-101.jpg","rating":100,"sections":[{"slug":"what-is-blockchain","title":"What is the Blockchain?","featured_image_id":6412,"status":"published","chapter_id":1,"language":"en","order":1,"modified_content":null,"preview_url":"https://www.bitdegree.org/crypto/learn/what-is-blockchain","featured_image":{"id":6412,"uuid":"152ba579-ce8d-488a-9e06-bcd99e976b7d","public_url":"https://assets.bitdegree.org/crypto/storage/media/what-is-blockchain-626fbe085a0cd.o.jpg","path":"crypto/storage/media/what-is-blockchain-626fbe085a0cd.o.jpg","original_path":"crypto/storage/media/what-is-blockchain-626fbe085a0cd.jpg","name":"what-is-blockchain-626fbe085a0cd.o.jpg","original_name":"what-is-blockchain.jpg","title":null,"alt":null,"width":768,"height":478,"disk":"spaces","status":"uploaded","readable_file_size":"93.86KB"},"youtube_video":null},{"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of 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Chapter 2: Cryptocurrencies

The Bridge Between Blockchains: Polkadot

Did you know that in October 2017, about 10 million DOT tokens were minted on Ethereum following a successful ICO that raised $145 million?
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8 minutes
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In this section, I’ll tell you about Polkadot. Specifically, I’ll tell you what is Polkadot in crypto, how it works, and what it’s used for, in the first place.

Imagine that you have decided to visit a friend who lives in another town. He’s organizing a small get-together, and there will be people who will come from multiple other towns and cities. Driving there, however, all of you notice that there’s a river that needs to be crossed, in order to get to the friend’s house.

Even though you and the other people are coming from different towns, each and every one of you needs to cross that river in order to be able to meet each other. Thankfully, though, there are bridges that allow you to cross, no sweat. In the crypto world, these bridges would be called Polkadot.

Now, let’s get into more detail!

What is Polkadot in Crypto? (DOT Animated Explainer)

Video Explainer

Video Explainer: The Bridge Between Blockchains: Polkadot

Reading is not your thing? Watch the "The Bridge Between Blockchains: Polkadot" video explainer

What is Polkadot in Crypto? (DOT Animated Explainer)

What is Polkadot in Crypto? (DOT Animated Explainer) What is Polkadot in Crypto? (DOT Animated Explainer)

What is Polkadot?

I’ll get back to the example I gave at the beginning of the section shortly. Before I do that, though, let’s first explore WHAT Polkadot is.

Polkadot is a cryptocurrency project. It’s a dedicated blockchain network (meaning, it has its own blockchain), with a native coin called DOT. At the time I'm writing this section, Polkadot is the 11th largest cryptocurrency, by market capitalization.

Polkadot has a very interesting history. It’s a crypto project that sometimes gets mixed up with Ethereum, with people thinking that Polkadot actually uses Ethereum in its operations. Well, it does not - however, the two crypto projects are actually related, in a very specific way.

What is Polkadot in crypto: Cryptocurrency project.

Polkadot was created by a man named Gavin Wood. If this name sounds familiar to you, it’s because Wood was the CTO of Ethereum, and one of the original founders of the cryptocurrency. After all co-founders of ETH left the project (except for Vitalik Buterin), some of them went on to create cryptos of their own - Charles Hoskinson creating Cardano is one of the more well-known examples.

Gavin Wood, on the other hand, created Polkadot. And, while Cardano is somewhat similar to Ethereum, as far as use cases go, Polkadot is very different.

How Does Polkadot Work?

In order to understand how Polkadot works, you can simply think about the name of this blockchain network - it has a hint for you to figure out!

In the real world, polka dots are a pattern of dots on a surface, all placed close to each other, with an equal amount of distance between them. Imagine these dots as different blockchains - Ethereum, Cardano, Bitcoin, and so on.

Each of these blockchains is unique, and possesses features and functionalities that are only available on them. However, what happens if two different and unique blockchains would want to communicate with each other? Well, to put it simply, they couldn’t - both blockchain networks have different cryptocurrencies associated with them, and are coded differently, too. In order for them to communicate, they need some sort of a bridge.

What is Polkadot in crypto: A blockchain bridge.

This is where the example I gave at the beginning of the section comes in, too. If you want to visit your friend, but need to pass a river to do so, you’ll need a bridge. This bridge allows you to get together with your friend on the other side of the river, to communicate and exchange information.

Well, in the cryptocurrency world, Polkadot acts as that bridge.

To be more specific, Polkadot allows two different blockchains to communicate with one another. It acts as a bridge between two networks that would otherwise have no ability to communicate!

So think about it this way - imagine that each blockchain is a drawing tool. Pencils, markers, crayons, and so on. In order to use all of these tools to draw a picture, you need a sheet of paper. In this example, Polkadot would be that sheet of paper, allowing you to use the different drawing tools, and for the tools to interact with each other, forming a picture.

In the cryptocurrency world, this is called “interoperability”. It sounds like a fancy term, but in actuality, it simply means “connection”, or “information sharing.“

Interoperability is something that blockchain networks have struggled with, since the early days. While blockchains could be used on their own, there was no reliable way to connect them with one another, in order to create advanced-level projects in the crypto space. Polkadot aims to solve this interoperability problem by positioning itself as a “Layer 0” network.

What is Polkadot in crypto: Interoperability.

Not to get too much into the difficult technicalities, most blockchains out there are considered to be “Layer 1”. So, the very first layer of the blockchain is the blockchain network itself - that makes sense. However, in Polkadot’s case, it positions itself as a “Layer 0” project - meaning, it lies beneath the other blockchains. Just like that sheet of paper that I’ve mentioned earlier - you can use the drawing tools on it, and your picture will sit on top of the paper sheet!

Relay Chain and Parachains

So, now you have a better idea of what Polkadot is, and how it works, on the surface level. Moving on with the section, let’s now take a closer look at the mechanics behind Polkadot, and how it’s able to accomplish this “Layer 0” functionality. Don’t worry, because I will keep everything as simple as possible!

On the surface level, Polkadot looks like a simple blockchain, just like any other. Essentially, it’s a Proof-of-Stake network. In the most basic sense, it means that it uses staking mechanics, and allows DOT coin holders to earn passive coins by staking some of their own.

The two things that make Polkadot unique, and stand out from other blockchains, however, are the relay chain, and the parachains. Let’s break them down.

What is Polkadot in crypto: The relay chain and the parachains.

The relay chain is the center of the Polkadot network. It’s like the largest shopping mall, in the very center of a city. This is the most important part of the network - it allows Polkadot to work the way that it does!

Parachains are all of the different blockchain networks connecting to the relay chain. It’s like the different shops that you’ll find in that shopping mall I’ve mentioned just now. All of these shops sell their own specific products but, by the end of the day, they are all reachable in that same shopping mall. This means that you don’t need to drive to the other side of the city to visit some remote and isolated shop to get what you want.

All of these different parachains do their own thing, and communicate with their own projects and networks. However, every once in a while, they all have to sync up with the relay chain.

It’s like you working in a job, together with other employees! All of you have your own responsibilities, and tasks that need to be completed. However, every so often, there are meetings being held, so as to establish a clear direction of where the company is going, and to update each other on your work progress. This is a very similar example to that which is given by Gavin Wood, the founder of Polkadot, when he’s explaining parachain functionality.

Now, remember when I said that Polkadot is a Proof-of-Stake network? Well, this is important because, in order to become an active member of the network, and validate the transactions happening on it, you will need to stake a lot of DOT coins.

What does “a lot” mean? Well, this number is going to vary quite a bit, depending on the time that you’re reading this section. However, it’s a number that helps discourage foul play on the blockchain network, and ensures optimal security measures for anyone using it.

This is the other thing, too - Polkadot is often seen as a very reliable and secure network. It allows developers to create projects using parachains, which both boosts and innovates the ecosystem of Polkadot, as well as makes it easier to create new platforms and networks, too.

What is Polkadot in crypto: A reliable and secure network.

One of the things that help Polkadot remain secure and reliable are validator nodes. Since there’s a pretty high benchmark that you need to meet to become a validator on the network (or, in other words, you need to have a LOT of DOT coins), there’s a financial responsibility to take network validation seriously.

Following that, another thing that helps keep the Polkadot network secure and running smoothly is the treasury. The absolute majority of public blockchains have their own treasuries - when you trade coins, a certain part of the trading fee that you pay goes to those treasuries.

The funds of the treasury can then be used to experiment with new updates, make suggestions, and build up the community, as a whole. Speaking of experimentation, though, when figuring out how does Polkadot work, you will also come across the term “Kusama”.

What is Polkadot in crypto: Kusama.

Not to go into too much technical detail, Kusama is a separate space on the Polkadot blockchain where developers are able to experiment with their projects, and see how they would work in the real world. While not being entirely correct, for simplicity’s sake, you can view it as a sort of a testnet.

Overall, Polkadot is definitely one of the more-interesting blockchain projects that are currently still standing strong. It’s being developed constantly, and offers a very unique approach to blockchain cross-chain communication.