Exchange and transfer of digital assets
Exchange and transfer of digital assets can take place either with a trusted party, such as a cryptocurrency exchange, or in a nontrusted environment using smart contracts.
Ensuring data privacy
Overall, the Polkadot blockchain allows users to conduct transactions with high privacy and efficiency. This is because the blockchains they create do not expose user data to the public network. They handle a larger number of transactions, which could theoretically be over a million transactions per second (TPS).
Scalability and performance
Scalability and strong performance are achieved by splitting the blockchain into shards for recording individual transactions.
Functional division of ledgers
Polkadot allows for functional division of ledgers depending on different transaction types, such as registering a digital asset and selling it.
Connecting different blockchains into one network
Issuing new tokens
Operating smart contracts
Uploading updates without forks
Managing of the network by DOT token holders
Polkadot is a product of Parity Technologies and its leader Gavin Wood was one of the founders of Ethereum and the creator of the Solidity programming language used to program smart contracts in Ethereum and many other platforms. Polkadot is a scalable blockchain network based on a relay chain to which other blockchains (parachains) are connected for inter-blockchain communication.
Polkadot has multiple advantages over many existing blockchains. It already has integrated Ethereum 2.0 functionality and a unique structure that provides parachains, that is a blockchain inside a blockchain, or shards. In the Polkadot blockchain, shards send asynchronous messages between each other, and each has a unique state transition function (STF).
These parachains collect and process data and feed it into relay chains, which pass the processed data to other chains. Then the fourth component, called bridges, forwards the data back to the main chain, such as Ethereum, Bitcoin, Tron or any other platform.
The value is enormous because Polkadot creates a heterogeneous blockchain. The platform connects multiple chains into a single network, allowing them to process transactions simultaneously and exchange data between the chains securely.
This allows any arbitrary data to pass through Polkadot’s multi-chain environment, whether it’s real assets or tokens. Any blockchain can join the Polkadot infrastructure, which is basically a random set of validators using heterogeneous shards.
This means that Polkadot’s use cases are more significant than those of any other blockchain. This indicator includes transaction chains, oracle chains, identification chains, file storage chains, data distribution chains, IoT chains, funding chains and privacy chains.