In our Polkadot article, we introduced the unique blockchain initiative and its native coin DOT. Polkadot is an open-source project which the Web3 Foundation founded. The Web3 Foundation’s mission is to deliver Web 3.0, a decentralized internet where users fully control their data, identity, and destiny. Polkadot’s has an equally ambitious vision for Web 3.0, which much like the foundation aims to leverage blockchain technology creating a more private, decentralized internet.
The Web’s evolution to Web 3.0
In our Web 3.0 article, we discussed the evolution to web 3.0 which we will briefly cover here:
Web 1.0– the original web started in the early ‘90s with simple sites that were produced by creators with little to no interaction.
Web 2.0– began in the early 2000s with Amazon, Facebook, Twitter, Airbnb leading the way, offering dynamic multifunctional experiences across all devices. Web 2.0 is criticized for being too centralized, suffers from data breaches and surveillance, and has a focus on profits, through overly intrusive advertising, and from the selling of data.
Web 3.0 is the response to the issues found with Web 2.0, seeking to leverage blockchain technology, flipping the Web 2.0 model on its head. In essence, they wish to return to the original vision of Tim Berners-Lee, the web’s inventor, linking different programs directly to each other, with centralized applications converted to decentralized protocols.
Polkadot and the Web3 Foundation’s Relationship
Polkadot’s vision is to be a combining force for the thousands of blockchains already in existence. It wishes to do this by creating a new decentralized vision of the internet with a transparency focus. The Web3 Foundation is a Switzerland based non-prof started in 2017 by former Ethereum CTO and co-founder Gavin Wood, with Peter Czaban, and Robert Habermeier when Wood left Ethereum to start Parity Technologies. Pariety and Web3 began the initial development of Polkadot and by October 2017 had completed Polkadot’s ICO (Initial Coin Offering), raising a total of 145 million for the project.
The Web3 Foundation’s role is on fundamental research into cryptography, algorithms, networking, and economics. Web3 also works with blockchain development teams, providing them, and blockchain start-ups, grants and supporting the entire blockchain community’s growth and education.
The three entities of Web3, Parity, and Polkadot’s underlying mission is to further the development of decentralized web software protocols and blockchain technologies to create a more transparent internet. This system is intended to give users more control over their data. All three organizations (being interconnected) believe that the centralized monopolization of user data gives giant tech corporations and governments an overabundance of power and raises security risk. The world is in need of another option to correct these faults.
Polkadot’s Characteristics to bring about Web 3.0
To better understand how Polkadot is being designed to bring the Web3 Foundation’s vision of the new internet, we need to first understand the value and potential that Polkadot brings to the table through its main characteristics.
- 100% Interoperable platform- Polkadot allows for simplified blockchain to blockchain cross transfers via Polkadot’s relay chain.
Polkadot goes beyond simple coin-for-coin transfers, supporting a wide variety of data and assets to be transferred between different blockchains. By connecting to Polkadot, many separate types of blockchains can become interoperable via the Polkadot crypto network. Allowing for complex decentralized tasks to be completed while providing the same security as the Polkadot network. - Scalable Ecosystem (Economically and Transactionally)- Polkadot uses a model that is economically scalable by allowing interconnected validators to ensure the consensus and security of multiple blockchains. The Polkadot platform also allows for transactional scalability with reduced transaction times by spreading the network’s transactions among multiple parallel blockchains.
- Streamlined Blockchain Development- The substrate blockchain development framework allows software engineers to create a custom blockchain easily in minutes.
External blockchains which are connected to Polkadot can leverage true interoperability and Polkadot’s advanced security architecture which simplifies application development. - Upgradeable platform without the need for forks– The Polkadot network has been designed with the ability to upgrade itself both seamlessly and automatically, allowing for the speedy integration of new features and bug fixes. This capability comes without the need for a fork. The quick and straightforward upgradeability means that when advances to blockchain technology occur, the Polkadot network can improve its efficiency and security with little effort needed.
- Security Focused Ecosystem with Flexibility– Polkadot’s blockchain protocol increases data availability and transparency. The protocol allows blockchains to interact in a democratic way, giving each connected blockchain their own independent governance structure while enhancing the security of that blockchain through the network.
- Model of Decentralized Governance– The advanced model of governance that Polkadot employs involves all stakeholders in the most important decisions of the network. Network upgrades get carried out on-chain autonomously. This way, the development of the Polkadot network will reflect the values of the network’s community and will advance in a democratic fashion.
Moving Polkadot Towards the Vision of Web 3.0
The Polkadot network’s Genesis block launched on May 26th of 2020. Since this first block, the platform has been consistently growing. The ecosystem created has recently auctioned its first Parachain “slots,” moving it to an important chapter of its development.
In November of 2021, at nearly $45 billion (up from $15 billion in January 2021), Polkadot sits in the 8th position of all cryptos on the list of coin market caps. The project rivels nearly all other projects in terms of adoption in the industry.
At its core, Web 3.0 is an internet with users in control of their identity, data, and cash. As the globe increases its number of transactions, these are increasingly in digital form. The decisions we make result from the information we are provided. Our voting or buying is based on what we have been told by others, and we hope this is accurate. In today’s world, data can be manipulated, faked, and incorrectly transmitted, painting a picture that may not be true. For example, the things we buy may not be what is actually true. Just because a product on A****n has a 4.8-star rating does not mean it is that good, it may have been manipulated with fake reviews, or A****n has the ability to change the data for their “essential” product. Polkadot provides two things that will be needed for Web 3.0.
- Transactions must be guaranteed from true endpoints and authorized by the right people.
- The data that led to the transactions is uncorrupted and correct.
Polkadot’s linking of blockchains creating a network through its relay chain lets the interconnected blockchains communicate and pool security while allowing them to have independent state-transition functions. The different blockchains can serve unique and specific purposes, but interoperability is required to ensure the success of a genuinely trustless ecosystem. Polkadot’s design enables smart contracts on different chains to work and transact with each other providing a seamless experience for the user.
Polkadot’s system of interoperable blockchains can be utilized to fulfill the requirements of many real-world use cases. One of the most likely initial real-world uses for Polkadot is in DeFi (distributed finance). Setting up exchanges for different assets that give users secure, cheap, and efficient transactions will be a critical first step for the continued adoption of Polkadot. This movement forward can be furthered by connecting the blockchain exchanges so that multi-step processes can occur. I can buy your stock using my bitcoin, but you instantly receive payment in Ethereum, which is the currency you want for the stock. An added link to this for a nontypical financial transaction could be even more complex with two additional people who are playing a video game( the game is connected to the relay chain) one player wanting to sell an in-game sword to link the cryptocurrencies in a four-way trade may be the best conduit (cheapest in total) for the financial transaction above to occur, so they are added into the chain.
Polkadot could potentially make this a 100-step process rather than a four-step trade, making it the most economically efficient, and all parties can trust the process.
Summary
The possibilities of Polkadot’s relay chain to fulfill real-world use cases are vast. The Polkadot project stands at the forefront of the blockchain industry’s innovation and can be the bridge to Web 3.0. The triad of Polkadot, Parity, and the Web3 Foundation have a similar vision of a decentralized internet that is freer and more inclusive for the users. With the recent slot auction, the first steps in this direction have finally been taken towards achieving their common goal. Polkadot’s mission to bring blockchains together in an interoperable and secure way will bring the benefits of Web 3.0 to us all.
Disclaimer: The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, deltecbankstag.wpengine.com.
The co-author of this text, Robin Trehan, has a Bachelor’s degree in Economics, a Master’s in International Business and Finance, and an MBA in Electronic Business. Mr. Trehan is a Senior VP at Deltec International Group, deltecbankstag.wpengine.com.
The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.’
