What is Polkadot? DOT Explained with Animations

you know how we have covered a ton of different blockchains like solana and tezos and cardano and monero and it just seems like there's a never-ending list of these coins and platforms for you to throw your money at basically each one does something a little different but they say they're the next new and crazy idea that will solve the scalability trilemma well polka dot offers itself as something actually new they plan to be the very first layer zero solution we'll talk about what that means in a bit but first welcome to whiteboard crypto the number one youtube channel for crypto education and here we explain topics of the cryptocurrency world using analogies stories and examples so that you can easily understand them in this video we are going to explain what polka dot is how it plans to solve the big problem of blockchains talking to each other and as always at the end we'll get into the tokenomics of the dot coin and what that means for the future price in crypto we see an awful lot of emphasis given to names and sometimes they can seem a little odd the polka dot blockchain name can actually be a huge asset to help beginners visualize what it's actually about you can probably guess where this is going polka dot is kind of similar to you know polka dots the fabric pattern featuring a blank background with scattered dots is a good starting point to visualize this project that's because right now crypto is a little unfriendly we have a lot of these competing projects doing similar things using similar blockchains working in isolation each of these blockchains can basically be seen as one individual dot but that's just the start the reason polka dot is important is because it lets us connect all these chains with each other so imagine you have this huge field of polka dots but you could actually draw lines in between all the dots and start to connect them each dot would represent an individual block chain and drawing lines between them all connects all of these different projects now you might be wondering what problem does this actually solve well one of the biggest problems we constantly see in the crypto space is a lack of what they call interoperability the problem is like the problem in early personal computers before we even had the internet we have all these blockchains hanging out like stars and space drifting around without any actual way to interact with each other polka dot is basically a way to make it easy to create and connect blockchains to each other along with our example computers were great but the ability to actually send and receive information between two different computers really got people on board polkadot is betting that the same thing is going to be true for blockchains bitcoin and ethereum and cardano and all the other big chains might be great on their own but they need to be able to interact with each other easily this is where we get into the polka dot blockchain which actually serves as what they call a layer zero function think about it like a neighborhood we have our little crypto neighborhood with all our blockchains basically like individual houses but how do all these houses all get electricity water and roads so that they're all connected polka dot wants to get even more fundamental than layer one individual blockchains and just give them an easy way to connect them all together this layer zero foundation is intended to make building and using blockchains easier so now we kind of understand how it works how does polka dot actually work at its core polka dot is just a proof of stake blockchain that connects other blockchains to each other they're all connected but how do they actually become connected how do they maintain their connection and what does being connected actually do for those blockchains we're going to answer each one of these questions by talking about two main components of polka dot the relay chain and the many different para chains that exist on the network think about it like this the polka dot network actually works like a hub and spoke model for those unfamiliar with this analogy this basically means that there is one center and many different branches coming off of the center for polka dot the hub or center is the relay chain this is the basis of the network where all the different para chains come to achieve consensus as we mentioned before polka dot is a proof of stake blockchain and requires that validating nodes or basically people that want to participate in the network stake at least ten thousand dot coins which is pretty much the token used on the polka dot network kind of like ether on ethereum this ensures that those validating the blockchain are financially invested in its future and will not attack it or cheat so when all these validators come together to achieve consensus it happens right in the relay chain but if the point of polka dot is to connect different blockchains and dabs which are decentralized applications then how do these things maintain their own individual unique rules and use cases well that is where para chains come in para chains are the spoke part of the hub and spoke model that we mentioned earlier the pair of chains go and do their own thing whatever that use case of their specific blockchain is and then they come back to the relay chain for everything to sync up gavin wood who is the founder of polkadot describes this process like an office the employees in an office will have their own specific jobs that they do by themselves but every so often they come together and sync up and coordinate their work with meetings or phone calls para chains are simply timed to meet up with the relay chain every so often to make sure that everything is secure and on the same page in fact this shared security is a huge part of what makes polka dot attractive instead of having to secure your own network secure funding and figure out a million other details polkadot makes it easy to set up parachains quickly and easily which reduces the feedback loop time already you can see that polka dot is set up to be very responsive with new ideas and experiments which definitely makes it very robust and in some ways anti-fragile the two main tools that allow polkadot to change and adapt quickly and thoroughly are the treasury and its test network kusama now according to gavin wood kusama has a live fast dai young attitude and embraces chaos normally blockchain projects want to emphasize their reliability and security to counter the typical connotation that comes with being a crypto project now this isn't to say that polka dot is not reliable or secure but that they recognize the time and place for experimentation and adaptation let me make it simple for you kusama is basically a practice network now actually a lot of blockchain networks have things like this where users can test different things before they actually get launched on the real network the interesting thing about polka dots test network kusama is that kusama has real stakes the amount of money and stakes are much lower than the real polka dot network but it gives people enough of an incentive to not play around too much and actually try things that they are both ready for the real world and maybe a little risky also kusama isn't just a jv version of polka dots varsity platform because it shows which things are working and which aren't it actually ends up having a significant influence on the development of the real polka dot network so basically kusama is just a test net for pokedon the engineers might get upset at me for saying that though let's move on to the treasury now we've actually talked about treasuries and many other blockchain projects like cardano an official treasury is useful because you know that when you are using the blockchain to engage in transactions the fees from those transactions are helping the network as a whole these funds can be used for a variety of different reasons like community building and outreach marketing security and software development basically those who want to make changes can use the funds from the treasury by sending a deposit and then their deposit is refunded if the changes are accepted from the treasury and kasama to its fundamental basis polka dot clearly wants to position themselves as a platform for innovation interoperability scalability and experimentation to me it's actually a fresh idea in the world of crypto that may end up being the idea that ties everything together and actually creates a massive interconnected crypto ecosystem i know that sounds crazy but it's probably the best way i could put it personally i'm quite curious to see how this all plays out oh and as we in this video we wanted to let you know about a secret project that we've been working on if you're new to the world of decentralized finance or want to learn about how to make money using cryptocurrency we actually recently put together a guide for beginners that pretty much explains important ideas and very simple topics if you're interested you can grab a copy of that guide for free at whiteboardcrypto.com but you don't have to if you don't want to anyways thanks for watching we hoped you enjoyed this video we really hope that maybe you've learned something and most of all we hope to see you in our next video you

Channel: Whiteboard Crypto

Views: 386,767

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Id: YlAdEQp6ekM

Length: 8min 27sec (507 seconds)

Published: Sat Sep 18 2021