Investing in crypto-assets carries risks of liquidity, volatility, and partial or total capital loss. Crypto-assets held are not covered by deposit and securities guarantee mechanisms.
Sign up for our newsletter
Partners
Coinhouse
Our accounts
2024 - all right reserved - coinhouse
Coinhouse
Coinhouse SAS with a capital of €210,000, RCS Paris 815 254 545, headquarters: 14 Avenue de l'Opéra 75001 Paris – support@coinhouse.com. Registered with the AMF for activities related to the purchase/sale of digital assets against legal tender, the exchange of digital assets for other digital assets, and the custody of digital assets for third parties under the registration number: E2020-001.
Coinhouse payment solutions
Company registered with the Paris RCS under the number 914 384 557, registered with the Prudential Control and Resolution Authority as a payment service agent under the number 727503 of the electronic money institution Treezor, headquartered at 33 Avenue de Wagram, 75017 Paris.
General conditions, disclaimers and legal documents.
One of the fundamental problems with blockchain networks such as Bitcoin or Ethereum is the lack of communication.
A smart contract on the Ethereum blockchain cannot verify that a transaction has taken place on the Litecoin blockchain, just as a Tezos service is unable to detect a Stellar transaction.
These blockchains are not interoperable, i.e. they are not compatible and therefore cannot collaborate with each other.
However, it has already been proven that this communication is useful, if not indispensable, for trading.
Decentralized finance protocols are successful not only because they enable crypto-currencies to be exchanged directly between users on a platform (without intermediaries), but also because they are composable and interoperable.
And they are, because they all run on the same blockchain, primarily Ethereum.
The problem is that the growing number of users on Ethereum has made the platform a little slower and more expensive, two disadvantages that the current rollout ofEthereum 2.0 hopes to erase.
What’s more, while Ethereum allows you to create your own virtual currency, it does not enable interoperability between the blockchains of different cryptocurrencies.
The ability to detect a payment on the Bitcoin blockchain could, for example, open up the entire Bitcoin valuation, the largest on the market, to every decentralized finance trader.
There are already intermediaries offering products to bridge this gap, for example wBTC and tBTC, which are representations of bitcoin on the Ethereum blockchain, but it would of course be more interesting to be able to do this directly, and without any intermediaries.
This is the question Polkadot seeks to answer.
Polkadot was founded by Dr. Gavin Wood, co-founder of Ethereum and creator of the Solidity programming language.
Launched in 2020, Polkadot is being developed by the Web3 Foundation, a Swiss non-profit organization, and Parity Technologies, headed by Gavin Wood.
The Polkadot team is made up of world-renowned developers and researchers, working together to create a scalable, interoperable blockchain network, enabling different blockchains to connect and share information in a decentralized way.
Polkadot consists of a central network, called the “relay chain”, which functions like a classic blockchain, with nodes, miners and all the infrastructure required for its operation.
Polkadot’s main network and blockchain are surrounded by secondary networks to external blockchains such as Bitcoin.
These secondary networks are called ” parachains “.
The role of the relay chain is to ensure the security of the parachains and relay messages between them.
Messages can consist of any type of data, and serve primarily to detect a transaction and relay this information to the other parachains.
Each parachain has a unique architecture depending on the blockchain to which it is connected, and of course has its own token.
This makes it possible for projects with totally incompatible architectures to communicate via a common interface.
The process can be summarized as follows: parachain 1 -> relay chain -> parachain 2 The arrows here represent the bridges that enable communication between the relay chain and the various parachains.
To sum up, Polkadot is a protocol that enables independent blockchains to be grouped together to carry out transactions between chains that are not normally compatible, all without the need for an intermediary (broker, exchange platform, etc.), but with security guaranteed by the relay chain across all the different branches.
Polkadot has also foreseen the existence of other parallel blockchains called “parathreads”.
Also grafted onto Polkadot ‘s relay chain , parathreads blockchains differ mainly from parachains in that they can accommodate several projects at the same time.
Less expensive, they offer a good alternative for Polkadot users who don’t need the dedicated and exclusive slot offered by each parathread.
Everything we’ve described here about relay chains, parachains and parathreads concerns users who want to trade.
But there is another type of stakeholder on the Polkadot platform, namely investors.
DOT tokens, native to the Polkadot blockchain, play an essential role in the ecosystem, enabling three main functions: network governance, staking and bonding.
Firstly, DOT holders can participate in network governance, influencing key decisions such as protocol updates.
Secondly, DOT tokens are used for staking, a method that secures the network and enables participants to earn rewards.
Finally, the DOT link is needed to connect new channels, called parachains, to the Polkadot ecosystem, promoting interoperability and network expansion.
Polkadot is therefore a project to watch, meeting a fundamental need for interoperability between blockchains.
It offers an original, innovative and high-performance architecture: parachains are theoretically capable of delivering up to 1,500 transactions per second, far more than Bitcoin and Ethereum.
Similar networks are also positioning themselves in this niche, such as Cosmos and Avalanche.
Share the article
Open an account