What Is Polkadot And Why It Is a Good Investment in 2023
Polkadot is a cryptocurrency that holds much value but isn’t commonly discussed among many. Crypto projects. Its developers have sufficient knowledge of the crypto market and ensure it’s competent enough to compete.
Polkadot has lots of potential to give you high returns but needs to be carefully monitored for the long term.
The real question is whether Polkadot is a suitable investment for you. Let’s find out more in this article.
What is Polkadot (DOT)?
Polkadot is a decentralized Blockchain platform that allows the transfer of assets and the exchange of messages without any third-party intervention. The open-source protocol secured and united a growing ecosystem of specialized blockchains called Parachains. As a result, all apps on the network can communicate with each other across chains, forming the basis for a decentralized web.
The DOT token serves three purposes, and they are the following:
- Governance: Polkadot token holders have control over the protocol. All privileges, exclusive to crypto miners, are given to the DOT holders and include managing exceptional events such as fixes and protocol upgrades.
- Bonding: This is when new parachains are added and are non-useful or are removed by removing bonded tokens. In other words, this is proof of stake.
- Staking: Token holders keep networks secure by collecting rewards and staking DOT. The security system promotes complete decentralization and seeks to remove bad and uplift good actors.
Furthermore, blockchain technology stores information to create the following:
- A permanent timeline without the need to purify data
- Records can’t be edited for the reason of ensuring they are nearly impossible to hack
- The currency is decentralized, so any third party can’t hack it
- Visibility and transparency for anyone
What makes blockchains differ from banks?
Banking networks are centralized systems overlooked by a central bank, but blockchains are decentralized without any third party intervening in their business. In other words, banks are highly influenced by government intervention, but blockchains have one downside they allow online attackers to make money transfers anonymously.
However, remember that decentralized networks are more complex to hack than a bank’s centralized network. In addition, your money in a bank is safe thanks to the Electronic Fund Transfer Act, which makes all banks responsible for losses due to fraud.
On the other side, we have the crypto wallet, which is much harder to hack but nearly impossible to recover once hacked. So, in this case, everything becomes the same in the end.
Additionally, the speed of a transaction can be completed much faster through a decentralized network than a centralized one.
What is the current Polkadot price?
Although the crypto market is at one of its lowest periods, Polkadot still holds a market price of $5.79, ranked 11th. Furthermore, around 1.1 billion Polkadot coins are circulating now, and the market cap is at $6.57 billion.
During its peak, mid-last year, Polkadot was at around $44.71, but its value has drastically dropped because of the market crash. However, keep in mind that once the crypto market regains momentum, Polkadot might offer you some excellent long-term returns if you invest from now.
If you are interested in buying Polkadot with a credit card, you can do so on several platforms like Moonpay, Binance, Coinbase.com, etc. Now is the perfect time to buy Polkadot, so invest during this market crash to get the best long-term results.
Polkadot differs from competitors.
Polkadot is a newer cryptocurrency than its competitors and is less popular than Bitcoin, Ethereum, and other widely mentioned names. However, like Ethereum, it offers basic abilities that allow you to complete more complex tasks.
Considering all of this, what makes Polkadot different from its competitors?
Polkadot differs because of its parallel chains, a series of blockchains connected. These blockchains allow transaction speeds to be much faster than traditional ones. Thus, when you have multiple lanes for completing transactions, you have less chance of allowing network overload.
Polkadot creates protocols that allow its network to interact with other blockchains. Due to this, the blockchain is flexible and can serve more of your needs. Overall, Polkadot has captured the attention of several large European companies that support blockchain technology. Some popular ones include Deutsche Telekom, T-systems Multimedia Solutions, etc.
Who are Polkadot’s most significant competitors?
Polkadot is ranked in the top 15 cryptocurrencies, which means it has many competitors. Some of its main competitors are Ethereum and Cardano. Together, these technologies aim to connect more people worldwide and promote an environment-friendly society. However, let’s keep in mind that with its capacity, Polkadot has managed to rise in crypto rankings much faster than its competitors.
Smart contract capabilities started mid-last year and are already supporting hundreds of projects. On the other hand, we have Polkadot developers who are continuously creating new chains. Ethereum and Cardano constantly rely on existing networks, which limits network decentralization. Even though Polkadot has tough competitors, it still is unique from the rest.
Why are investors considering Polkadot?
Many investors are gaining interest in investing in Polkadot because of its level of interactiveness. Developers can link blockchains directly to the Polkadot system and create new blockchains. Investors’ attention is caught because of Polkadot’s developers, who continuously try to set up new chains within the network.
However, Bitcoin and Ethereum give investors a different perspective. They both have high values, and most investors don’t have the capital to buy the entire coin, forcing them to buy a fraction of the coin’s price. On the other hand, Polkadot can be purchased by just anyone!
There are investor contributions
The Polkadot foundation is designed to reward those who hold the coin. All token holders have the following rights over any platform they use:
- Network upgrades & fees
- Removing or establishing parachains
Additionally, Polkadot removes all bad investors by releasing their coins into the ecosystem. This allows better investors to improve the services of the coin.
What are some potential risks associated with Polkadot?
Polkadot was initially created by Gavin Wood, the Ethereum founder, back in 2016. Even though it is much newer than Ethereum, its track record is more minor and might pose a slight risk. Additionally, there are a few other risks associated with cryptocurrency, and they are the following:
- Any tangible asset doesn’t back up Polkadot
- The price of Polkadot can be volatile if not analyzed properly
- Depending on the country you live in, local governments might implement limitations
Is Polkadot a good investment in 2023?
The short answer is yes! Polkadot is undoubtedly a great cryptocurrency to invest in and is backed up by a major blockchain, superior developers, and even massive VC funds.
Additionally, cryptocurrency possesses many parachains that are becoming widespread each day. Let’s not forget that there are many new projects to expect down the line, so let’s wait and see!
Is Polkadot the future?
Polkadot has a lot of potential and is setting up an excellent future ahead. Polkadot has paved the way for new advanced technologies and trading tools, some of the main reasons it increased last year.
After the market crash is over, Polkadot should be on the run to new records.
Will Polkadot hit new heights in the future?
Yes, and yes! Even though it’s currently at around $7, Polkadot was once worth more than $40 in only a short period. We all need to pay close attention to how well crypto adoption goes. If it goes well, we can expect Polkadot to hit prices worth more than $500!
What did we learn from this article?
This article has shown us why Polkadot is a potential winner in the crypto market. Even though it’s not ranked in the top five cryptocurrencies, Polkadot still outperforms many of its competitors. So even during these turbulent times, Polkadot is performing well and could be the next big thing in the crypto market.
As a result, it’ll all depend on how the crypto adoption process goes. If that goes well, we might see Polkadot hit figures that we have never seen before, which is even more exciting. However, time will tell everything, so let’s stay tuned and see what Polkadot will offer us in the future!
Don’t hesitate to join the growing crypto community today!