Polkadot operates very similarly to other cryptocurrencies with blockchain. Blockchains are digital ecosystems on which cryptocurrencies are built. Polkadot is already tickling the latent interest of investors in ensuring the crypto continues to grow.
Today, Polkadot boasts of a market cap of about $13 billion, currently ranked eleventh-largest cryptocurrency.
Given its market strength in the competitive crypto landscape, let’s walk ourselves through some tidbits of Polkadot, which could help in making decisions about investing in it.
1. Polkadot Has An Emerging Pool Of Developers
It is no doubt that the cryptocurrency market is still at its maturing phase, hence posing difficulty in the proper understanding of project fundamentals. With pockets of cryptocurrency in the market, market caps are often characterized by certain ambiguities.
Most of the coins have varying methods of validation, different solutions with less historical data.
Polkadot has a fantastic management team with the doubling of its development community from 197 members in 2019 to 388 by 2020. Although the figure is a fraction of the constituents of Ethereum developers Polkadot is gaining traction in the crypto space.
2. Polkadot’s Parachains Reduce Congestion
Parachains are used in solving problems on Polkadot. An interesting fact about Polkadot is that each of its applications has its respective mini blockchain/parachain that is connected to the main chain, instead of designing all the applications via one network.
In the real sense, this feature translates to having a high performance regardless of increased demand for a particular application.
3. Polkadot Communicates With Other Networks
Over 80% of decentralized applications (dApps) are built on the Ethereum network, hence making it the biggest programmable blockchain in the crypto space. Sadly, the Ethereum network has not enjoyed a steady growth trajectory. Until it launches the Ethereum 2.0 (upgrade), the Ethereum system is considerably low, expensive, and congested.
Also, it does not fully support other networks. For Polkadot, its speed and scalability are appealing and other networks.
4. Polkadot Is Faced With Strong Competition
Following the above fascinating facts about Polkadot, it is still faced with stiff from strong cryptocurrencies like Ethereum. However, an upgrade to Ethereum 2.0 will further make Ethereum to dominant in the advanced blockchain.
This feat would probably sniff life out from other emerging cryptocurrencies, which might further sink their survival in the competitive crypto market. An expensive security breach that would cost top cryptocurrencies their users’ confidence is the only saving grace crypto-like Polkadot would have to thrive in the market.
Polkadot might appear like a good investment, but stay woke to the fact that cryptocurrencies are volatile, so investment loss is possible. Invest with the money you can afford to lose.