Polkadot has gained the interest of a lot of crypto investors for a long time now. This is because of the growing value of its currency. It opened at $9.16 on January 1 and has reached an all-time high of $49.78 by May 2021.
During the crypto crash 2021 on September 2021, Polkadot saw an 80% drop in value as it dropped to $10.37. However, since then, it has risen to $46.76 (as of Nov 12) which is just a few points behind its all-time high. Should the investors be bearish or bullish? Would Polkadot reach a new time high before the end of the year? Here are some reasons I believe Polkadot could be a great investment for the rest of this year and even beyond it.
Bitcoin makes use of blockchain technology to facilitate the peer-to-peer monetary transaction. Such transactions are stored on the block by miners, who are paid for each mining process. The problem with bitcoin is that it can not handle large transactions in a short period. It performs between 3.3 to 7 transactions per second.
Ethereum helped reduce the scalability problem by performing up to 13 transactions per second. Mastercard performs up to 5000 transactions per second. But we have more people performing digital coins transaction and we need faster networks. That’s where Polkadot comes in.
Polkadot is proposed to be able to handle over 1million transactions per second (tps). This implies that its max tps is 9.285 faster than bitcoin and can process tps 248 times faster than Bitcoin. Now that is a major advantage Polkadot has over other networks.
2. Ecosystem of blockchain
In 2021 alone, over 30 blockchain networks have been created. They are all used for different purposes ranging from voting, real estate exchange, crypto exchange to supply chains, logistics, NFT Marketplaces, and many more. They all work independently of one another.
Imagine all the blockchains can be united and put in a single network.
That’s what Polkadot aims to achieve.
Polkadot aims to allow data to be transferred across blockchains. It is a unity network of heterogeneous blockchains which is called Parachains. This would enable interoperability and scalability for anything built on the network. This would also increase transaction speed among blockchains through ease of exchange of information.
3. Ease of Usability
The Polkadot network has made it easy for developers to build more software and services based on Polkadot. It works like decentralized apps on the Ethereum Blockchain. But unlike Ethereum, developers can create apps and also send data from other decentralized apps.
Imagine someone had to build software from the ground up with features like security, data storage, treasury, and biometrics. With Polkadot, those features are already available to use, so the thing to do is just to structure your software.
At a Polkadot Summit in 2020, Gavin Wood builds a decentralized app in an hour and a half, showing just how many resources and time can be saved. This feature would inevitably draw interest from developers and there would be no limit to the projects that can be built on the Polkadot Blockchain.
4. Easy Upgrade
Due to constant innovation in blockchain technology, there might be a need for the addition of new features or total upgrading of a blockchain network. Until now, this process has always been a hazardous one as there is always great havoc to ecosystems using that blockchain. This process is called hard-fork.
Gavin Wood, the founder of Polkadot Blockchain has proposed that Polkadot would be able to go through major upgrades without the need for a disruptive hard-fork.
Polkadot is young and has a lot of projects still in its pipeline. But its development team has an ambitious vision and if it continues to make great progress in creating a decentralized web 3.0, it could be a long-term winner.