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Is Polkadot (DOT) Still Worth It in 2024?
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Founded by Gavin Wood, Polkadot is touted as “a scalable, interoperable and secure network protocol for the next web (Web 3)”.
To achieve this, there are three core components of its main blockchain architecture: the relay chain (the network’s core chain), parachains (Polkadot-native chains) and bridges (ideal for interacting with different networks such as Bitcoin and Ethereum). I recommend exploring the lightpaper for a concise overview of the blockchain and organisation.
Because Polkadot allows any type of data to be sent between any type of blockchain, it unlocks a wide range of real-world use cases.
High network decentralisation
Unlike many blockchain networks that claim to be decentralised when they’re more like semi-centralised networks, Polkadot is one of the few that has a bona fide distributed setup.
It is the third-most decentralised blockchain, Bitcoin and Mina Protocol, with the foundation blockchain well ahead of its competitors. This is based on Polkadot’s Nakamoto Coefficient of 92.
This coefficient represents the minimum number of validators that could have 51% ownership of the entire network’s stake. This is according to Balaji S. Srinivasan and Leland Lee, who proposed this concept in July 2017 in the Medium post Quantifying Decentralization.
However, note that 92 refers to controlling 33% of the network. Thus, if accounting for majority (51%) control, this would be even higher. See Polkadot in Numbers — Annual Report 2023 for comprehensive information.
Ethereum and Solana have an NC of 25 and 31, respectively.
Why is this important? Maintaining sufficient decentralisation should remain one of the core aspects of a network, perhaps the most important one. This ensures it runs trustless (without an intermediary) and is set up to prevent an individual or small group from gaining majority control over a blockchain.
