Polkadot, What are we waiting for? Parachains & Auctions explained

polka dots the biggest bet against chain 
maximalism instead of trying to build   one blockchain to rule them all the goal of 
polka dot is to unite them they basically   want to make blockchains work together this 
seems like quite a task but if there is one   project that has the tools to achieve this 
feat it just might be polka dot the things   that set them apart are the following over 
a hundred thousand transactions per second   micro transaction fees a bridge to the bitcoin and 
ethereum network and interoperability it sounds   like the perfect place to start a whole new defy 
ecosystem on these are the things we want to see   but currently the main thing that we can do with 
our thought tokens is to stake them and this is   nothing new or revolutionary we can already 
do this with ethereum 2.0 or the crypto.com   coin so what is polka dot waiting for when are we 
going to see if they're winning the bet against   chain maximalism those are the questions we're 
going to answer in this video we're going to   take a closer look at the roadmap of polka dot 
and explain it in a simple understandable way   by the end of the video you will understand 
what a relay chain and the power chain are   and when they will be launched this will also 
mark the start of new use cases for our dot tokens i will start with a short and simple explanation 
of polka dots the issue that a lot of current   blockchains have is that they're bloated and 
slow they miss scalability which means they   cannot reach the throughput to operate on a global 
scale there are blockchains that offer a solution   for scalability but it almost always comes with 
a cost think of bad security or centralization a   great example is bitcoin it excels at one specific 
task bitcoin is perceived by many as digital gold   a secure store of value in its current state 
it's not really scalable so when there are   too many transactions you get a huge bottleneck 
it sounds like the solution could be something   really simple but it's really quite a challenge to 
be great at one thing so imagine trying to excel   at everything this is where polkadot comes in you 
can see polkadot as one big network where multiple   blockchains can connect to this connection makes 
it possible for blockchains to communicate and   process transactions in parallel imagine that 
you would like to create a gaming blockchain   connecting to the polkadot network would make 
it possible for your blockchain to purely focus   on the gaming use case it would rely on the 
polkadot network for security governance and   transaction speeds so that's the theory what about 
polka dot in practice an important thing to note   is that polka dot tries to be community driven so 
we cannot exactly predict where polka dots will   be in 5 or 10 years they do however have a launch 
roadmap you can see this as a phased rollout plan   with important milestones towards decentralization 
and a living ecosystem the next milestones will be   even more interesting they will make it possible 
for projects to be built on polka dots this will   mark the beginning of a new chapter this will 
also enable something that is highly anticipated   and that is the polka dot defy ecosystem so when 
is it coming when we look at the roadmap we see   that we're currently at the parachain rollout 
phase first things first what is a parachain   technically speaking it's quite complex but the 
concept itself is rather simple imagine the polka   dot network as a ring this ring is called the 
relay chain and it's the beating heart of polkadot   the task of this ring is to perform governance and 
staking transactions and it provides security to   the entire network so all the blockchains that are 
connected to this chain will benefit from these   things you can imagine a parachain as a sovereign 
blockchain that is linked to the relay chain   this can be a blockchain like we know them today 
to be clear blockchains linked to polkadot can   still have their own tokens and handle their own 
tasks like smart contracts and that brings us   to the following question why would a project 
want a parochian slot and connect to polkadot   not only can blockchains that connect to the 
polkadot network communicate with each other they   can also benefit from scalability governance a 
smaller workload and simple upgrades with smaller   workload i mean that projects no longer have 
to create a blockchain that can do everything   from security governance to let's say gaming 
for example they can now focus on one specific   task and make their blockchain excel at that 
another interesting point could be scalability   bitcoin can handle a maximum of 7 transactions per 
second ethereum a little bit more with 15 to 20.   visa is around 1700 actual transactions 
process per second in 2020 and polkadot lastly   blows them all out of the water with a maximum 
of over 160 thousands transactions per second   gavinwood claimed that this could potentially be 
increased to over 1 million this would make it   possible to prevent bottlenecks like we saw when 
d5 on ethereum spiked in popularity there were   basically too many transactions for the network 
to handle as you can imagine it can be quite   beneficial for a project to obtain a pair of chain 
slots on the polka dot network the issue is that   there's only a limited number of spots available 
the number of spots will increase gradually over   time but projects really want that first mover 
advantage to claim such a spot you will have   to lease it by winning a candle auction the term 
originated in the 16th century for selling ships   but in the context of polkadot a canal auction 
is used to randomize the exact moment the winner   of an auction is determined there will still be an 
official end to the auction but at a random moment   a snapshot will be taken of all the current bids 
the project with the highest bid at the moment of   the snapshot will be the auction winner to place a 
bit on a polka dot parachain slot you will need to   provide dot tokens the more dot tokens a project 
has the more chance it has to claim a parachain   slot so projects want to accumulate dots they 
can however do this in multiple different ways   during such a parachain auction dot holders can 
bond their cryptocurrency to support a project   that they believe should receive a parachain slot 
in order to incentivize users to support a project   that project may commit to airdrop tokens 
or provide other rewards to their supporters   this process is called a crowd loan if the project 
then wins the bonded dot tokens are locked by the   network for the duration of the perichain slot 
lease and they are returned when it expires   so to be clear you can't buy a slot on the 
polka dot network forever you can lease it   for a certain amount of time as you can imagine 
these crowd loans can hold very nice opportunities   if you support such a project by providing 
dots it is possible that you will be   rewarded with tokens of that project if that 
project then manages to become successful   that token that you received might become very 
valuable so you might be wondering when these slot   auctions and crowd loans are taking place next to 
the polkadot ecosystem there is the kosama network   think of this as the pre-production environment 
for polka dots it's important to note that this   is not just some test network for polka dots 
because there will be actual projects with   real cryptocurrencies on it before polka dot is 
going to launch their para chains they're first   going to test them on kusama the first parochian 
auction on kusama was held on the 15th of june   but don't worry there will be a new auction taking 
place roughly every two weeks the first winner was   kerbera which is akala's sister project on kusama 
basically karua is an all-in-one defy platform   and it was founded by the kala foundation the 
platform offers a range of financial applications   and examples include staking stable coins and 
decentralized exchange after each kennel auction   the winning power chain will be deployed to the 
network at the beginning of its lease periods   auctions will continue from here on on a rolling 
basis as more slots become available and previous   leases expire seeing that polka dot is community 
driven there is not an exact date yet for the   deployment of the first project on the polkadot 
network projects need to prove that they can run   smooth on kusama before the community will decide 
to open the polkadot network so you better keep an   eye on karua if it manages to do well on kusama 
there is a big chance that their sister project   akala will get deployed on polka dots i will 
discuss more projects like this with potential   in upcoming videos and that brings us to our 
conclusion so polka dot is progressing in their   roadmap and the current stops are parachains we 
know now that apparent chain can be an autonomous   blockchain with their own token so you can 
basically see this as an individual project   they're currently being deployed on kusama and 
slots are being auctioned through candle auctions   if the projects on kusama prove to be stable and 
successful the community can then decide to open   parachains on the polka dot network keep an eye 
on crowd loans if you're looking for projects   with potential where you want to get in early if 
kusama and then polkadot can deliver we're going   to see some very interesting things defy is coming 
to polkadot very very soon so that was it for this   video and i would like to thank you for watching 
please leave like and subscribe if you have not   already if anything was unclear or if you have 
any questions i also have a telegram and a discord   server where we can talk about cryptocurrency and 
finance in general i'll leave a link to those in   the description i also have a website where i 
post a transcript of my videos so you can read   it over again also leave a link to that in the 
description again thanks for watching and bye

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