INTRODUCTION:
Currently, the progress and growth surrounding the Cryptocurrency industry moves forward with great speed and due regard to efficiency. Initially BITCOIN was introduced with its demonstrable spike in price. Then, in response to the robust growth within the DeFi space, ETHEREUM has dominated the space. But as DeFi continues its expansion, investors are looking for vehicles to achieve investment portfolio diversification by hedging holdings in tokens that might leverage market share on the ETHEREUM network.
POLKADOT offers the necessary technical blockchain advances to overcome the interoperability issues present in the existing system. By allowing cross chain transfer of assets, tokens and data, POLKADOT is set apart from both BITCOIN and ETHEREUM through this broadening functionality absent in the other two ecosystems. In this regard, POLKADOT holds both present and future value.
POLKADOT AND BITCOIN:
Comparing POLKADOT and BITCOIN is like comparing apples and oranges. At first blush, both projects vary greatly in purpose, functionality, and overall design. As cross chain networks may be deemed essential to the burgeoning development of dApps and DeFi, POLKADOT'S operating structure of a base controlling relay chain together with a limitless number of independent blockchain parachains is clearly superior to the rigid proof-of-work model and strict adherence to decentralization present with BITCOIN.
Given the current functioning technical state of the internet in general, BITCOIN is a turtle. By linearly processing transactions, POLKADOT can reach volumes of 1000 tx/s, which number rises exponentially if data flows through parachains back to the main chain utilizing the bridge. In this light, POLKADOT'S technical superiority and scalability far exceeds that of BITCOIN.
Another major difference arises in the way users are compensated for participation and adoption incentives. Since inception, BITCOIN has rewarded miners even with the increase in difficulty of the computational task required to earn the reward. But as time has progressed BITCOIN mining and the resulting rewards has been squeezed into the hands of the ultra wealthy or large scale mining operations due to the associated costs. In contrast, as POLKADOT is decentralized, validators are present where users can stake coins and be assigned different roles. The reward of POLKADOT tokens is dependent on the number of token staked and the amount staked may also impact the projects overall development. These POLKADOT contrasts are totally inapplicable in the BITCOIN system.
POLKADOT AND ETHEREUM 2.0
As both POLKADOT and ETHEREUM 2.0 utilize shards to deal with the issues of latency, scalability, and transactional throughput, there are significant differences between the two distinct ecosystems. (In simple non-technical terms, sharding is the breaking of a chain into smaller chunks to accomplish a task)
As noted, both POLKADOT and ETHEREUM 2.0 are sharded networks, but the networks do operate differently. ETHEREUM 2.0 utilizes a Beacon Chain that differing parallel shards plug into to share information. However, this system is limited as only shards with the right structure may connect to the Beacon Chain (dApps developed within the ETHEREUM ecosystem).
In contrast, POLKADOT'S Relay Chain is more flexible in its ability to accept shards than the Beacon Chain. Within POLKADOT, each shard operates independently and makes its own rules. The Relay Chain operationally accepts widely different shards (parachains) which are then executed by the Validators using standardized WebAssembly, resulting in a higher degree of interoperability than the Beacon Chain. Chains operating outside POLKADOT can enter the POLKADOT system by utilizing the bridges. ETHEREUM 2.0 is absent the bridging mechanism to allow for dApps developed outside the ETHEREUM ecosystem to enter the Beacon Chain whereas appropriate bridging mechanisms are present in POLKADOT for alien ecosystems.
The fact that Applications developed in other chains with differing programming can connect to POLKADOT by bridging makes it highly scalable. Developers may deploy the existing resources present in their chain as-is on POLKADOT resulting in a cheaper and faster development cycle. Likewise, developers may continue to use other chains and additionally connect to POLKADOT to gain a larger network for their Application. With the limited interoperability present in ETHEREUM 2.0, it has yet to deal with these scalability issues.
Finally, I would be remiss to fail to note one key difference here. POLKADOT presently is a fully functional network, ETHEREUM 2.0 is still in development stage and not yet fully functional. Although the ETHEREUM brand has the distinction, reputation, and existence for a longer period of time, POLKADOT is readily available NOW. Given the readily available POLKADOT technology dApp developers may grow impatient for the implementation of ETHEREUM 2.0. And once these developers grow accustomed to enjoying the higher interoperability of POLKADOT, it will be nearly impossible to turn them to ETHEREUM 2.0 once implemented,
CONCLUSION
The potential for POLKADOT and for the dApps that operate on its network are without limit. Based on the foregoing, the superiority of the POLKADOT ecosystem over BITCOIN and ETHEREUM 2.0 is demonstrable. But this is one man's opinion and do not rely on the same as an investment endorsement, recommendation or advise of any type. Invest at your own risk.
I am merely an ordinary small investor who likes to share what I've learned and found interesting. Please take a few minutes and check out my other published articles. I am not in any way a financial advisor and as such, do your own research before investing. If you enjoyed this article please like it, comment and/or tip. Feedback is always welcome here.