Polkadot emerged out of a need to push blockchain technology further than Ethereum was capable of, Gavin Wood had a vision to create systems for a more trustworthy and scalable internet, Parity, Kusama and the Web3 foundation were also borne. As Wood elaborated in an interview with Laura Shin in December 2020, “Polkadot hopes to create a more general and abstract model to solve some problems in the blockchain industry. Bitcoin opened the basic scripting language, Ethereum expanded more financial transactions, and Polkadot hopes to create a more general model.”
Seeing the limits of Ethereum in 2016 and wanting to develop a more scalable blockchain, and system for creating blockchains for a more trustworthy version of the internet, the Polkadot was born in 2017 and has seen enormous growth in the number of developers working in the ecosystem, increased projects coming online and huge support from investment firms and venture capitalists in the last few years. In this first in a series of three articles, we hope to shed some light on the Polkadot ecosystem, how it came about, it’s unique technology and also the expansion of innovative projects in the ecosystem and what the future may hold.
You may have heard of ‘web3’ in 2021. Seemingly coming from nowhere, the term has actually been around since 2014 when Gavin Wood coined the term as a ‘decentralized online ecosystem based on blockchain’. Web3 has goals of ‘opening up’ the internet and making it less controlled by central figures, become a more trustworthy internet where users get paid for their data, as opposed to companies profiting from them. Web 2.0’s business model relies on user participation to create fresh content and profile data to be sold to third parties for marketing purposes. “Indeed, the internet has become a massive app store, dominated by centralized apps from Google, Facebook and Amazon, where everyone is trying to build an audience, collect data and monetize that data through targeted advertising”.
However, it hasn’t all been positive for the emerging technology. Like many disruptors, there has been its critics who argue that the new tech could also be prone to the same issues that plagued the current iterations of the web — particular the centralisation aspect.
The internet as we know it
The Web 2.0 that began to emerge around 2004 was vastly different to the web that immediately preceded it. It is a web that many defined it centralized, where many users interact via such as Uber, Facebook, Google and that these large companies sell users data for profiteering purposes. After diving headfirst into cryptoverse in 2013, it wasn’t long for Gavin Wood to realise the problems that plague Web 2.0 and the potential world that these new technologies could disrupt the the status quo and a new internet could be born — Web3.
If the defining characteristics of Web 2.0 were read (static) and write (user generated content creation), Web3 would be read-write & trust (the ability for users to trust the information they receive, which is blockchain verified). After living with Web 2.0 for more than 15 years, where data breaches occur on a daily basis (check have I been pwned?), centralisation of power, censorship rampant and more, many internet users have dreamed of a better and more fair version of the internet.
the Web3 Foundation
Wood along with Ashley Tyson and Peter Czaban founded the Web3 Foundation in 2017 with the goal of delivering a ‘decentralized and fair internet where users control their own data, identity and destiny’. Although it was clearly 2021 when the word entered many people’s lexicon with Google Trend’s highlighting that the word was at it’s peak sometime around Christmas 2021.
When asked what is a handy elevator definition of Web3, Gavin Wood said in a November 2021 interview “Less trust, more truth.” Elaborating on that point, Wood went on to explain that “Trust implies that you are you’re placing some sort of authority in somebody else, or in some organization, and they will be able to use this authority in some arbitrary way.” The power that web2 companies such as Google and Facebook have made them enormously rich and centralized points of access for users to communicate through, share their personal data and more is indicative that the current system is broken and core to the issues that Wood hopes to rebel against through Polkadot and the Web3 Foundation
Polkadot wasn’t born in a vacuum — Wood gestated on the idea of a fairer decentralized internet for a few years whilst working as the CTO for Ethereum and thought about a new system. In the “Polkadot Behind the Code, Episode 1” video, Wood recalls that around late 2016 when the team ought to have been implementing Ethereum 2.0, no significant development was happening and Parity Technologies was born. In order to create a chain complimentary to Ethereum, Polkadot was born. Polkadot is a multi chain that hundreds of other blockchains can build upon to solve the ‘blockchain dilemma’ ; the ability to be secure, scalable and decentralized. In regards to blockchains, architects look at achieving all three points of of decentralization, security and scalabilty of variying degrees — but often cannot achiever all three to a sufficient extent.
the birth of Polkadot and her sister — Kusama
Setting out to create a their new take on blockchain, Parity was heavily inspired in ethos, name and aesthetic by the maverick psychedelic artist — Yayoi Kusama. Going against the grain and very active since the late 50s when she left her native Japan for New York City and became a part of the avant-garde art scene. In the late 60s, she embraced the hippie counter-culture when she organised a series of happenings where naked participants were painted with brightly coloured polka dots. Despite having checked herself into a psychiatric institution in 1977 and being 93 years old now, Kusama remains prolific and continues to create art, mostly for various installations and museums around the world.
As noted, Polkadot sets out to solve the blockchain trilemma, focusing on security and and scalability with its unique Relay Chain and Parachain system, which we will explore in a future article. Polkadot’s ultimate goal is to enable interoperability across the entire decentralized web, which necessitates a way for native Polkadot chains to communicate with external networks like Ethereum and Bitcoin. Polkadot achieves this through bridges.
Parity Technologies decided to take a different approach for building their blockchain. Polkadot and Kusama blockchains were built using Substrate, a standardised system for creating a set of building blocks to create blockchains. Subsequently, Polkadot and Kusama ecosystem attracted flocks of developers and became one of the most active blockchain projects. Many analysts and investors alike often look at the Total Value Locked (TVL) in various chains to see how much capital is locked up in a chain to predict it’s success or value itself, but there are flaws in this method as ‘the speed at which projects emerge and collapse in DeFi, TVL becomes an unreliable proxy for the long-term success of a chain.’ — Which Blockchain Has The Highest Developer Count, And Why It Matters
In December 2021, Electric Capital produced a report and analysed up to 500k unique code repositories and 160 million code commits across the crypto space to study which blockchain had the highest number of active developers and drew some interesting conclusions from their studies. Notably, Polkadot is only 2nd to Ethereum in the number of active developers .
This is largely due to its use of Substrate which gives developers the advantage to quickly build a customized blockchain for their own specific use-case without having to set up their validator network. The number of active developers on a chain signify that new projects will emerge and that the blockchain has a positive outlook. In Electric Capital’s report, they also noted that although monthly active developers may increase when the price of the network increases, that figure also stays fairly flat when a drawback occurs. This is definitely a positive indicator of growth and confidence in Polkadot remains strong.
Venture Capitals (or VC) have been understandably analysing the opportunities in the space and crushing numbers and investing in chains where they see greater likelihood of growth and success. Although VCs has been somewhat of a dirty word to many, especially the Web3 space where they see it as a threat to decentralization and visions of a fairer and more trustworthy internet, the fact remains that most of the successful projects are VC backed after being scrutinized by teams of analysts. Therefore they often have a higher likelihood in surviving the cutthroat world of crypto.
According to recent research by Messari, a cryptocurrency data analytics company, Polkadot is the number 1 asset held by crypto funds in Q4 of 2021 as at 3 March 2022.
Having being born out of a vision for a fairer internet, and aspiring to build a more scalable blockchain than Ethereum that connects to other chains seamlessly, Wood and team have developed one of the most exciting ecosystems in the space. Along with its strong developer activity count and history of meeting deadlines such as parachain auction and upgrades, it is likely that Polkadot will continue to succeed. We will delve more into the technology, current projects on-chain and future outlook in future articles.
References
- What do Web 2.0 and Web 3.0 mean? Which one is better?. https://www.preethikasireddy.com/post/what-do-web-2-0-and-web-3-0-mean-which-one-is-better
- Polkadot. https://polkadot.network/
- The Web3 Foundation. https://web3.foundation/about/
- What Is Web 3.0?https://www.forbes.com/sites/forbestechcouncil/2020/01/06/what-is-web-3-0/?sh=16e09c2458df
- Jack Dorsey says VCs really own Web3 (and Web3 boosters are pretty mad about it). https://www.theverge.com/2021/12/21/22848162/jack-dorsey-web3-criticism-a16z-ownership-venture-capital-twitter
- Gavin Wood: The advantages of the Polkadot parachain are abstraction and versatility. https://blockcast.cc/news/gavin-wood-the-advantages-of-the-polkadot-parachain-are-abstraction-and-versatility/https://blockcast.cc/news/gavin-wood-the-advantages-of-the-polkadot-parachain-are-abstraction-and-versatility/
- The Impossible Trinity: Wikipedia. https://en.wikipedia.org/wiki/Impossible_trinity
- Why Yayoi Kusama’s Mental Illness Was Crucial For Her Art Career. https://theartgorgeous.com/why-yayoi-kusamas-mental-illness-was-crucial-for-her-art-career/
- Yayoi Kusama and Her World of Polka Dots. https://www.dailyartmagazine.com/yayoi-kusama-polka-dots-world/
- The Father of Web3 Wants You to Trust Less. https://www.wired.com/story/web3-gavin-wood-interview/
- Electric Capital Developer Reports — GitHub. developer-reports/dev_report_2021.pdf at master · electric-capital/developer-reports · GitHub
- What is Polkadot?
https://limechain.tech/blog/what-is-polkadot/ - Blockchain Dilemma (Part 1 of 3): The Impossible Triangle.
https://blog.btse.com/blockchain-dilemma-part-1-of-3-the-impossible-triangle/ - Google Trends: Web3, global.
https://trends.google.com/trends/explore?date=2021-01-01 2022–03–23&q=web3
Also check out our other blogs about Polkadot
Polkadot — a dive into the architecture of Dot-Sama
Polkadot, Parachains and infrastructure for the ‘new’ internet
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
