By Larry Wright
The crypto market is a strange space to be in, especially if you are a beginner and don’t have much knowledge articulating between things or elements of different types. It is going to chew you up like you were a little tofu ball but with time comes the knowledge, and the knowledge is what is going to make you better within the crypto market or withstand the tests of time that this particular market presents with.
With the number of opportunities doubling down within the crypto market, there are actually more cryptocurrencies to choose from, each and every cryptocurrency runs on a perforated decentralized medium that is known as a blockchain, and every cryptocurrency has its own blockchain along with the consensus algorithm that is used by that specific cryptocurrency for the sake of validating transactions and storing data.
Blockchain technology works as the very ground infrastructure for running various aspects of any and all cryptocurrencies out there; without blockchain technology and the idea of decentralization whole market in itself is lost.
Bitcoin remains the flagship cryptocurrency of the crypto world, having the most incredible fan base along with the highest price tier, and is followed by Ether which is the second-largest cryptocurrency in the crypto world.
Bitcoin as a blockchain or cryptocurrency has not truly diversified itself; it remains stuck to the base elements such as you can buy Bitcoin for the sake of storing them and selling these tokens way down the line when you see them turning a profit.
There is one way to deal with Bitcoin, or you can engage with active trading, which means that you buy Bitcoin and you sell it in a short time period. And once again, it is done for the sake of engulfing as much profit as you can. This is basically how the full price and profit model of crypto works.
Ether, on the other hand, has truly diversified its use cases; you can use the native cryptocurrency that is Ether, for a variety of tasks that include staking the token within the same blockchain or another mining pool and earning handsome rewards for it.
You can also become a validator on the Ether blockchain, which loosely translates into renting out your computational power to the Ether blockchain for the sake of validating transactions and, in turn, earning a handsome reward by the blockchain in the form of its native cryptocurrency Ether.
Non-fungible tokens, which are a hybrid version of digital art that resides on blockchain technology, are also pretty intensive on Ether blockchain and, other than the smart contracts, are also a diversified portfolio of Ether to kind of broaden itself and the services that it is providing to the end-user.
These are some of the elements that truly speak for Ether as blockchain technology and how it is evolving with the passage of time. But that too puts a strain on the overall available processing power on Ether blockchain and how it is being undermined and being throttled by too many transactions queuing up and having no processing power to facilitate all of these.
This is the reason why the transactional prices on Ether blockchain are increasing day by day; you will not be able to facilitate yourself into a tiny transaction that is not of a significant nature and, at the same time, not pay a significant transaction fee that might at times exceed your transactional volume. That is why people are only limiting their transactional interaction with Ether blockchain for significant transactions.
That is the downside of working with Ether blockchain because the gas prices are moving up, and you really have to be thoughtful about the transaction you are going to make on the blockchain because, at the end of the day, you might not end up with a handsome deal on your plate.
This is a true error on Ether’s part for not having enough processing power to accommodate all of the pending transactions but this is something that is being taken care of or addressed with the help of the Polygon blockchain system. We will be talking about Polygon in great depth below.
What is Polygon?
Polygon can be defined as a second layer or a sidechain to the primary Ether blockchain; this is a totally different environment that runs alongside the primary Ether blockchain while helping the primary chain to redirect some of the pending transactions towards the sidechain for their optimal and consistent processing.
Polygon has its own processing power that comes from various nodes who have signed up to make their computational throughput available for the side chain of Ether which is Polygon.
MATIC is the native cryptocurrency of Polygon, and it can be used for a variety of purposes, including as a payment method for the transaction fees a user has to clear on the Polygon blockchain for the sake of staking the native crypto in multiple mining pools for earning rewards and also for governance oriented purposes. MATIC can be bought from any other crypto exchange out there, and you can also use it for active trading if need be.
Polygon: Sidechain Solution
Many people wonder that as efficient as Ether blockchain is, why there was a need to induce a second chain or a sidechain, if you will, in the form of a Polygon network? The answer lies in the fact that Ether is home to a potential number of activities taking place on the chain simultaneously.
As explained earlier, it is not only used for the purposes of making a simple transaction as other affairs such as exchange-traded funds, non-fungible tokens, smart contracts, and various other attributes are also taking place right there on Ether blockchain.
Most of the developers are also using this blockchain for the sake of developing their own decentralized games and apps, while a variety of decentralized finance elements are also being developed right there.
Because of its compatibility with smart contracts, Ether as a blockchain has been readily available for all these years, and therefore the present computational throughput that Ether enjoys is not even near to contemplating each and every transaction or request that the blockchain receives.
This is one of the major reasons why there was a need for polygon blockchain to be implemented as a sidechain to Ether in the first place.
Another reason that comes to mind is the skyrocketing of transaction fees on the Ether blockchain and in the form of gas prices; whenever there is an extensive load on the blockchain environment, and the computational power is less than the load, the gas prices or transaction prices are going to increase to compensate for the available computational power and as a way to prioritize the transactions that the network should facilitate.
Polygon has been introduced as a solution to this pertaining problem because it is a layer two scaling solution which works as a sidechain parallel to Ether’s primary chain.
What happens is that the primary chain of Ether senses the overall load that it is experiencing in the form of pending transactions; if these cross a certain threshold limit which the chain is able to facilitate at a given time period, then by default, the primary chain is going to diffuse some of these transactions that are pending to the polygon’s side chain.
A beforehand communication for these dedicated transactions is already done so that the Polygon blockchain is expecting these transactions that are still pending so that these can be facilitated in a much more efficient and scalable fashion with lower transaction fees.
By default, a user has the privilege to select Polygon as the very chain on which their transactions should be facilitated while using the Ether mainnet.
But for this to happen, they must qualify the baseline requirements for a transaction to be diverted towards Polygon.
First of all, it must have a significant transactional volume which means that any and all requests that are subpar or of a very minute quantity of Ether being redirected from the Ethereum blockchain are not going to be facilitated by Polygon at all.
Other than that, there are some other requirements, such as the user must be an old partner of Ether blockchain and must have conducted transactions earlier to be qualified for getting access to the Polygon side chain.
When you are on the Polygon side chain, as a matter of fact, you will be able to interact with a variety of apps that exist on the Polygon network, which were the first part of the Ether blockchain; in a way, it is a plus point for you to be able to engage with Polygon chain while availing the services of Ether mainnet.
What is MATIC?
As discussed earlier, Polygon comes with its own very cryptocurrency by the name of MATIC. It has multiple use cases, as illustrated earlier, including but not limited to the user paying their outstanding transaction fees on the mainnet of Polygon for the transaction that they have made earlier.
Other than that, it could also be used for the sake of staking crypto in a definitive mining pool which will produce you a handsome reward in terms of adding a few tokens from their end, but one thing should be made clear here, and that is the fact that once you have submitted or staked your tokens into a particular mining pool, you are not at liberty to withdraw your funds or break the terms of the agreement at all.
Other than that, it could also be used as a governance token which means that if you hold enough quantity of these tokens in a certain manner, then you would be able to cast your vote around multiple governance-related decisions that are done on the Polygon blockchain.
There are some preliminary requirements, however that need to be filled before you can work as a governance body on this very blockchain network, but it shouldn’t be a big problem, especially if you have a large quantity of MATIC tokens at hand.
Other than that, if you’re interested in hands-on trading experience with this particular cryptocurrency, then yes, that too is available, and you can interact with it by going to any online crypto exchange or entity and purchasing as many MATIC tokens as you require.
You might be wondering, what is all this hype around the name MATIC? Where does it come from? The answer to this question lies in the fact that during the earlier development stages of Polygon, it was named MATIC, and later on, the whole thing got rebranded as Polygon. That is why still, to this date, the token for Polygon is termed as MATIC.
How Does Polygon Network Work?
Think of Polygon as a duplicated Ether blockchain with a re-branding tactic up its sleeve, having a different name and a different approach as the standard Ether blockchain but in reality, it is the same thing as the primary Ether blockchain. It is much more efficient and can be scaled to an absolute limit where transactions are processed faster and in a much more reliable fashion.
It enjoys a lesser crowd as compared to the main Ether blockchain, and therefore transactional throughput is extremely high over there, which loosely translates into faster processing and taking up less time for validation of transactions along with the subjection of transaction data into definitive blocks over the Polygon blockchain.
There are multiple technologies that are embedded into the Polygon blockchain for the sake of making it a speedier alternative to the primary Ether blockchain.
It uses a proof of stake consensus algorithm just as Ether blockchain, which includes validation of transactional data along with the users that are involved in it to make sure that nothing illegal or out of context is taking place on the blockchain itself.
Some of the broad and lesser discussed aspects of Polygon include various elements which make up the network and provide the main infrastructure that is required to continue developing on the same blockchain where transactions are being facilitated along with the development of new technologies as well.
The first element is the validators; these do the heavy lifting here; these are independent node operators who have staked enough amount of their MATIC tokens on the Polygon blockchain, and for that particular activity, they have been given a stake in the network and with the task of validating the transactions in real-time.
They not only validate the transaction but each and every ounce of data that the transaction has, and once cross-referencing and cross-checking have been done, and everything falls into order, the transaction would ultimately be added to the blockchain. What they receive in return is plenty and, honestly speaking, a profound reward by the network in terms of the MATIC token for the services that they are providing.
You would be required to run a full-time node should you wish to become a validator on the Polygon network, but it requires the subjection of your own crypto tokens on the blockchain network because if you don’t, then you can’t become a validator.
If you are not working for the greater good of the network and are making consistent errors, then these would come as punishments or penalties and would be reflected in your overall staked tokens because some deductions and cuts would be made from the original MATIC that you have staked earlier.
On the other hand, if you wish to minimize the heavy lifting but still want to have a piece of cake that is distributed among the validators for their hard work, then there is a work-around for it. All you have to do is to become a delegator which kind of employees the fact that you would be staking your MATIC crypto indirectly with the blockchain and giving it away to a dedicated validator.
That validator person would be running the node around the clock, and the network would presume them to be the original owner of these tokens; this is an alternative to becoming a validator because it is less maintenance, and there are fewer commitments here as well.
You really have to be careful when picking out the validator on whom you are pinning away all your hard-earned crypto tokens because if they continue to act with malicious intent, then most likely than not, there will be reductions made from the original crypto tokens that you have staked.
There is also an off chance of them betraying you and running away with your crypto, but that is highly improbable, and you won’t have to worry about this or any other discrepancies if you have done your research thoroughly and you trust whomever you have chosen to become your validator.
Polygon network is an incredible alternative to Ether blockchain, and if you don’t want to get stuck in an endless loop trying to get your transactions validated in real-time, then you have to take action, and you have to take it right now by subjecting and redirecting all of your business towards the polygon blockchain network.