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What is a polygon? – Forbes Advisor

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What is a polygon?  – Forbes Advisor

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Polygon (MATIC) presents itself as a solution that improves on some of the clunkiest aspects of Ethereum (ETH). It is even dubbed “the Internet of Ethereum blockchains”.

Founded in 2017, Polygon, formerly known as Matic Network, is a relatively popular crypto that consistently ranks among the top 15 cryptocurrencies by market capitalization.

MATIC supports more than 7,000 decentralized applications (dApps), applications that work without intermediaries.

Polygon vs Ethereum

To understand Polygon, you first need to know a bit about Ethereum and some blockchain developer jargon.

First, blockchain developers face a dilemma – the crypto community calls it the “blockchain trilemma” – when it comes to balancing the trade-offs between decentralization, security, and scalability. .

It’s no secret that Ethereum has its problems. Specifically, crypto #2 has a scaling issue, and it shows when it comes to transaction execution speed.

Ethereum has primarily focused on decentralization and security at the expense of scalability. Therefore, transactions can be expensive and slow. This is where Polygon comes in, with a focus on providing faster transaction speeds and lower costs than Ethereum.

Layer 1 blockchains like Ethereum provide developers with a platform to build and run dApps, smart contracts, non-fungible tokens (NFT), and more. Polygon is a layer 2 blockchain that aims to help Ethereum with its scalability.

By acting as a layer 2 protocol, Polygon does not aim to duplicate the functionality of Ethereum. Instead, it helps improve transaction speeds and reduce costs for developers. Think of it as an express train running parallel to a local train, moving faster with fewer station stops.

Currently, Ethereum can process 14 transactions per second (TPS), while Polygon achieves speeds of up to 7,000 TPS. This makes anything built on the blockchain much cheaper and faster, like a HOV lane on the highway.

In the near future, experts predict that Ethereum will accelerate its TPS after its long-awaited network upgrade in September 2022. But even after fusionPolygon’s lower fees should still attract developers and help the crypto maintain its narrative.

What is MATIC?

MATIC is Polygon’s native cryptocurrency. It is an ERC-20 token, a token created on the Ethereum blockchain.

This token is used to govern and secure the Polygon network and pay network transaction fees.

Unlike some other unlimited supply cryptocurrencies, MATIC has a limited supply, with around $7.4 billion in circulation. There will never be more than 10 billion coins in circulation.

Proof of Stake Template

Polygon proof of stake The consensus mechanism rewards token holders for keeping the network running and verifying transactions.

Proof of stake relies on people staking their tokens, locking them in to be eligible for staking rewards. But there are also risks involved, and you can lose part of your stake or be liquidated entirely, experts say.

You can start staking with just 1 MATIC for earn interest. But most people will delegate their stake to a validator rather than trying to amass enough MATICs and run the validator themselves. Validators can take a small share, usually between 1% and 10% of your staking rewards as commission.

How to buy a polygon (MATIC)

You can buy MATIC on cryptocurrency exchanges, such as Coinbase Where Geminisimilar to how you can buy many other popular cryptocurrencies.

If you don’t already have an account, you’ll need to register and verify your identity to get started.

After creating an account, you may be able to purchase MATIC by wire transfer, wire transfer, debit card, or credit card. You can also buy MATIC with US dollars or other fiat currencies at cryptocurrency exchanges like Coinbase, kraken and Crypto.comto name a few.

Some cryptocurrency exchanges also offer staking services, allowing you to earn interest on your MATIC while keeping your tokens on the exchange.

You can also buy MATIC on decentralized exchanges, such as Uniswap.

Depending on the crypto wallet, you may be able to use a payment processor, called fiat on-ramp, to purchase MATIC directly. Or, you may need to purchase a different token and then pay a fee to exchange it with MATIC.

If you want to get MATIC on the Polygon mainnet, you can use the official website Polygon Bridge to deposit and withdraw MATIC once you have connected an eligible wallet. Some wallets, such as the Crypto.com DeFi Wallet app, also allow you to receive MATIC directly from the Polygon network.

How far will Polygon Crypto go?

Polygon made headlines when it announced it would be part of the Disney Accelerator 2022, which focuses on new types of technology, including augmented reality, non-fungible tokens (NFT) and artificial intelligence as part of its future storytelling efforts.

Disney joins other major crypto platform partner companies, including Meta. Meta plans to test digital collectibles and showcase NFTs on its Instagram platform.

Although there is no exact way to predict the price of the MATIC token, some people are optimistic about the future of the project.

Invest in Polygon

Crypto markets can be volatile and prices can change quickly even if all goes well, which could put short-term investors in a delicate position.

If you think Polygon might be a good long-term holding, you’ll also want to consider competition and risk. For example, there are other Layer 2 scaling solutions, such as Solana (SOL) and Cosmos (ATOM).

Internal risks could also impact the project, such as problems with the management team or the project. In December 2021, Polygon revealed that hackers stole more than 800,000 MATICs and that it paid $3.46 billion in bug bounties to hackers who found and reported security vulnerabilities.

“There was a breach, and they handled it,” says Ron Levy, CEO of The Crypto Company. “If people lose faith in the blockchain itself, in Polygon and what it has built, then things can go to zero very quickly.”

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