What is Polygon Chain & How Does It Work?
Polygon, previously Matic Network, was founded in 2017 and routinely places among the top 15 coins by market value.
Over 7,000 decentralized apps (dApps) are supported by MATIC.
Polygon versus Ethereum
To comprehend Polygon, you must first be familiar with Ethereum and blockchain development jargon.
First, blockchain engineers confront a conundrum, dubbed the “blockchain trilemma” by the crypto world, when it involves balancing decentralization, security, and scalability.
It is hardly a surprise that Ethereum has problems. Particularly, the No. 2 cryptocurrency has a scalability issue, as seen by its slow transaction processing speed.
Ethereum has generally prioritized decentralization and security above scalability. As a consequence, transactions may be costly and time-consuming. This is where Polygon comes in, with its emphasis on quicker transaction speeds and cheaper transaction fees than Ethereum.
Layer 1 blockchains like Ethereum offer a platform for developers to design and execute decentralized applications (dApps), smart contracts, NFTs, and more. Polygon is a Layer 2 chain that tries to improve the scalability of Ethereum.
Polygon’s role as a Layer 2 system is not intended to replicate Ethereum’s features. Instead, it helps developers enhance transaction speeds and reduce costs. Consider it as a fast train that parallels a local train, going quicker and stopping at fewer stations.
Currently, Ethereum is capable of processing 14 transactions each second (TPS), whereas Polygon can accomplish up to 7,000 TPS. This makes anything produced on the blockchain cheaper and faster, similar to a carpool lane.
After its long-awaited network update in September 2022, analysts predict that Ethereum’s TPS will increase in the near future. However, despite the Merge, the reduced costs of Polygon should continue to draw developers and enable the cryptocurrency to keep its story.
What exactly Is MATIC?
MATIC is the cryptocurrency that Polygon uses. It is an ERC-20 token, which was formed on the Ethereum platform.
This coin is used to make decisions about the Polygon network, keep it safe, and pay the fees for transactions on the network.
MATIC, unlike some other cryptocurrencies, has a limited supply. About $7.4 billion worth of MATIC are in circulation. No over 10 billion tokens will ever be in use.
Polygon’s proof-of-stake consensus method pays token holders for network upkeep and transaction verification.
Proof of stake compensates token holders who lock up their tokens. Experts warn that you might lose part of your ownership or be liquidated.
Staking 1 MATIC earns interest. Most users will outsource their staking to a validation rather than attempting to gather enough MATIC to operate one. Validators may take 1%–10% of your staking earnings as a commission.
How to Buy MATIC
Coinbase and Gemini sell MATIC, along with other prominent cryptocurrencies.
Before using the service, you must register and verify your identity.
After enrolling, you may buy MATIC using a money transfer, wire, debit card, or credit card. On Coinbase, Kraken, and Crypto.com, you can purchase MATIC using U.S. dollars or other fiat currencies.
Several cryptocurrency exchanges allow you to stake your MATIC tokens and earn a return.
Uniswap offers MATIC.
A fiat on-ramp payment processor may be used to acquire MATIC, but each cryptocurrency wallet is different. Sometimes you must buy a token and pay to convert it into MATIC. So, remember to choose a Polygon wallet before buying MATIC.
The official Polygon Bridge lets you deposit and withdraw MATIC on the Polygon Mainnet using an authorized wallet. Crypto.com DeFi Wallet program may receive Polygon network MATIC.
How Far Can Polygon’s Cryptocurrency Go?
The news that Polygon will be participating in the 2022 Disney Accelerator, which concentrates on emerging technologies like virtual reality, non-fungible tokens (NFTs), and artificial intelligence to aid in the company’s future narrative endeavors, made headlines.
Disney is joining the ranks of other well-known names, like as Meta, who have worked with the cryptocurrency platform. Meta intends to use Instagram as a testing ground for digital collectibles and a showcase for NFTs.
The future value of a token like MATIC is difficult to gauge, but some supporters of the project remain optimistic.
Short-term crypto investors may face challenges due to the unpredictability of the crypto market and the fact that prices may shift rapidly even when things are going well.
You should weigh the potential rewards of owning Polygon over the long run against the company’s potential downsides. Other Layer 2 scaling options include Solana (SOL) and Cosmos (ATOM).
Problems within the project’s management or scope might potentially pose an internal risk. Polygon disclosed the theft of over 800,000 MATIC and the payment of $3.46 billion to white hat hackers that discovered and reported security flaws in December 2021.
Ron Levy, CEO of The Crypto Company, said, “There was a breach, and they managed it.” To paraphrase, “things may go to zero pretty soon” if “people lose trust in the blockchain core, in Polygon and in what it developed.”
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