What is Polygon crypto?
If you don’t know much about Ethereum I would suggest you read this article explaining Ethereum first before trying to understand what polygon crypto is
Polygon is a blockchain that offers fast transactions that are secured by the Ethereum Network.
As such it offers the best of both worlds: high throughput and robust security.
Solutions such as Polygon are known as side chains or layer 2s.
These types of blockchains have their own validators and smart contract logic and are written in Solidity, the coding language used on Ethereum.
They are “EVM compatible” where EVM stands for Ethereum Virtual Machine which is a fancy word for “computer that understands the solidity coding language”.
Since many of the decentralized products use Solidity, they are locked into the Ethereum ecosystem.
Many dapps have already invested too many working hours and effort in writing code for Ethereum that it would be very costly for them to shift to an Ethereum competitor.
Solutions such as Polygon are attractive to these developers because they can benefit from faster transactions without having to re-write their code from scratch.
How does it all work?
The key challenge with Ethereum is that it is slow and expensive.
Many Dapps using Ethereum network continue to pay high transaction fees and put up with the slow transactions because shifting their code and product to another platform is way too costly.
This issue of slow and expensive transactions prevent Ethereum from scaling. Ethereum cannot scale further until it addresses these challenges.
While working to address scalability, Ethereum’s developers have proposed various solutions. One of the solutions that Vitalik Buterin (Ethereum founder) has proposed is the Plasma scaling solution.
When the Plasma proposal was first formed, a team of developers out of India adapted it to create, what they called, More Viable Plasma (MVP).
They then deployed this code to address the scaling issue that ETH has.
The solution deployed by Polygon is a blockchain that has its own validators and tokens just like any other blockchain.
Transactions are made and validated on that blockchain.
Every so often Polygon connects to Ethereum where it settles all the transactions. You can imagine this as being equivalent to a credit card where you make multiple payments during the month and then you get a final bill at the end of the month.
This means that Polygon can process small transactions off-chain, say up to $10K (could even be $100K) , much faster.
It then finalizes them with the security that the slower but more fleshed out Ethereum network offers.
Polygon is more than a blockchain
In truth, Polygon is way more than that. Like Polkadot and Cosmos, Polygon aims to be the internet of blockchains.
This means that anyone can build a blockchain and connect it to the Polygon platform to benefit from a bunch of pre-packaged code that you just plug in to thus leveraging the security that Ethereum offers.
Also Polygon is not bound to Ethereum. In theory it can connect to any other blockchain and replicate the solution that it offers with Ethereum.
If you want to get technical on Polygon
There are four components that Polygon uses.
- The first is a smart contract platform that interacts with Ethereum. This acts as a bridge between Polygon and Ethereum. Essentially it means the Polygon and Ethereum can talk and transact with each other.
- The second is an additional security layer that runs alongside Ethereum where transactions are validated
- The third part is the Polygon networks which is the ecosystem of blockchains. Each of these blockchains has its own community and consensus mechanism (miners, validators etc)
- The fourth component is the Polygon EVM (Ethereum Virtual Machine) where smart contracts run.
You should also know that the Plasma isn’t the only solution that Polygon is aiming to use to address scalability.
In the near term they aim to use alternative solutions such as optimistic rollups and zero knowledge proofs.
- Optimistic rollups leverage a technology that is already available on the Ethereum network that makes transactions faster while maintaining security.
- Zero knowledge rollups is another method to securely group off chain transactions and pass them on to the main mother blockchain, in this case Ethereum.
The Polygon ecosystem
This is massive!
If you follow Polygon on any of its social media you will see them announcing a new partnership or acquisition almost every week.
The most recent of these was Uniswap. Uniswap is the largest decentralized exchange. Its version 3 is moving over to Polygon.
The Matic Token
The original name of Polygon was Matic.
After a while the team decided to change their name to Polygon. Since you can’t change the name of a Token they kept the Matic name.
Matic is the native token of the Polygon network that you use to validate transactions.
You can stake it to earn a return just like with any other proof of stake blockchain.
Founded in October 2017 by Jaynti Kanani, Sandeep Nailwal and Anurag Arjun Polygon is the first successful blockchain to emerge out of India.
Later on Mihailo Bjelic also joined the team. The team got funding and fame early on when Mark Cuban invested in them.
Wrapping up Polygon
Polygon Matic has very large traction.
It is has built a whole ecosystem that directly addresses the scaling problems that ETH has.
As such it is an enabler of the Ethereum Network and helps it to grow.
I expect that Polygon Matic will continue to play a big role in the multi chain future of the blockchain revolution.
If you enjoyed this article you might also want to read about an Ethereum competitor called Solana and how that works next.