When evaluating the technology of a Blockchain it is always important to look at the Consensus Mechanism that this Blockchain uses. When it comes to newer chains, like Polkadot, it is also a good idea to compare them to their more established competitors like Ethereum.
Ethereum 1.0 uses a single blockchain to process all transactions, run all apps, and validate the network with mining. It does all this while using a slow PoW consensus algorithm that seriously restricts throughput. That’s why network congestion is so frequent during high-traffic days.
Polkadot eschews the single-chain design for a fully interoperable multichain ecosystem. Instead of using one chain to do everything, the Polkadot philosophy lets different chains specialize and share resources
Both Ethereum 2.0 and Polkadot use hybrid consensus models where block production and finality each have their own protocol. The finality protocols of Ethereum 2.0 and Polkadot both finalize batches of blocks in one round.
For block production, both protocols use slot-based protocols that randomly assign validators to a slot and provide a fork choice rule for unfinalized blocks. There are two main differences between Ethereum 2.0 and Polkadot consensus algorithms:
- Ethereum 2.0 finalizes batches of blocks according to periods of time called “epochs.” The current plan is to have 32 blocks per epoch and finalize them all in one round. With a predicted block time of 12 seconds, this means the expected time to finality is six minutes (12 minutes maximum). Polkadot’s finality protocol finalizes batches of blocks based on availability and validity checks that happen as the proposed chain grows. The time to finality varies with the number of checks that need to be performed (and invalidity reports cause the protocol to require extra checks). The expected time to finality is 12–60 seconds.
- Ethereum 2.0 requires a large number of validators per shard to provide strong validity guarantees. Polkadot can provide stronger guarantees with fewer validators per shard. Polkadot achieves this by making validators distribute an erasure coding to all validators in the system so that anyone — not only the shard’s validators — can reconstruct a parachain’s block and test its validity. The random parachain–validator assignments and secondary checks performed by randomly selected validators make it impossible for the small set of validators on each parachain to collude.
Another important factor of the Polkadot ecosystem is the DOT Token. What role does it play for the functioning of the Polkadot Blockchain as a whole?
This article is an extract from the 80+ page Scaling Report: Does the Future of Decentralized Finance Still Belong to Ethereum? co-published by the Crypto Research Report and Cointelegraph Consulting, written by ten authors and supported by Arcana, Brave, ANote Music, Radix, Fuse, Cryptix, Casper Labs, Coinfinity, Ambire, BitPanda and CakeDEFI.