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The Parachain Advantage

Parachain Advantage

How Parachains Work

The heterogeneous multichain approach developed by Polkadot in 2016 enables numerous, independent blockchains with specialized functionality to cooperate under a single layer of security.

The Polkadot network’s backbone comprises layer-1 next-generation blockchains called parachains, which put the “multi” in multichain and establish a free alliance of independent chains. In this network of layer-1 parachains, Polkadot serves as the foundational and supporting layer-0 protocol. Thanks to Polkadot’s cross-chain interoperability, any kind of data or asset may be transmitted between parachains, ushering in a new paradigm of interchain services, organizations, and economies. Polkadot’s multichain design enables it to be the foundation for a new, decentralized internet that its creator Dr. Gavin Wood has dubbed “Web3.”

As opposed to just depending on layer-2 scaling solutions, the parachain approach scales blockchain technology in a much more decentralized and trustless manner. A single group of decentralized validators secures many blockchains where transactions can occur “in parallel” or concurrently.

In Polkadot’s expanding ecosystem, over competing technologies, more than 130 blockchain development teams worldwide are creating and launching their parachains, mainly due to the clear benefits the parachain architecture offers them. Several parachains are already up and running in Kusama, Polkadot’s “canary network,” and they have handled several thousand transactions since the summer of 2021.

The Principal Advantages Of Parachains:

The parachain architecture developed by Polkadot opens up new vistas of potential for blockchain systems and the future of Web3. Due in part to the fact that the parachain model offers so many advantages, it might be challenging to summarise its genuine worth. 

Only a few examples of them are as follows:

Specialization

The parachain concept was developed with the idea that many different kinds of blockchains will collaborate in the future of Web3. This is because no specific blockchain design is ideal for all use cases. Each chain has trade-offs that make it more suited for some applications than others.

Blockchains must offer a range of services, much as the existing internet adapts to varied needs: one chain may be created for gaming, another for identity and access management, another for financial, etc. Polkadot establishes the framework for a blockchain internet by linking these several chains.

For practically any blockchain use case, parachains may be customized, and they can serve as a tool for testing out novel use cases, particularly on Kusama. Because of their specialization, parachains can accomplish more as a group than any one chain could achieve on its own, fostering the development of a vibrant ecosystem for decentralized enterprises.

Flexibility

When constructing a chain, parachain developers have the most significant amount of flexibility, thanks to Polkadot. The sole technical prerequisite for a parachain is its ability to demonstrate to Polkadot verifiers that each of its blocks complies with the established protocol. Beyond that, the possibilities for creating the ideal chain for a certain use case or collection of uses are endless.

Compared to those that build on top of a smart contract platform, blockchain developers have significantly more flexibility when creating a parachain. Developers that construct at the smart contract layer are constrained by the blockchain’s underlying architectural choices, which might not be ideal for their use case. With Polkadot, developers may go deep into the layer-1 parachain’s internal reasoning, opening them a myriad of additional opportunities for optimization.

The parachain model’s adaptability allows for the broadest range of blockchain technology variations, fostering innovation in Web3 and avoiding the drawbacks and mistakes of earlier blockchain networks.

Interoperability

The ability of blockchains with different designs to communicate with one another is a crucial component of parachain architecture. Blockchains are no longer remote islands that are cut off from one another because of Polkadot’s interoperability, also based on cross composability. By building a decentralized, interconnected internet of blockchains where previously there were just isolated networks to their tribalistic communities, parachains put an end to the age of walled blockchains.

Importantly, Polkadot enables parachains to communicate any kind of data, not only tokens, between one other, creating a range of new blockchain use cases. Instead of being restricted to the functionality of just one blockchain, Polkadot developers may develop services that utilize the advantages of several chains.

When you compare the effects of free trade and isolationism on economies, you can see the actual value of interoperability. Each blockchain is comparable to a separate, sovereign state with its internal society and economy. Accordingly, the parachain model offers a robust framework for international free trade, abolishing the isolationism and balkanization that impede economic growth and restrict the effect of each chain separately.

Scalability

In contrast to just depending on layer 2, the parachain paradigm allows Polkadot to scale at layer 1, which is more decentralized and effective. However, layer-2 solutions can also be included in parachains, significantly enhancing scalability. With Polkadot, transactions may be dispersed throughout a network of specialized layer-1 blockchains and processed concurrently, greatly enhancing throughput and scalability compared to non-sharded networks.

Decentralization, data availability, and security will all still be maintained as Polkadot improves scalability and transaction throughput in the future, thanks to several improvements that have been suggested. The final item is crucial because other networks could favor TPS at the cost of these crucial elements, but giving up decentralization for throughput violates Web3’s fundamental goal.

No Platform Costs

Polkadot-connected Parachains have unlimited access to computational power without paying extra fees or “gas” prices. Due to Polkadot’s versatility, parachain developers and dapp developers can design any price system they see fit for their customers.

The best part is that users of parachains don’t even need to be aware they’re dealing with a blockchain or that they need to own DOT tokens to access applications and services. In this way, a substantial obstacle to usability and acceptance that occurs with traditional networks may be removed by blockchain technology thanks to the parachain paradigm. Imagine if you had to carry a specific token and pay the price each time you wanted to use an app on your phone. Eliminating platform costs for consumers will be a key factor in the widespread adoption of Web3.

Security

New blockchains often need to establish a network of validators to bootstrap their security. Due to the difficulty and length of this procedure, many blockchains have a degree of security that makes them susceptible to assaults.

When linking to Polkadot, parachains instantly receive strong security. Newer blockchain teams may quickly obtain security akin to a bank because of this built-in safety mechanism, also known as shared security. Additionally, it lowers their entrance hurdles and drastically shortens the time needed to create a new network.

Upgradability

Technology is constantly evolving in our environment; one day, it may be cutting edge, and the next, it may be outdated. Like any software, blockchains require regular upgrades to integrate new features as they become available, address issues, and incorporate more sophisticated technology. However, modernizing traditional blockchains is a time-consuming process that sometimes involves “forking” or breaking the chain, which hinders innovation and occasionally splits communities.

Upgrades that are simpler and “forkless” are available for Polkadot and its parachains. As a result, parachains may be quickly updated following the desires of their communities, enabling them to be prepared for what the future may bring. With the parachain concept, blockchains may more easily change and adapt to new situations, ensuring their continued relevance as new technologies are developed.

Independent and Adaptable Governance

On Polkadot, parachains are free to use any governance model they see appropriate and have access to various pre-built modules for setting up different on-chain governance systems. The possibility of hard forks of their chain, which run the danger of dividing their communities in two, may be considerably reduced by teams thanks to the availability of advanced on-chain governance systems.

In addition, on-chain governance offers parachain communities a way to be transparent and responsible, which is necessary for many organizations and fiduciaries who frequently need to witness transparent decision-making procedures before using blockchain technology. A robust system of governance, when combined with Polkadot’s forkless upgrading function, enables parachains to keep their competitive edge while simultaneously fostering community cohesiveness and guaranteeing that all stakeholders have a vote in the network’s destiny.

Financial Services

To obtain financial autonomy and operate independently to support activities in accordance with the wishes of their communities, parachains might make use of on-chain treasuries. Treasury-enabled parachain communities can readily assume the shape of a DAO when combined with on-chain governance (decentralized autonomous organization).

This allows for new decentralized finance models, including cross-chain mergers and acquisitions, decentralized charity, decentralized sovereign wealth funds, and funding for network-beneficial initiatives. Blockchains may now “act in the world” financially thanks to the parachain paradigm, which was previously only available to centralized organizations and businesses.

Effortless Development

In the end, the advantages listed above wouldn’t matter much if creating a parachain was an impossible task. However, various development tools are available to parachain development teams, making it simpler than ever to create a blockchain.

The main Polkadot parachain SDK, Substrate, is a blockchain development platform created by Parity Technologies that helps teams greatly minimize the effort and complexity of creating a parachain. With Substrate, developers may utilize pre-built modules for typical blockchain characteristics that can be combined and reconfigured, like blockchain building bricks, to construct the unique parachain most appropriate for their use case.

With parachains, what once required years of laborious effort with sizable teams of experienced engineers may now be completed in a few weeks with the resources of a young company.

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What Is Blockchain Security?

Blockchain Security

The data format created by blockchain technology has built-in security features. It is based on consensus, decentralization, and cryptographic principles to guarantee transaction trust. Most distributed ledger technologies (DLT) and blockchain systems group data into blocks, each containing a transaction or sequence of transactions. A cryptographic chain is almost impossible to alter since every new block connects to every block that came before it. Each transaction within a block is verified and approved by a consensus mechanism, ensuring its veracity and accuracy.

Blockchain technology offers decentralization by enabling participation from members of a distributed network. The transaction record cannot be changed by a single user, and there is no single point of failure. However, blockchain technology differs significantly in terms of security.

What Are The Security Differences Between Blockchain Types?

Blockchain networks might differ regarding who can participate and who controls the data. Networks are often classified as public or private based on who is permitted to join and permissionless or permissioned based on how members access the network.

Public Blockchain

Public blockchain networks often enable anybody to join and members to remain anonymous. A public blockchain validates transactions and achieves consensus using internet-connected machines. Bitcoin is the most well-known public blockchain example, and it obtains consensus through “bitcoin mining.” The bitcoin network’s computers, or “miners,” attempt to solve a complicated cryptographic challenge to generate proof of work and confirm the transaction. This network has few identification and access constraints other than public keys.

Private Blockchain

Private blockchains usually allow only known organizations to join and utilize identities to validate membership and access credentials. The groups join together to build a secret, members-only “business network.” In a permissioned network, a private blockchain obtains consensus using a process known as “selective endorsement,” in which recognized users validate the transactions. Members can only maintain the transaction ledger with particular access and permissions. More identification and access constraints are required for this network type.

When developing a blockchain application, it is crucial to determine which form of the network would best meet your business objectives. For laws and regulatory reasons, private and permissioned networks are ideal. On the other hand, public and permissionless networks can achieve more decentralization and diffusion.

Public blockchains are open to the public, and anybody may join and validate transactions.

Private blockchains are mainly restricted to commercial networks. A single organization or consortium controls membership.

The number of processors participating in a permissionless blockchain is not limited.

Permissioned blockchains are only accessible to a specific group of users who have been issued identities via certificates.

Cyberattacks

While blockchain technology generates a tamper-proof database of transactions, blockchains are not susceptible to cyberattacks and fraud. Those with malicious intent can exploit known blockchain technology flaws and have succeeded in various hacks and scams. 

How Do Scammers Exploit Blockchain Technology?

Hackers and fraudsters threaten blockchains in four ways: phishing, routing, Sybil, and 51 percent assaults.

Phishing Attempts

Phishing is a fraud designed to get a user’s credentials. Fraudsters send emails to wallet key owners that appear to be from a reputable source. The emails employ bogus URLs to request users’ credentials. Knowing a user’s credentials and other confidential material may lead to losses for the individual and the blockchain network.

Attacks on Routing

Blockchains rely on huge data transfers in real-time. Hackers can steal data as it is being sent to internet service providers. Because blockchain participants cannot perceive the threat in a routing attack, everything appears normal. However, criminals have grabbed private data or currency behind the scenes.

Sybil Attacks

In a Sybil assault, hackers establish and utilize many phony network identities to overwhelm the network and bring it down. Sybil is a well-known novel character who suffers from multiple identity disorder.

51% of the Attacks

Mining necessitates a significant amount of computational power, especially for large public blockchains. However, if a group of miners could pool enough resources, they might control over half of the mining power on a blockchain network. Having more than half of the power implies you have control over the ledger and can alter it.

It should be noted that private blockchains are still not subject to 51 percent attacks.

Enterprise Blockchain Security: 

When developing an enterprise blockchain application, it is critical to address security at all tiers of the technological stack, as well as how to handle network governance and permissions. A complete security plan for an enterprise blockchain system comprises both standard security controls and controls that are unique to the technology. Some of the security controls unique to business blockchain platforms are as follows:

  • Management of identity and access
  • Management of key personnel
  • Data security
  • Secure communication
  • Smart contract safety
  • Transaction approval

Employ specialists to assist you in designing a compliant and secure system to help you reach your company objectives. Look for a production-grade platform for creating blockchain applications that can be deployed in your preferred technological environment, whether on-premises or through your preferred cloud vendor.

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What Is NFT Metadata

NFT metadata is a crucial element of NFT projects and blockchain technology. Digital assets are tracked, and their owners are identified using them. This blog article will examine NFT Metadata and its application to blockchain technology. 

NFT Metadata

The metadata of an NFT describes the digital asset’s extra attributes and characteristics. This can contain the item’s creation date and time, the name and contact details of the creator, an explanation of the asset, and searchable keywords. Blockchain ledgers that hold metadata enable NFT owners to keep track of and maintain their assets.

An NFT maker can create something that is one-of-a-kind and hard to replicate because of the metadata. As a result, investors and collectors are very interested in NFTs with comprehensive metadata.

Where is the NFT Metadata Kept?

NFTs are kept in the decentralized IPFS (interplanetary file system), a group of machines that interact using the same protocol. To support a large number of users and NFTs, the system is distributed and scalable. The interplanetary file system’s resistance to censorship and data loss is its key benefit. This is so that if one node in the network goes offline, it won’t impact the other nodes since the data is dispersed among several distinct nodes.

The interplanetary file system has the drawback of being slower and less effective than other storage systems. However, this compromise is worthwhile for many users who prioritize censorship resistance and data confidentiality.

This distinguishes and adds value to NFTs: since their data is kept on the blockchain, they cannot be duplicated or altered. A token that reflects the underlying data is what you purchase when buying an NFT. The data is unchangeable and stored safely on the Ethereum blockchain. As a result, using NFTs to acquire and sell digital assets is safe.

Off-Chain NFT Storage

Your NFTs are entrusted to a third-party service when you store them off-chain, such as with a cloud storage provider like Google Drive or AWS. Your NFTs are tracked by this service, which also makes sure they’re always available to you. One should be aware that off-chain storage of NFTs has several dangers. First, your NFTs can be permanently lost if the provider goes out of business. Second, your NFTs could’ve been taken if the service had been hacked.

Your NFTs can become unreachable due to the service, which would prohibit you from trading or transferring them. Therefore, before choosing, it is crucial to consider the advantages and disadvantages of holding your NFTs off-chain.

NFT Metadata With JSON Data

To mint an NFT, you must first produce a JSON file with the necessary NFT information that describes what the token represents.

A JSON file format for encoding metadata will soon be implemented on the Ethereum network, making it simpler for NFTs to communicate with smart contracts. Developers may store JSON information on the Ethereum blockchain thanks to the ERC 721 Ethereum NFT standard.

This is especially helpful for NFTs, which frequently require to contain extra information like the name of the artist, a description of the NFT, or license details. The web3 API and other JSON-based systems, such as them, are more easily interoperable with NFTs thanks to the JSON standard. Additionally, it enables metadata-based querying and filtering of NFTs.

A few crucial data bits must be present in the JSON file for constructing NFT metadata. You must first give the NFT a unique identification. It may be a URL or another distinctive string. The NFT’s description, title, and keywords must be added, along with some other foundational metadata.

The file type for the NFT itself should also be specified. Doing this will make it possible for people to interact with it and show it properly. You may generate a whole and valuable JSON file for your NFTs by including these necessary data bits.

NFT Metadata Technicalities:

The following NFT discussion will employ the traditional Ethereum ERC-721 token standard.

The description of each ERC-721 includes a “metadata” string that describes the non-fungible token in detail. For instance, this information may identify a certain. JPEG, yet a CryptoPunk.JPEG and a DeadFellaz.JPEG differ significantly. Although JPEG files are similar in size, their values are very different.

The main issue that confuses people regarding NFT metadata is where files are stored off-chain—is it anything like Google Drive? Is it a storage area for files on Amazon Web Services? Who oversees the online storage of NFT metadata?

Each NFT refers to online-based audio or visual (image, audio, etc.) asset. It sends a request to a particular place for the material, returning the requested content for you to view or hear. NFTs often point to an HTTP URL or an IPFS  hash that is located online.

ERC-721s specify metadata in a standardized JSON format, which resembles this: ERC-721s specify metadata in a standardized JSON (JavaScript Object Notation) format, which often is maintained by the website that hosts the NFT.

{
    "title": "Asset Metadata",
    "type": "object",
    "properties": {
        "name": {
            "type": "string",
            "description": "Identifies the asset to which this NFT represents",
        },
        "description": {
            "type": "string",
            "description": "Describes the asset to which this NFT represents",
        },
        "image": {
            "type": "string",
            "description": "A URI pointing to a resource with mime type image/* representing the asset to which this NFT represents. Consider making any images at a width between 320 and 1080 pixels and aspect ratio between 1.91:1 and 4:5 inclusive.",
        }
    }
}

Since storing a JSON would be excessively costly and resource-demanding, the data is kept as a URI  inside the Ethereum contract. However, the URI string directs the visitor to a page where they may get the JSON description of the token.

On the blockchain, the token’s metadata is a permanent, irrevocable record containing information about its ownership, what it stands for, and its transaction history. The image’s name, description, URL for hosting, and occasionally other specific information like the project’s total supply, the type of encryption used, and a unique signature are all contained in the JSON file.

NFTs’ Limitations

Typically, this JSON metadata just serves to identify the object and doesn’t offer any further information beyond the absolute minimum.

Multiple initiatives are aiming to fix the Ethereum network’s flaw and restriction that the data isn’t particularly searchable or accessible by other smart contracts.

The token issuers, the legal owners of the NFT contract, provide the data. For better or worse, users cannot update the data, which can be difficult for several reasons.

Links can break, as we have observed in the changing Internet ecology. Since the NFT metadata contains a link that directs you to another location where you may view the art, if that link is broken, you will be required to a highly costly 404 error page. Users are unable to change either the JSON data or the links.

The main problem is that the NFT’s inherent worth may be in jeopardy if the data could be updated. The market would react, most certainly severely, if, for instance, a hostile third party discovered an exploit to replace all of the Bored Ape Yacht Club image information with images of real apes found on Google.

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