Since the value of Bitcoin began to be recognized by the world, there have been continuous series of innovations based on Bitcoin products. Ethereum is the next milestone product after Bitcoin. The reason why Ethereum can be generally welcomed by the market, and so far there are still no products that can compete with it, is because it is the first in a product category. It offers features that the Bitcoin blockchain cannot. Ethereum first provides a complete computing environment and supports the operation of smart contracts. Developers can develop various innovative applications on Ethereum. But at the same time, the emergence of Ethereum has not replaced Bitcoin. This is because Bitcoin is a unique product in its category. Such uniqueness is due to its originality and its unique brand value formed after long-term development in the global market. So far, Bitcoin and Ethereum are still unique products with long-term value in their respective fields.
Compared with these two products, some other innovations have not produced essential differences, so it is difficult to challenge these two products.
Among the various innovations brought about by Bitcoin and blockchain, Diem is the next one with unique value. Diem has no significantly different innovations in technology, but it has established the Diem Association and brought together some leading companies in various segments to join. And Diem's goal is to provide a digital stablecoin that matches the standard currency. Such a positioning of Diem also creates a new product category. It is no longer a pure technical solution, but an innovation in terms of technological innovation, organizational form and product positioning. So I think Diem is clearly moving forward despite the set of issues it's had with its development, and it's likely to launch in 2021. So I think Diem's success is a high probability event.
In terms of pure blockchain technology innovation, Ethereum has shown more and more problems. The various innovative applications generated on top of it have increasingly revealed the shortcomings of Ethereum's product design. This is why there are a lot of innovations in the market that are solving the problems encountered by Ethereum and becoming the next layer of blockchain technology that is generally adopted. In fact, it can be considered that Bitcoin is unique, and the only thing that cannot be replaced. And now the bottom layer of every emerging blockchain technology is striving to become the next Ethereum. Among the various blockchain bottom layers in the current market, I think Polkadot is very promising.
The first reason is the founder of Polkadot. The market now knows that the characteristics of each blockchain founder directly determine the future development of the blockchain. The founder of Polkadot, Gavin Wood, is one of the core developers of Ethereum and the first CTO of Ethereum. So he is very clear about the various functions and shortcomings of Ethereum. His purpose of creating Polkadot is to build a better product than Ethereum. For this reason, he began to focus on the development of Polkadot in 2016. Since then, he has been focusing on the development of Polkadot and the application promotion of Polkadot. After 5 years of continuous development, the Polkadot mainnet will finally go live in 2020.
The second is the superiority of Polkadot's technology. Its double-layer structure of relay chain and parallel chain supports the very strong scalability of the system, so more blockchains can be run on the basis of Polkadot. Polkadot is also very compatible. It can connect to Bitcoin and Ethereum, so it can guide the digital currency and digital assets in Bitcoin and Ethereum to Polkadot's ecology. Polkadot's substrate allows developers to quickly develop a blockchain in a short period of time, which can greatly reduce development costs, and is therefore very conducive to the production of more blockchain products. In terms of performance, Polkadot is also far superior to that of Ethereum. This would solve a very big problem with Ethereum right now.
The third is the support of the Polkadot Foundation to the developer community. The Web3 Foundation provides substantial financial support to the developer community. Therefore, a very rich variety of products have appeared in the Polkadot ecosystem. Compared with Ethereum, developers' support for Polkadot far exceeds that of Ethereum at the same time. For the blockchain public chain, because it does not have any commercial organization behind it, its success can be said to depend entirely on whether it can get the support of developers, especially in the current application of blockchain. A scenario that does not yield very good prospects for profitability.
The fourth is Polkadot's incentive mechanism. Polkadot adopts the form of card slot auction to select the parachain running on it. Such an approach will cause the resources in the market to be greatly tilted towards those parachains that are welcomed by the market. If a parachain is very popular in the market and its token economic model design is also reasonable, then the market will have a strong market motivation to support its operation in the Polkadot ecosystem, so there will be a large number of votes to support it in the Polkadot ecosystem continue to run. Therefore, the Matthew effect in the Polkadot ecology will soon be realized, that is, the strong will become stronger and the weak will become weaker. Such a method is very effective for promoting the ecological development of Polkadot.
The fifth is its approach to software development project management. Polkadot's blockchain development is not like many blockchain development methods in the market, which are quickly introduced to the market and constantly updated and iterated. Due to the characteristics of the blockchain itself, such a development method is not suitable. The Polkadot team chose to concentrate on polishing this product. So after 5 years, the product was really introduced to the market. And in the process of software release. It issued two versions, one is Kusama, which is easier to update, and the other is the final version, Polkadot. A test network Rococo is also provided. Such an arrangement can help each application to be carefully tested before it is actually deployed to Polkadot to avoid problems in the production environment. All developers who have experienced serious enterprise software development know that deploying a test environment close to the production environment, or even deploying a mirror test environment that is the same as the production environment, is a common measure used in enterprise software development and release.
The sixth is support for stablecoins. The blockchain market has developed to this day. If a blockchain only provides the underlying framework of blockchain technology, it will be difficult for it to survive in the market. Attractive applications in the market must require payment, that is, the introduction of stable coins. On the basis of stable currency, various applications that are popular in the market can be developed. This is why I think the Diem ecosystem will develop rapidly. The promoted usage of the Diem stablecoin and its underlying blockchain are actually mutually supportive. It’s like Bitcoin being embraced by the market before the market realizes the value of the underlying blockchain that supports it. In the Polkadot ecosystem, there is now very good support for stablecoins. Users can directly generate digital stable coins based on the digital assets they hold, which is the function of minting coins for everyone. The circulation of stablecoins in the Polkadot ecosystem will definitely lead to the creation of more popular applications in the market. The corresponding Polkadot ecology will therefore develop rapidly.
