3 Facts About Polygon You Should Know
[The Motley Fool]
- Polygon makes Ethereum faster and cheaper to use for everyone.
- New technology will help increase speeds further and promote more development on the blockchain.
- With multiple partnerships with some of the world’s more recognizable brands, 2022 has been a year of building for Polygon.
Polygon’s potential is difficult to ignore, and here’s why it could surge past its all-time high.
Despite what you might have heard, the perfect blockchain doesn’t exist. To achieve that goal, a blockchain should be highly secure, decentralized, and be able to scale effectively, meaning it can quickly and cheaply process lot of transactions.
The failure to offer all three features was dubbed the “blockchain trilemma” by Ethereum (ETH -1.94%) co-founder Vitalik Buterin, who was describing how there are always trade-offs when blockchains prioritize one feature over the others. Decentralization is inherent to blockchain structure, security is an essential property, yet scalability is typically the main challenge.
The trilemma is something Ethereum developers are keenly aware of, and they are doing everything they can to help the world’s most valuable blockchain scale better. But sometimes a little help is welcome.
This is where the Polygon (MATIC 0.03%) blockchain comes into play. Known as a Layer 2 sidechain, Polygon works harmoniously with Ethereum to help make it faster and less costly to use. Polygon has its own blockchain, but the unique part is that those transactions are eventually added to the Ethereum blockchain. Users and application developers of Polygon get the best of both worlds: fast speeds and low fees plus the security and decentralization of Ethereum. This should solve the blockchain trilemma.
A match made in heaven
It might seem that Polygon is trying to outdo Ethereum at its own game, but that’s not the case. Ethereum developers are more than familiar with the benefits that blockchains such as Polygon provide to help Ethereum eventually support the digital age on a global scale. On the Ethereum website itself you can find its goal in bold text: “Grow Ethereum enough until it’s powerful enough to help all of humanity.”
Even though there are a series of planned upgrades in the future to help Ethereum scale more, Ethereum can scale exponentially faster and more efficiently by integrating Layer 2 blockchains like Polygon. Ethereum’s developers know that there is a role for Layer 2 blockchains in the future, and they plan on working “synergistically” with them to “continue to reduce network congestion and increase transactions per second.”
The future of scalability is here
On the technology side, Polygon developers announced that the blockchain will be taking the next step to scale Ethereum soon. Known as zero knowledge Ethereum Virtual Machine, or zkEVM, this technology was thought to be years from readiness. But based on a statement in July, it looks as if zkEVM will go live on Polygon sometime in early 2023.
In addition to making Ethereum scale, the technology will allow smart contracts written on Ethereum to transition to Polygon without the rewriting of any code, a problem that has previously limited development on Polygon’s blockchain.
The usefulness and potential of Polygon is becoming clearer. Over the past year, Polygon has partnered with numerous companies that even the anti-crypto investor might know.
In May, Meta Platforms (META -0.93%) announced that the company will be integrating non-fungible tokens (NFTs) into its social media platforms Facebook and Instagram. One of the four blockchains selected was Polygon.
In early August, Coca-Cola (KO 1.35%) released a limited-edition NFT collection on Polygon in celebration of International Friendship Day. This was just one of three collections released by Coca-Cola this year as the beverage giant starts to dive further into Web3.
Arguably Polygon’s most exciting partnership this year was with one of the best-known entertainment companies in the world, Disney (DIS 1.18%). Every year, through its Accelerator Program, Disney selects a handful of innovative companies to receive time, funding, and resources. Disney selected Polygon as one of six inductees for 2022, which suggests that the entertainment company is looking to get involved in Web3 and blockchain technologies.
A valuable opportunity
Despite being in the midst of a brutal crypto winter, Polygon has had an impressive year of technological breakthroughs, new partnerships, and recognition as a key player in Ethereum’s development. The blockchain is on a trajectory to become a primary player in the digital age.
Although Polygon’s price is down like those of many other cryptos this year, few other cryptocurrencies have been able to achieve as much. Likely due to the widespread sell-off and less-than-ideal economic conditions, Polygon has been unable to climb out of its slump. But should the economic landscape shift, investors can expect Polygon to be a leader among cryptocurrencies. Today’s prices seem almost too good to be true.
By RJ Fulton