The ever-increasing introduction of cryptocurrencies in the digital market is enhancing the value of new projects like Polygon (MATIC). A cryptocurrency launched in the second half of 2019, it is currently generating a lot of hype among users. Below we will try to understand what it is, how it works, the weaknesses and strengths of this cryptocurrency that aims to speed up digital transactions.
Table of Contents
What is Polygon (MATIC)
Technically, Polygon (MATIC) is nothing more than a decentralized P2P cryptocurrency, based on an open source system that puts security, privacy and speed at the forefront.
Thanks to the advanced cryptographic system, it is possible to enable transaction conversions between two parties excluding an additional intermediary. Polygon is proposed as a new and innovative blockchain and cryptocurrency technology capable of improving the flaws present in traditional cryptocurrencies, such as security, speed and privacy of transactions precisely.
History and Origins
The minds that gave birth to this project are Sandeep Nailwal, Jaynti Kanani and Anurag Arjun, Indian computer engineers who initially called their creature Matic Network. Polygon was born with the aim of solving the problem of scalability of Ethereum, through an increase in transaction speed. This process is possible thanks to the use of the SHA-256 algorithm that is implemented in the mining process.
The MATIC project was launched on the market in 2017, while the Polygon one saw its appearance in the second half of 2019.
How It Works
In order for you to understand how Polygon cryptocurrency works, you need to start with Ethereum Plasma. This term identifies that functionality capable of supporting specific off-chain solutions that guarantee to increase the overall performance of the Ethereum network. This condition is due to the creation of a tree structure composed in turn of different smaller chains.
Having taken note of this concept, it is possible to translate the reasoning towards the functioning of Polygon. Through this last tool it is therefore possible to integrate the different blockchains, giving way to the main one to verify the correctness of the transactions in place. Using this system it is possible to manage a very high number of transactions per cryptocurrency block, theoretically more than 65 thousand; at the moment a number that very few blockchains can support.
The path of the transactions takes place thanks to the proof of stake algorithm, which provides users with a section where to share their network and especially the tokens, which are essential to make possible the maintenance of the network and get a reward.
As it is easy to deduce from the technologies used, the main purpose of Polygon is to allow Ethereum to complete transactions quickly, a condition in many cases lacking on decentralized applications. Although at the moment Ethereum is an essential component for Polygon, the project is turning towards an implementation of solutions that can incorporate multiple Bitcoin blockchains. A condition that would make Polygon’s position objectively interesting in the eyes of investors.
MATIC Coins, Polygon’s cryptocurrency, can be generated through mining or by providing its own coins to expand the network, gaining from the consensus proof-of-stake processes.
The Polygon Project
There is no doubt that the link with Ethereum is a condition of great advantage for Polygon. ETH has been a cryptocurrency of global interest for years now and its financial fluctuations always give excellent prospects. Although this condition is there for all to see, the project can take on a whole new form the moment there is additional interaction with Bitcoin or other forms of cryptocurrency.
Until May 2021, Polygon covered a market cap of over $4.3 billion, providing about 10 billion tokens in the form of MATIC coin.
Technically, at the moment, the value of a single token is $0.7, but it is interesting to analyze how in 2020 the value was only $0.003. As can be guessed, the remarkable increase is due to Bitcoin’s interest in early 2021, which put the project on the map leading to a 4200% increase between January and May 2021.
In addition to such marketing dynamics, it is interesting to assess what are the ways in which MATIC coin can be purchased. Excluding the mining system, Polygon cryptocurrency can be easily purchased via exchange platforms and online brokers. Renowned platforms such as eToro allow buying and selling this cryptocurrency quickly and easily.
Certainly, the project seems to be resting on a solid foundation and Bitcoin’s interest could create further momentum.
Polygon, like many other cryptocurrencies, has advantages and risks to take into account, let’s see them in more detail to have a better examination.
The platform is based on an extremely evolved and latest generation algorithm, capable of solving the problems present in past generations, such as speed, security and privacy. In addition to this feature, the team that gave birth to this project is very good and offers continuous updates to their ecosystem.
Benefit of great relevance is also scalability. Thanks to the multi-chain system, Polygon turns out to be extremely scalable. Finally, as mentioned several times, the purpose of Polygon is to speed up the time of transactions, succeeding very well indeed. Low commissions are also added to this.
The only question mark resides in the competing projects. There are in fact many other teams that are carrying out the same idea and system. For the moment it is not yet possible to predict whether Polygon will stand the test of time.
Predictions for the Future
The platform showcases a new project that is, in part, nearing completion. Analyzing the official page it can be seen that many features are still to be implemented, such as: Optimistic Rollups, Stand-Alone Chains, Shared Security Chains and Zk Rollups. However, there is no doubt that the strong point is the excellent exchange system for transactions.
All cryptocurrencies can incur in sudden fluctuations, but Polygon, thanks to a very good team, seems to have what it takes to carve out an important place in this sector.