What is a polygon? • Ethereum layer 2 scaling • Benzinga

What is a polygon?  • Ethereum layer 2 scaling • Benzinga

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The Ethereum ecosystem is the largest and fastest growing layer 1 blockchain that supports smart contracts. However, high transaction fees on the Ethereum network have alienated users. High gas fees on the Ethereum network have led to the development of rival blockchains – such as Cardano, Solana, Avalanche – sometimes referred to as ETH killers. Although these blockchains are often faster and cheaper than Ethereum, they lack the security and network effect of Ethereum’s massive user base.

Layer 2 solutions are applications created to help scale a blockchain. Examples of Layer 2 solutions are the Bitcoin Lightning Network, Arbitrum, and Polygon. These Layer 2 solutions take transactions off the mainnet, or Layer 1, and republish them into groups using rollups. Layer 2 solutions help increase transaction speeds and reduce gas charges while providing security and decentralization to the mainnet. Layer 2 solutions are also often referred to as sidechains.

Polygon Overview

Polygon is a layer 2 scaling solution for the Ethereum blockchain. Polygon acts as a faster blockchain running concurrently with the Ethereum blockchain which uses multiple sidechains. These side chains work using the following methods to help improve scalability methods.

  • ZK totals: ZK rollups process multiple transfers from the Ethereum mainnet. These transfers are then bundled into a single transaction and published on the mainnet. This process reduces the volume of transactions and the amount of data processed on the Ethereum mainnet, allowing for cheaper and faster transactions.
  • Plasma chains: Plasma Chains are blockchains that run alongside the Ethereum mainnet. The two blockchains can communicate with each other and allow assets to travel between them. Plasma Chains have a consensus mechanism that creates blocks, and the root of each Plasma Chain block is posted to the Ethereum mainnet. These roots are small pieces of information that can be used to prove the content of these blocks.
  • Optimistic rollups: Optimistic rollups are similar to ZK rollups, except that they assume valid transactions by default. They only perform calculations in the event that the integrity of a transaction is challenged.

The MATIC token is Polygon’s native cryptocurrency. MATIC, an ERC-20 token, is used for staking, fees, and governance.

Why do people use Polygon?

People use Polygon because of its fast transaction speeds and low gas fees. Gas charges on Polygon are often only pennies, much lower than those charged on Ethereum. People also use Polygon because the network benefits from the strong security of the Ethereum blockchain.

Polygon history

Polygon was launched in October 2017 as Matic Network. Polygon was co-founded in Mumbai, India by Anurag Arjun, Jaynti Kanani and Sandeep Nailwal. Kanani was a former data scientist at before helping found Polygon and serving as the company’s CEO. Nailwal was the former Chief Technology Officer (CTO) of Welspun Group. He also worked as a consultant at Deloitte and started another company known as ScopeWeaver. Arjun has worked as a project manager at IRIS Business, SNL Financial and Dexter Consultancy. Matic rebranded to Polygon in February 2021 to reflect its wide range of scaling solutions.

Where to buy MATIC

MATIC can be purchased from most centralized exchanges such as Coinbase Global Inc. (NASDAQ: COIN), Gemini and Binance. MATIC can also be purchased from decentralized exchanges such as Uniswap and MetaMask Swap. Polygon uses a proof-of-stake consensus mechanism. If you already own MATIC, you can earn more by staking.

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Polygon vs other blockchains

The Polygon blockchain fundamentally differs from other blockchains such as Bitcoin and Solana because it relies heavily on another blockchain for its security. Polygon is indeed part of the larger Ethereum ecosystem.

Arbitrum is another Ethereum Layer 2 scaling solution. Arbitrum is slightly more decentralized as it is secured by Ethereum’s large network of miners. Polygon, on the other hand, is secured by MATIC staking, which is a smaller pool of capital compared to the miners that secure the Ethereum network. Polygon is slightly cheaper to use and has faster withdrawal times when transitioning your assets to the Ethereum network.

How to Store MATIC Safely

If you want to buy a large sum of MATIC tokens, it is crucial to take the necessary precautions to store your cryptocurrencies safely. The best place to store your MATIC is on the Ledger hardware wallet.

Ledger is a cryptocurrency hardware wallet that stores access to your cryptocurrencies on an external device. Ledger wallets are not connected to the internet. This feature is beneficial because internet-connected hot wallets are much more susceptible to scams, hacks, and private key leaks. Ledger wallets currently cost between $60 and $250 depending on the model you choose.

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Should you use Polygon?

Polygon is a scaling solution that aims to improve the speed and reduce the cost of using the Ethereum blockchain. The company not only helps attract new cost-conscious users to the Ethereum ecosystem, but it also retains existing users. Many Ethereum projects are being rolled out on Polygon, and the Polygon ecosystem is only set to grow. However, the Ethereum 2.0 upgrade risks making Ethereum layer 2 solutions less valuable as mainnet scalability improves.