Wednesday, October 5, 2022

What is NEAR Protocol?

The goal of Near Protocol has always been an innovative approach to data ownership. This is a model in which people will have control over their money, data, and also tools they need to come up with new ideas.

Unlike Ethereum, the Near Protocol decentralized application platform places a higher priority on user and developer ease alongside data security and privacy.

Among the major limitations of blockchain technology at the moment are its inability to scale up and the rate at which it can handle data. However, unlike other platforms, the Near protocol is built from the ground up rather than being an adaption of an existing system. This however contributes to its goal of increasing both scalability and processing speed, as it adopts a unique technique known as “sharding.”

A brief history of NEAR Protocol

Alexander Skidanov and Illia Polosukhin are credited with the development of the NEAR Protocol. Before opting to focus on the development of blockchain technology, Polosukhin and Skidanov began working on the NEAR project as a machine learning project.

Because their machine learning project was unable to scale, they came up with a new project from the ground up using blockchain technology.

In 2013, they started working on the NEAR Protocol. With this, the network was run on the Proof-of-Stake consensus, which is more sustainable, to assist in the verification of transactions and the generation of blocks.

How does NEAR Protocol work?

Using the sharding solution, NEAR runs on delegated proof of stake consensus model to increase its throughput and efficiency.

As in other cryptocurrencies, such as Polkadot, sharding is different because each shard is considered a separate blockchain. However, this is not the case with NEAR. It is, therefore, able to partition the blockchain chain into smaller, more manageable portions, or shards.

The sharding procedure also minimizes the computational load on the network. This results in higher transactional speeds.

For further efficiency, Near includes a new consensus mechanism called Doomslug. This allows validators to take turns producing blocks rather than competing directly based on their stake.

Like Ethereum, Cardano, and TRON, it can be regarded as a “base-layer” blockchain. This implies that it serves as the framework for other applications.

What are the advantages of the NEAR Protocol?

It allows validators to easily stake, get rewards, and contribute to the project’s scalability

Its nightshade technology is designed to increase the cryptocurrency’s throughput. This also allows for the seamless interoperability between chains.

The NEAR protocol is also attracting a growing number of developers from competing blockchains like Ethereum. This is mainly because of its unique transaction speed and minimal fees.

In addition, it is a home to a number of decentralized applications that are relevant to the fast emerging creator economy. These are mostly exchanges for the trading of non-fungible tokens (NFTs)

What are the disadvantages of NEAR Protocol?

At the moment, governance (voting) is restricted to validators alone. This means that other users are excluded from participating in the expansion and improvement of the project.

NEAR Token 

The NEAR Protocol makes use of its own native token, called NEAR. It enables users to pay transaction fees, run programs, and pay for storage space.

There are also 730 million NEAR coins in circulation and a total supply of 1 billion. To purchase or sell NEAR Protocol, Binance and Huobi are still the most popular exchanges at the moment.

Additionally, developers who construct smart contracts are eligible to get a share of the transaction fees that are generated by their contracts. Similarly, NEAR has built a bridge with Ethereum, which enables users to move ERC-20 tokens from Ethereum to NEAR and vice versa.

NEAR Protocol Staking

Validators are required to stake NEAR tokens in order to participate in the network. The amount of other validators inside a certain shard affects each participant. As this is what determines the exact number of tokens you need to stake in order to participate.

Therefore, each validator is entitled to a share of the block awards, distributed every 12 hours.

Future of Near

The NEAR Protocol’s goal is to become the preferred starting point for blockchain development projects. The speed is one of its most notable features. With a 1-second block cadence, it can execute 100,000 transactions per second (TPS) and reach transaction finality almost immediately.

However, it is doubtful, but not impossible, that NEAR can ever dethrone Ethereum or even catch up to Polkadot in terms of popularity and embrace at the moment.

Instead of attempting to compete with the big players in the blockchain space, NEAR should aim to carve out its own niche. As long as NEAR’s community and marketing team can pull this off, the future seems bright for NEAR.

 

Ayo Alabi
Ayo Alabi is an experienced writer and Fintech enthusiast, passionate about educating people and helping businesses that want to see their Google search rankings surge. Her articles have appeared in a number of e-zine sites, with focus on balancing informative with SEO needs–but never at the expense of providing an entertaining read.

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