A parachain is capable of self-governing. It is not dependent on the main chain and can therefore create its own token or cryptocurrency. In other words, a parachain can focus on a single component without existing in isolation. Thanks to this technical setup, many specialized blockchains can communicate within Polkadot, allowing for the sharing of data, value, assets, tokens, etc. Combined with the finalization component of the ”Relay chain”, these blockchains can create an efficient and secure network.

How does Polkadot work?

The main Polkadot blockchain is called the “Relay chain,” and it is where transactions are finalized. On this main chain, the process of adding new transactions to the chain is separate from the process of verifying that these transactions are correct. By separating these two processes, Polkadot can process more transactions faster. Polkadot can currently process over 1,000 transactions per second. “Parachains,” or parallel chains, are custom blockchains that use the relay chain’s computing resources to verify the accuracy of transactions. Another feature of Polkadot is its “bridges,” which enable the Polkadot network to interact with other blockchains, allowing tokens and coins to be swapped without a centralized exchange.