What is NEAR Protocol?
NEAR Protocol (NEAR) is a blockchain-based platform that aims to power the future of the open web. It serves as a collective, a foundation, and a development platform for creating new coins, applications, and industries without the need for central authority. NEAR Protocol provides users with a secure pool of resources to execute apps, which use data and identities entirely controlled by the users themselves.
Traditionally, centralized cloud servers run by tech giants host most applications. However, this makes data vulnerable to censorship, hacking, and manipulation. On the other hand, if the cloud that hosts these applications is managed by a global community that is open to everyone, the process becomes transparent. This allows users to keep high-value assets, such as money, identities, and digital assets, on these platforms and use them safely without intermediaries or platform interference.
NEAR Protocol aims to overcome three main barriers to mainstream decentralized applications: a small user base, limited scalability, and security challenges. To do so, NEAR proposes to use sharding to solve the scalability issue. This technique minimizes the computational load by separating or partitioning the network into "shards." As a result, nodes only execute code relevant to their shard, allowing them to parallelly compute and increase the network's capacity as the number of nodes grows.
The core platform of NEAR Protocol comprises a cloud of community-operated nodes, and smart contracts can be deployed to this cloud. Users can use the applications they power without needing permission from a central agency. Smart contracts are just like regular contracts, but instead of being drafted on paper, they run in the form of protocols on the blockchain. Applications can securely store their data, ranging from games to digital currency, on the platform.
To align the objectives of users and developers, NEAR Protocol uses its native token, NEAR, which enables customers of these cloud resources to pay the service providers and ensure that these players act in good faith. The NEAR token serves several key utilities, such as paying processing fees and transaction charges to the platform for storing data, participating in the staking procedure to run a validating node as part of the network, and engaging in governance processes to influence network resource allocations and technological design roadmap. In short, the NEAR token facilitates the economic coordination of all network participants.
NEAR Protocol was initially conceived as a machine learning platform founded by Illia Poloshukin and Alexander Skidanov in 2017 under the name Near.ai. Polosukhin holds a master's degree in applied math and computer sciences from Ukraine and has worked as a software engineer for tech companies, including Google. Similarly, Alexander Skidanov holds a master's degree in computer sciences from Russia and worked as a techie in software giants like Microsoft.
The NEAR platform uses a proof-of-stake mechanism to validate transactions where validators run nodes to stake some of their tokens as a deposit to ensure good conduct. In a unique way of "threshold proof of stake," the platform conducts an auction of tokens and offers "seats" to validators. Based on the minimum number of tokens they hold from the auction, a given validator may play one of the possible roles: block producer, chunk producer, or hidden validator. Periodically, validators are rewarded with NEAR tokens in proportion to the number of tokens staked by them. However, the protocol caps the minting of new tokens at 5% per annum.
In conclusion, NEAR Protocol (NEAR) is a promising blockchain-based decentralized application platform that aims to overcome the challenges of traditional decentralized applications. By utilizing sharding to improve scalability, a cloud of community-operated nodes, and a free-market-based system that aligns the objectives of users and developers alike, NEAR Protocol provides a transparent, secure, and efficient platform for users to create new coins, applications, and industries without the need for a central authority to oversee the process. With its native token NEAR serving key utilities, including paying processing fees, participating in staking, and engaging in governance processes, NEAR Protocol enables economic coordination of all network participants. As the world moves towards a more decentralized future, NEAR Protocol is definitely a platform to watch.
The investment information, comments, and recommendations provided here do not fall under the scope of investment consulting. Therefore, making an investment decision based solely on the information and comments provided here may not yield results that meet your expectations.
Stay ahead of the competition by accessing high-quality data, advanced tools, and expert research.Try for Free