Why Learning about Ethereum Cofounder, Gavin Wood, Will Make You a Better Crypto Investor

Crypto enthusiasts and progressive investors alike owe a debt of gratitude to the co-founders of Ethereum. Yes, it’s true that Ethereum isn’t the only game in town when it comes to the exciting world of non-fungible tokens or decentralized finance (DeFi).

That said, if you examine the history of altcoins closely, you’ll notice that many of the top cryptocurrency projects (not named Bitcoin or Ethereum) are run by innovators who got their proverbial beaks wet by pioneering the invention of Ethereum and all of the decentralized application and smart contract functions that go along with it.

You and I have a few Canadians to thank for that. Vitalik Buterin is the leader of the pack. He may have been born in Russia, but he’s a Canadian citizen living in Toronto, Ontario who happens to be a proud graduate of the University of Waterloo. Anthony Di Iorio is a Canadian businessman who grew up in Richmond Hill, Ontario. He invested in Buterin’s idea after the two connected at a local cryptocurrency meetup. 

Fellow Ontarian, Joseph Lubin, also cofounded Ethereum and today runs a blockchain development firm called ConsenSys. Then of course there is Charles Hoskinson. He is not Canadian but is the founder of Cardano, now one of Ethereum’s direct competitors.

While there are three other Ethereum founders, we’re going to focus on one in particular: Gavin Wood, the founder of Polkadot.

Learning more about who Wood is, how his experience with Ethereum led him to create the innovative Polkadot project, and how the project is going to take blockchains and DeFi to the next level is going to make you a better investor.

Who is Gavin Wood, the founder of Polkadot?

Unlike the above Ethereum cofounders, Gavin Wood isn’t from North America. He’s British. While his dear friend, Mr. Buterin, gets most of the credit as the public face of Ethereum, Wood is the one who invented Ethereum’s programming language known as Solidity. He’s also the former CTO of the project and the author of the Ethereum Yellow Paper, which offers an in-depth explanation of Ethereum’s technical details.

After deciding to leave Ethereum in Buterin’s hands and launch his projects, Wood founded a company called Parity Technologies. Today, the company contributes to core infrastructure development on Ethereum, Bitcoin, Zcash, and Polkadot.

Why Gavin Wood Invented Polkadot

Like Hoskinson and the founders of many other altcoin projects, Wood’s interest in creating and launching Polkadot is rooted in the same desire that drives many of the blockchain world’s top developers and innovators. That is to pursue the continued scaling of security, transaction speed, app development, and the globalization of finance while continuing the mission of decentralizing and democratizing the worlds of finance and technology.

Wood and Polkadot Represent a Natural Progression in Blockchain Innovation

The idea of being an early adopter usually conjures up images in your mind of getting the latest smartphone or electric vehicle. It is driven by the desire to be the first to consume something. If you think about it, being the first to develop something also makes you an early adopter. The first-mover advantage is huge in the blockchain world.

It gives Wood an advantage. He understands (as well as anyone else) that Polkadot represents real, tangible progress. Take a step back and think about the progression you and I (and every other cryptocurrency investor) are living through.

Bitcoin is proving that cryptocurrency is a valid store of value. It achieves the goal of the first-ever blockchain a.k.a. ‘blockchain 1.0’.

Ethereum proves that cryptocurrencies and blockchains working together with sound programming structure are creating the world’s largest, most robust, and completely decentralized global computers. That’s blockchain 2.0. The fact that Gavin Wood has his fingerprints all over Ethereum makes him an early adopter and gives him that precious first-mover advantage, just like Charles Hoskinson and many other Ethereum co-creators.

Polkadot represents blockchain 3.0. It uses the basic principles of Bitcoin and Ethereum (like Cardano and other competitors) but presents unique points of difference than increased scalability and functionality.

Why Polkadot Projects Are Making Investors Wealthy

If you’re already a seasoned cryptocurrency investor, there’s a good chance you spend some time reminiscing about the good old days of 2017 once in a while. 2017 isn’t just the year that Bitcoin’s price exploded to an all-time high. It’s also the year that initial coin offerings taking place almost on the Ethereum blockchain turned early investors into millionaires.

Today, the same thing is happening on Polkadot, except that the launch of a new project isn’t called an ICO. It’s called an IDO. An Initial Decentralized Offering. The basic concept of the two is the same. You invest in the early development of a project and what you get in exchange is the potential to earn hundreds of times your investment quickly.

That said, there are a few things that make Polkadot different from Ethereum.

ParaChains and Parathreads

When it comes to scaling transaction volume and speed to a higher level in the cryptocurrency world, the best way to eat the elephant is one bite at a time. What do I mean by that?

One of the challenges for investors operating within blockchain 2.0 projects (such as the first version of Ethereum) is that you have to choose between one of two options.

You can certainly push transactions through faster on Ethereum than you can Bitcoin, but you have to pay higher fees for that (using decentralized exchanges built on Ethereum to make trades is very expensive). You can also pay fees that are significantly lower than those charged by the Bitcoin network or other blockchains, but your trades may not always go through, meaning that you miss out on getting the market price you want for your trades.

Those are just two of the reasons Ethereum is rolling out its 2.0 upgrade throughout the rest of this year. The thing is, Polkadot as it exists right now is already ahead of Ethereum in that department.

Polkadot uses parathreads and parachains to allow developers and everyday crypto users to participate in transactions that happen much faster. This approach uses less of the blockchain’s resources to get more work done. Ethereum is hoping to do the same thing with something called a beacon chain on its 2.0 launch, but again, Polkadot is already there.

Governance

All of the major decisions related to the future development of Ethereum happen off-chain. This is a common reality in both blockchain 1.0 and blockchain 2.0 projects. In the world of blockchain 3.0, governance belongs to the users.

Governance represents the ability to vote on the future development of a blockchain. Technically the concept does exist in older projects because even Bitcoin requires participants on the blockchain to reach consensus on the validity of transactions.

The thing is if you’re not a developer or large-scale crypto miner, your opinion on whether or not the rules of the bitcoin game should change at any moment holds zero weight. With Polkadot, governance happens on-chain. This means participants get to vote on decisions related to fees or the development of the blockchain. This idea exists within individual projects that live on the Ethereum network (ie. Yearn.Finance), but Polkadot has this concept built right into the blockchain.

Polkadot Is Turning Retail Investors into Lottery Winners

In 2017, a retail investor pouring their hard-earned Ethereum tokens into a project would be guaranteed to receive tokens from whatever project they are investing in (Tezos, Cardano, etc…).

Today, that retail investor can still get those future tokens in return, but it’s not as simple as just trading in Polkadot for those tokens. Now, you have to own PolkaStarter, PAID, or other third-party tokens that may or may not live on the Polkadot blockchain directly to earn the right to invest in a given project.

The fact that you need to do that also incentivizes you to hold onto PolkaStarter, PAID, or other tokens for the long term. That’s because oftentimes the longer you hold those tokens, you earn more entries that you can use to invest in future projects.

The above model means you’re essentially participating in a whitelist lottery. Most times you have to be randomly selected from the whitelist, own a certain amount of whatever the third-party token is, and then still have the capital left over to contribute towards the project you want to own a piece of to get in on the ground floor.

That creates several barriers to entry. Polkadot, the fundraising projects that live on its blockchain, as well as other competing blockchains are still trying to figure out the best way to democratize this process. It’s one of the biggest and most pressing challenges facing all new projects right now.

All of this might seem like it’s unfair or not worth the trouble, but the way Polkadot incentivizes developers is what is turning Gavin Wood’s vision into a huge success. It’s also allowing investors like you and I to profit handsomely from it.

Polkadot Is Turning Developers into Institutional Investors

Just a few years ago, a developer working on the Ethereum blockchain could launch a project just for fun and do it by themselves. Even today that’s still true (although not as common). Andre Cronje is the genius behind Yearn.Finance, a project with a multibillion-dollar market cap that is helping the entire world of DeFi explode. While he undoubtedly consulted a few colleagues to get the project off the ground, it didn’t cost him millions of dollars in marketing or blockchain development fees.

The occasional exception aside, modern-day blockchain development is now a much larger undertaking.

For a project to earn a spot on the Polkadot blockchain and gain access to all the money-hungry retail investors like you and I that are going to help make them a success, developers have to compete for access. They too are also competing in the lottery of sorts because not every project with money behind it is guaranteed a spot.

I’ve written about the fact that institutional investment in Bitcoin and Ethereum is accelerating quickly many times here at Netcoins, but in the future, the idea that developers are going to need a lot more money behind them to launch next level blockchain and cryptocurrency projects into the stratosphere is going to turn developers into institutional investors. It’s already happening now, and the trend is going to continue to grow exponentially.

Why is this good for you, the retail investor? It makes the cost of failure much higher, which means blockchain developers are going to be more motivated than ever to succeed. It means that if developers are risking larger amounts of capital to get their projects off the ground, they have a built-in incentive to produce projects that solve real-world problems in the most fundamentally sound way possible.

The fact that developing projects on Polkadot is such a high risk/high reward proposition lowers the risk to you as a retail investor.

Start Investing in Blockchain 3.0 with Netcoins

Much like blockchain development itself, the journey of a retail investor usually follows a certain progression. You hear about Bitcoin and blockchain technology and learn the basic principles. Then you become interested in other projects that you see spiking in value. You become interested in altcoins. Then you realize that while Ethereum is the second most valuable cryptocurrency in the world and the first-ever widely adopted altcoin, other projects might also have value.

Perhaps you’re already into blockchain 3.0, or maybe you’re still just learning about Bitcoin. Either way, you might want to take the fact that you’re reading this post as as sign to sign up for an account with Netcoins.

You can register for free and get access to Bitcoin, Ethereum, stablecoins that stay tied to the value of the American dollar and the Canadian dollar, and a few other altcoin projects. Netcoins is one of the most trusted cryptocurrency exchanges in Canada.

Now that you know who Gavin Wood is and what his flagship project is about, it’ll make you a better investor – even if you don’t invest in Polkadot directly.

If you’re looking to purchase Bitcoin or other cryptocurrencies, Netcoins is Canada’s first publicly owned crypto trading platform to be fully regulated. Simply create an account with Netcoins, fund it with an e-Transfer (more funding options available) and head to the trade page to buy bitcoin. Sign up today!

Let your cryptocurrency investing journey continue!