Near Protocol: What it is and how it works
Near protocol is on the run to become the quickest digital ledger in the world.
The tier 1 blockchain network offers a platform for the [creation of decentralized applications by developers](https://www.coindesk.com/learn/creation of decentralized applications by developers what-is-a-dapp-decentralized-apps-explained/) (DApps). Since Ethereum is the most widely used layer one blockchain, this technology is Ethereum's new rival.
The token's price, which climbed to an all-time high of $20.44 in January 2022, is built around the concept of sharding, which attempts to break the system infrastructure into several pieces, also known as nodes, only need to process a subset of the network's transactions.
The network NeaCollective built uses a method called Proof-of-Stake (PoS) that supports smart contracts, thereby allowing efficient energy use and transactional cost.
Key takeaways under Near protocol
· Near protocol is a tear one blockchain system that has implemented sharding to increase transactional throughput.
· Between March and April 2022, the Near token's value doubled to more than $17.
· The network uses Proof-of-Stake as a staking technique to encourage wide-scale participation among its users.
How does the Near protocol achieve this?
The proliferation of decentralized applications (DApps) in the Bitcoin sector, including everything from games to financial services, has skyrocketed. But it's also apparent that scale is still a problem for most blockchains.
It is no news that many digital ledgers have scalability issues, especially more established ones like Bitcoin and Ethereum. The root source of the problems is their inability to quickly process enormous volumes of transactions at reasonable prices.
This problem is being addressed by initiatives like this fast-growing technology, which creates a centralized system with a different architecture called sharding to solve the issue. It entails segmenting the blockchain into smaller chains that are being worked on by various validators and that are frequently linked to one another. The network effectively avoids the issue of growing too large by slicing itself into smaller pieces.
This innovation is by no means the very first ecosystem to use sharding. It has been considered an Ethereum fix since 2013 and, as a result, claims that it offers "infinite scalability," which means that the number of transactions occurring on the framework can grow indefinitely without slowing down.
Sharding allows the technology to divide the cryptographic ledger into smaller, easier-to-manage chunks, lowering the computing effort, lightening the network's pressure and boosting transaction throughput.
This protocol follows other Proof-of-Stake (PoS) programs with extremely cheap transaction fees compared to other blockchains like Bitcoin and Ethereum.
According to the Near website, the cost of transacting money is approximately 4.5 x 10-5 native tokens, making their transactions almost as inexpensive as those of Solana.
As earlier mentioned, the digital application uses a PoS system against Ethereum's Proof-of-Work (PoW). However, despite its features, the protocol still has much to prove as Ethereum's opponent. Others have been around for longer and are becoming popular; two of the most well-known are Solana and Polkadot, whose native tokens are SOL and DOT, respectively.