How it works

Polkadot uses a proof-of-stake consensus mechanism (as opposed to the proof-of-work system Bitcoin uses) to secure the network, verify transactions, and create and distribute new DOT. There are several ways DOT holders can interact with staking system — depending on how much time, technical knowledge, and money they want to devote. By staking and participating in the network, you may be able to receive DOT rewards.

Keep in mind

The reason Polkadot can process all of this information is because the many parachains do a lot of the heavy lifting for the main relay chain. As a result the Polkadot network can process more than 1,000 transactions per second, compared to about 7 for Bitcoin and 30 for Ethereum. As the network grows and more parachains are added, Polkadot should get even faster, with speeds that could hit a million transactions per second.

Released: May 2020