Polkadot (DOT): 5 fundamental points you need to know before thinking about investing in DOT

Polkadot is a scalable, secure, decentralized multi-chain network that also helps to limit costs. Rather than just a competitor to Ethereum, the Polkadot ecosystem should be seen as the perfect complement to existing blockchains. The DOT is the native currency of the Polkadot network.

Polkadot (DOT): the essentials to know

1 – What is Polkadot crypto (DOT)?

  • Basic principle: Polkadot is a scalable, secure, and decentralized multi-chain network designed using Substrate (a framework for creating compatible and specific blockchains composed of custom or pre-built components). This ecosystem can connect private channels or public networks. This sparks a new web form where independent blockchains can confidently exchange data and transactions.
  • The DOT is the native currency of the Polkadot network, the smallest unit of which is called the Planck. Unlike most other cryptocurrencies, there is no limit to the supply of DOT. It incentivises the network and adjusts according to users’ staking participation rates. How it works: via its DOT token, Polkadot allows the sending and receiving of funds. It also processes data and “high-throughput” transactions across multiple chains in parallel rather than sequentially across the entire network like legacy blockchains.

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2 – The project and the blockchain behind this ecosystem

  • Project: Rather than just a competitor to Ethereum, it should be seen as the perfect complement to existing blockchains. This proves that more than 350 projects are already in its ecosystem, including smart contracts, decentralized finance (defi), digital collectibles (NFT), and games.
  • Blockchain: Its architecture is coordinated by a chain of relays, which connects para chains, para threads, and gateways.
  • The relay chain is “layer 0” and manages consensus, security, and inter-chain interoperability.
  • Parachains are optimized blockchains that promote transaction processing. They also solve network scalability issues.
  • Parathreads offer an alternative to Parachains, temporarily participating in the network on a block-by-block basis.
  • The gateways further extend scalability and interoperability, ensuring compatibility with the Polkadot ecosystem and enabling Parachains to communicate confidently with external blockchains.

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3 – Polkadot (DOT) analysis and opinion


  • Thanks to the multi-chain network of its next-generation blockchain, this ecosystem manages to limit costs without sacrificing security or decentralization.
  • It also removes “friction” between projects, ensuring compatibility with platforms like Ethereum. There is, therefore, no need to choose one isolated blockchain network over another, with clearly defined community governance and automatic upgrades.


  • Polkadot is not the only versatile blockchain with smart contracts and proof of stake. We can also mention Cosmos or Cardano. Another disadvantage is that security vulnerabilities have already been exploited in the past. This resulted in the loss of millions of dollars.

4 – How to earn or mine Polkadot (DOT)?

Polkadot uses an NPoS (nominated proof of stake) consensus mechanism to coordinate its network. That rewards users who stake their DOT rather than the mining incentives offered in Proof-of-Work blockchains like Bitcoin.

This staking can be done in two ways: as a validator (those who create the blocks) or a nominator (those who vote to determine who will be a validator). In the first case, it will require a high level of technical know-how and an investment in a controller node that must work 24/7.

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