Polkadot is a crypto that cannot be mined in a usual way. The platform works on the NPoS consensus algorithm, so if you want to mine tokens using computing equipment, it won’t work. But tokens can be earned. Users who support the ecosystem functionality do so. So you can save the computing equipment for projects where you will really need it.
Types of Mining on the Polkadot Network
As for conditional mining, there are several types of mining on the Polkadot network:
Staking. This is a method that resembles a deposit in a bank with interest (floating or fixed). Staking can be done on specialized platforms and exchanges.
Maintain the work of the blockchain ecosystem. That is, you need to become a validator, nominator, collator, or fisherman. Keep in mind that each category of participants has its own tasks, and he must perform them at the highest level, otherwise he will not receive any reward.
Who are Validators, Nominators, Collators and Fishermen?
Validators of the Polkadot network are users in the formation of the base chain. Their job is to connect to the perchain (the different blockchains in the DOT shared network), validate the blocks, and perform transfers across the chain.
Nominators in the Polkadot network are users who occupy the position of chief security assurance officer of the blockchain network. Their job is to nominate and rescue validators. At the same time, they are responsible for all actions of those approved as validators. The level of compensation for these users is directly related to the quality and integrity of the validators, and they forfeit their deposits in case of problems.
A collator in the Polkadot network is the owner of a full node of any of the parachains connected to Polkadot. After forming a block in his chain, he sends it to a validator for verification and signature.
Polkadot network fishermen are users who represent a special “people’s” control. They do not have any of the power that the other three categories of network members have. However, fishermen can gamble and are busy looking for those who would attack or otherwise harm the network. From there they earn their income. But it depends a lot on the amount of betting.
How to Mine Polkadot?
To get Polkadot tokens, you can forget about classic mining, so no additional programs and equipment are needed. But if you want to make a decent profit, then you need to become an ecosystem validator. In that case, you need:
- Knowledge to understand how chains are formed, what you need to do so that the operation is successful and you are not accused of sabotage. A feature of Polkadot is that validators who fail or maliciously harm the chain are punished.
- Professional equipment. A validator must have technical equipment that is noticeably more powerful than the average network member.
- Communication with pools. To perform its tasks well, the validator must join the pools with which it will work.
How to Mine as a Nominator?
To earn Polkadot tokens (DOT), you can become a nominator. You can do this by adhering to the following strategy:
1. Go to the Polkadot-JS UI main page and create an account.
2. Click the Staking link under the Network tab at the top.
3. Click “Accounts” (in Network section) and then “+ Nominator button” (top right).
4. Choose your Stash and Controller accounts. Then select the amount you want to bond and the rewards destination and click “Next”.
5. In the next screen select your validators.
6. Once you’re done, click “Bond and Nominate”.
7. Enter the password for your account and click “Sign & Submit”.
It is important to fill in all the fields. Specify the bet amount (in crypto) to log in as a nominator. When specifying the amount, make sure that it is less than the amount that is stored in the wallet. It is important that there is at least 0.1 DOT left in the wallet to keep the bet from being burned.
Reserving tokens is not the last step. You still need to assign validators. You must choose the validator carefully, because if you choose a fraudulent validator, the nominator will lose not only the potential profit, but also the reserved tokens.
How to Mine as a Validator?
Running a validator on a live network is a huge job! You will be responsible not only for your share, but also for the share of your current nominators. If you make a mistake and get cut, your money and your reputation will be at risk. However, running a validator can also be very rewarding, knowing that you are contributing to the security of the decentralized web by increasing your stash.
To be a validator you will need professional equipment, for example a cloud server running Linux. You may choose whatever VPS provider that you prefer. As OS it is best to use a recent Debian Linux.
The features posted above are not a hard requirement to run a validator, but are considered best practice. Running a validator is a responsible task; using professional hardware is a must in any way. To be a validator you will also need to install rust and dependencies. The full and current instruction you can find on wiki.polkadot.network.
On Polkadot, the minimum stake backing a validator in the active set is 1390878.651 DOT in the era 955.
There is a huge advantage in such type of mining, because this doesn’t hurt your GPU as in classic mining. How to save your GPU you can read in the article Does crypto mining damage GPU? Tips to take care of your graphics card.
Why to Mine Polkadot?
In 2020, on May 26, the project was launched. One of the creator is Gavin Wood, a co-creator of Ethereum, one of Polkadot’s developers. The major organization for research that looks after Polkadot’s open-source code is the nonprofit Web3 Foundation. Today’s Polkadot price is $5,79 USD with a 24-hour trading volume of $308 035 128 USD.
The current CoinMarketCap ranking is #12, with a live market cap of $6 693 138 246 USD as of the date of writing. Here is a graph of Polkadot to USD Chart from CoinMarketCap.
Polkadot Staking
The total staked DOT supply is 45%. You can earn up to 18% rewards for staking DOT and contributing to network security. It is simple to start out with just only one DOT. Earn incentives for promoting the blockchain system that uses the least amount of energy. Staking on Polkadot is designed for fair representation, maximum security, and decentralization.
You can control the network like a pro and stake. By eliminating the middleman, native staking rather than using services from outside parties maintains the network secure and decentralized. Utilize your DOT while maintaining your right to vote.
Where to Stake DOT
Stake Natively on Polkadot
It ensures you with full control, complete trustlessness and decentralization, gives the best option for network security, maintain your voting power. Also there is a low minimum of 1 DOT, and it is simply enough with the Staking Dashboard
Non-Custodial Wallets
There are unreliable assumptions. Also, if your wallet allows you to choose your own validators or join a native pool, that’s good for network security. And there is a minimum staking requirement if nomination pools are not used.
Liquid Staking / Third-Party Pools
Here will be moderately trustworthy hypotheses because you might need to share your keys. Pay attention that it is potentially exposed to more threats due to third-party tokens. And you will have to use third-party tokens to stake any amount with flexible unbond for a fee and liquidity. The last point is that it is negative for decentralization and network security.
Custodial Exchanges
There will be strongly trusted assumptions, lowest returns while betting on the short term, high penalties for unbonding before the term is over, but higher benefits for extended lock-in periods. You can make any stakes, but it is negative for decentralization and network security.
Conclusion
Mining Polkadot can be an excellent way to earn a passive income. You can not only potentially earn rewards for helping to secure the Polkadot network, but you can also be rewarded for holding DOT tokens. Polkadot’s NPoS consensus mechanism makes it easier for anyone to participate in the network, and rewards are distributed proportionally to all participants after the validator’s payment is deducted.
Working as a validator is not easy, so many people prefer to earn as a nominator. It is enough to reserve tokens and find a good validator, controlling the quality of its work. It is important that the validator is proven and shows consistently high results. Better yet, there should be several such validators under the nominator’s care.
FAQs
How to mine Polkadot on pc?
You need to become a validator, nominator, collator or fisherman.
How to mine Polkadot at home?
You will need a computer with professional equipment to mine as a validator or even a mobile phone to mine as a nominator and follow the instructions above.
How to become a Polkadot miner?
To get Polkadot tokens, you can forget about classic mining, so no additional programs and equipment are needed. But if you want to make a decent profit, then you need to become an ecosystem validator.
How profitable is Polkadot mining?
Each category of Polkadot miners has its own tasks, and if a person performs them at the highest level, he will be well rewarded.
