Cryptocurrency is a trending issue in the world and a lot of people are currently diving into the community because of the gains attached to it. One of the cryptocurrencies which seem to be top buy in the market is the Polkadot coin also known as DOT.
In this article, I would be giving a rundown on how to buy your own polkadot coin. I will also be giving a rundown on certain details you might need to know before you delve into the world of cryptocurrency and buy Polkadot.
Table of contents
What Is Polkadot (DOT)?
Polkadot is a new generation protocol with the objective to unite blockchains into a single unified network. Polkadot was designed as a branch of a dream for a decentralized internet that gives back control to the users, with the goal to build a sustainable network capable of allowing specialized blockchains to communicate with each other by attachment to the Polkadot network.
It is the brainchild of the co-founder of the Ethereum network, Gavin Wood. With a white paper released in 2016, the Polkadot team tailed Ethereum and set up its web3 foundation in Zug, Switzerland, where the Polkadot code base is developed.
Later in October 2017, Polkadot held an initial coin offering (ICO) where close to half a million ether was collected but due to some bugs in the Ethereum wallet software, two-thirds of these ether coin was stuck, and remain inaccessible to date.
Regardless of this setback, the Polkadot team continued with the development and on May 26th, 2020, Gavin Wood announced the creation of the Polkadot’s Genesis block. This marked the
beginning of the Polkadot network.
Why buy Polkadot (DOT) coin?
Now the reason to buy any cryptocurrency lies in its use case, the better the use case of the cryptocurrency the more potential the token has. Now, the Polkadot network has a major objective to solve difficulties encountered by other individual blockchains.
It aims to solve issues and provide innovative solutions for scalability, interoperability, governance, and blockchain code updates.
With these improvements, it’s no news why Polkadot is known as “Ethereum Killer”, sadly, the Polkadot coin is not the only coin that has been referred to with the same name.
Polkadot aims to create a decentralized web, web 3.0 uses its connected blockchain as the basis for this.
If the mission of the Polkadot network to connect other blockchains to their network is successful, then we are looking at an interconnected web specialized blockchain with the ability to exchange data with one another.
This leap would revolutionize the usage of Defi and provide monumental benefits in the crypto space. If this eventually happens, the demand for the Polkadot coin would go through the roof and so would its price.
See Also: Is Bitcoin a Good Investment? Everything You Need to Know
Where to buy polkadot?
The DOT token is listed on several large cryptocurrency exchanges like FTX, Kraken, Huobi, and Bitfinex. You can also choose to buy DOT tokens directly to your wallet like a trust wallet using a third-party provider within the wallet to make the purchase.
There are also other decentralized exchanges (DEX) are available where you can easily purchase your DOT tokens such as Binance DEX or 1inch (only over BSC — Binance Smart Chain).
How to secure your DOT?
The safest place to store your cryptocurrency like Polkadot is in your personal wallet for self-custody. They are a lot of available wallets which support polkadot. You can check a list of these supported wallets on the Polkadot website. Meta mask has announced that it would soon add Polkadot to its list of supported cryptocurrencies.
Other wallets you can safely store your Polkadot is on Trust wallet which allows you to store, send and receive DOT token as well. You can also decide to keep your polkadot in your centralized exchange accounts.
It is pretty easy to store your Polkadot here because it allows you to easily carry out transactions like trading, sending, and receiving the asset.
When storing your assets on a centralized exchange, you should be aware of the security risks because your assets would be exposed to third-party risk. If the exchange is hacked, go bankrupt, or be fraudulent, your assets may be lost forever.
What does the DOT cryptocurrency do?
The function of the DOT token can be categorized into three categories which were classified by the web 3 foundation responsible for developing polkadot. These categories are Governance, Staking, and Bonding.
Governance
Governance is the process by which DOT token holders are at liberty to vote on issues
concerning the blockchain like how the blockchain is managed. Token holders may vote on a list of issues which includes but are not limited to protocol upgrades and changes to the relay chain.
The vote each token holder gets is proportional to the quantity of DOT tokens the holder has.
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Staking
The Polkadot network is incorporated with a proof-of-stake mechanism which in basic
terms allow DOT holders to lock up their tokens which would help secure the
network and at the same time earn rewards for staking their DOT token.
To stake on the Polkadot network, there are two major methods to achieve this which are
either by acting as a nominator or a validator.
Whether you are a nominator or a validator, both get rewards for participating in the staking process. can lock up their tokens and help secure the network, in return for staking rewards.
Currently, nominators are the most popular and common means of staking on the Polkadot network as their role is limited to electing validators.
Validators on the other hand play a crucial role in the health of the network. Validators are responsible for running a node 24/7 which validates network transactions and ensures smooth operation.
Bonding
DOT can be used to launch new blockchains on its network. These new blockchains are
called parachains.
To successfully launch a parachain, you would be required to deposit DOT token in a process known as bonding.
If a parachain is retired, the deposited DOT tokens are returned.
How Does Polkadot Coin Work?
The Polkadot network operates on a sharded model similar to that of ETH 2.0. These shards are the individual blockchains connected to the Polkadot network also called parachains. The simultaneous operation of these parachains allows transactions to be processed in parallel rather than in a sequential manner.
Parachains are independent blockchains and each Polkadot network runs its own ledger has a unique state, adds transactions in blocks to its own blockchain, and also supports its own governance mechanism and users.
If a parachain can compile Web Assembly programming language and obeys the Relay Chain on the Polkadot’s own blockchain, then it can connect to the Polkadot network.
See Also: Is Litecoin A Good Investment?
How to Buy Polkadot Coin
To buy Polkadot for the first tie, there are certain steps you are required to take to achieve this. These simple steps will help you get all you buy your first Polkadot cryptocurrency.
- Step 1. Create an account on a cryptocurrency exchange that allows
you to trade DOT - Step 2. Deposit funds into your account
- Step 3. Buying DOT
Step 1. Create an account on a cryptocurrency exchange that allows you to trade DOT
Before you go straight into buying Polkadot (DOT), you would need to compare exchanges
that support DOT after which you would need to determine if the exchange also supports your local fiat currency, Bitcoin (BTC), or Ethereum (ETH).
When you select the best exchange for you, all that’s left is to register on the exchange using your email address, then create a password for the account.
Most exchanges would require you to carry out a KYC before you can access certain features. It is also advised to set up two-factor authentication to ensure that
your account is properly protected.
Step 2. Deposit funds into your account
Some cryptocurrency exchanges only allow trading of cryptocurrencies between themselves giving no avenue for trading with fiat currency like USD, EUR, or NGN.
If you however register in one of these exchanges then you would need to buy BTC or ETH first before you can start trading.
Once you have deposited your BTC or ETH to your account on the exchange then you are good to go. If, however you are on an exchange that uses fiat currencies to trade then you can deposit your preferred fiat currency on the exchange using either a bank transfer or card
deposit.
The process of deposit of either cryptocurrency or fiat currencies depends on the
the exchange you are currently on.
Step 3. Buying DOT
This is the final step to it. Basically, all you need to do is trade your current cryptocurrency or fiat with DOT to get polkadot cryptocurrency.
In this step as well, it depends on the exchange selected to know the specific steps to take but most times you would need to navigate to the market section and search for “DOT” and see the available pairs for you to trade or purchase this particular cryptocurrency.
From there all you need do is fill in the amount you wish to buy based on the fiat currency or cryptocurrency you have available and you have successfully purchased Polkadot (DOT).
See Also: How To Buy Ratcoin Easily: Step-by-Step Guide
Frequently Asked Question on how to buy Polkadot Coin
Yes, but this is dependent on the exchange which you have selected and if the exchange supports your local fiat currency to purchase DOT directly.
Attempting to time the market, especially in a sector as volatile as cryptocurrency, can be very risky and almost impossible. The best time to buy any asset is whenever you are ready. One useful strategy for those worried about timing the market is dollar-cost averaging.
To sell DOT tokens on a centralized exchange, you would need to select the stable coin or fiat currency pair of Polkadot (DOT) which you prefer then move over to the sell option in the selected exchange pair. Next, input the amount of DOT you wish to sell and the price you want to sell at and you are good to go.
Conclusion
To buy Polkadot is pretty easy if you follow the above steps. You would also get details about the Polkadot network which are vital before you consider investing in this cryptocurrency.
It is also important to note that cryptocurrency is an extremely volatile investment and as such you should be careful when investing.
We hope you got value from this article on how to buy polkadot coin. Get back to us on the comment section.
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