Polkadot can be described as a secure and scalable next-generation network made up of blockchains. It links blockchains and facilitates the transfer of data and value among previously incompatible networks, such as Bitcoin and Ethereum, in a trusted way.
Its innovative concepts for scalability, interoperability, governance and blockchain code update have earned Polkadot the nickname the “Ethereum killer.”
The Polkadot ecosystem is powered by the DOT token, the network’s native coin used for payments, network governance, staking, reward incentives, transaction fees, etc. Numerous cryptocurrency exchanges offer support for the DOT token. You can check the current price of DOT, as well as detailed information about several of the fastest-growing and most important cryptocurrencies, on CoinStats. It is one of the top crypto platforms.
Continue reading to learn more about the Polkadot protocol, the DOT token and how you can instantly buy Polkadot.
Let’s jump right in!
Both the pros and cons
There are pros
- Blockchain technology is well-developed
- Active community
- Many platforms available
- Secure platform
- You have the chance to win.
Cons
- Elaborate consensus system
- For beginners, it can be confusing
- Competitors are fierce with layer-1 platforms.
Let’s discuss the Polkadot purchase process first before looking into the Polkadot Network and its difference from other layer-1 blockchains.
Four Quick Steps to Purchase Polkadot.
Polkadot DOT, one of the most popular crypto assets available on the market is Polkadot DOT. Polkadot can be bought on most major cryptocurrency exchanges via fiat currencies or other crypto currency. Exchanges all charge fees or spreads to fund their operations. Fees can vary greatly between exchanges so make sure you are aware of additional fees.
Step 1: Select a Crypto Exchange
You must first choose the best exchange that suits your investment requirements to purchase DOT. Consider its reputation, trading fees and customer support. You have two options: central exchanges and decentralized ones (DEXs).
Decentralization plays an important role in the way that exchanges perform their transactions. It also affects the crypto variety of the exchanges, their support for wire transfers and the risk level.
Centralized Exchanges vs. Centralized vs. Decentralized Exchanges
A Centralized Exchange such as Coinbase or Binance acts like a third-party between the sender of a transaction and the receiver, unlike peer-to–peer transactions that are executed using decentralized exchanges.
Moreover, there’s a substantial difference in the listing process, which evokes several security concerns to be considered before trading on any exchange.
Exchange Security
Security is a key factor in choosing the right cryptocurrency exchange. Because they are easy to list, decentralized exchanges let investors choose among many tokens. The chances of finding a fraudulent project on decentralized exchanges are higher than those found in CEXs.
To be listed on the CEX tokens have to meet several criteria, such as legal standards and security protocols. They also need to trade activity. As a result many traders feel constrained by mainstream CEX investment rules, rather than DEXs which allow for more freedom.
Polkadot can be purchased on many platforms, including Coinbase and Binance. Let’s take the Binance exchange as an example and demonstrate the further steps for buying Dot.
Step 2: Register
Congratulations, you’ve completed Step one and chosen the exchange. The registration process is typically quick and painless – you just need to provide an email address or a phone number, whip up a secure password, and you are on your way to owning Polkadot (DOT).
After completing the quick registration you are able to deposit funds and begin buying DOT. New investors will not be able to trade if they don’t agree to the KYC process. To use the full capacity of their account, traders will have to submit a valid ID and current address.
DEXs don’t require clients to go through KYC and give them more privacy. For CEXs like Binance, Coinbase and Coinbase however, this procedure is very standard. After traders have completed the KYC, their trading, withdrawal and deposit limits will increase.
Now that your account is set up and good to go, let’s move on to the next step.
Step #3: Fund Deposit
Next, deposit money into your exchange account. This will vary depending on what trading platform you use. For example, if you don’t yet own a crypto wallet or other cryptocurrencies, you might want to consider trading DOT with fiat currency.
DEXs don’t typically accept fiat deposits, so if you choose to purchase DOT on a DEX, you might have to purchase Bitcoin on a platform that allows fiat-BTC pairs, then transfer the BTC to the decentralized exchange and trade Bitcoin for DOT.
As we chose Binance exchange as our example, let’s look into all the deposit options available on the platform.
Bank Account
By depositing USD, you can buy Polkadot in Binance by making a bank transfer. You can purchase the Binance stablecoin by making a wire transfer to your bank account. After that, you will be able to swap it for other altcoins in order to buy DOT.
This payment method is quick and easy and shouldn’t create additional questions, as the interface is relatively straightforward.
It’s important to double-check the deposit amount before confirmation. There are several risk factors when linking your bank account or credit card to crypto-exchange.
MasterCard Credit/Debit
Binance also allows you to deposit money directly using your credit/debit card. By doing this, you will be able to skip the additional step of exchanging stablecoins for DOT. Existing accounts and new users have the option to use Visa or MasterCard as standard.
Polkadot and Other Cryptos
You can use your existing crypto wallet to transfer funds to Binance. Then you can trade cryptos for Polkadot. There are many DOT options on Binance.
TradingView will show you the exact price, order book and available pairs. It is very intuitive to trade and manage.
We are so proud of you for your Polkadot acquisition! Now let’s examine what you should do once you acquire the DOT coins.
Step #4: After You Purchase Polkadot.
You have many options when it comes to using your Polkadot.
Polkadot Security
It is possible to keep track of all your digital assets using a crypto tracker. However, it is important to protect them from being stolen. Most traders who don’t wish to exchange their crypto assets soon prefer to safely store them away from exchanges, all of which are susceptible to hacks in different measures.
Hardware wallets are a great option for long-term storage.
Take Polkadot coins
A lot of popular cryptos offer a stake option. However, not all traders understand the procedure. Staking basically means that you can make the coins “work for you” and earn you rewards in return for locking them temporarily and letting the platform use them for its needs.
Simply put, stakes are similar to owning Savings accounts. There’s a trust element involved, similar to trusting the bank to govern your money while holding it “locked” in a Savings account and getting yield in return.
NOTE: As the crypto market is highly volatile, staking is a high-risk endeavor; however, it’s also a high reward, so carefully study the system before consideration.
Trade Polkadot Coins
You can also stake and hold on to your coins. Trading your DOT may be profitable if the circumstances are right. Binance’s option pool includes over 300 Polkadot trade pairs. Your desired cryptocurrency isn’t available to trade directly with Binance. You can trade it in for Bitcoin (BTC), Ethereum(ETH), Bitcoin Cash, or other popular coins, and then swap it for the crypto you want.
Now that we have described the purchase process let’s learn more about Polkadot’s blockchain, its differences from other layer-1 projects, and the community behind the Protocol.
Polkadot
Polkadot – What’s it all about?
Polkadot, a layer-1 cryptographic blockchain that supports sub-divisions known as parachains (parallelized chain), is designed. The Substrate modular platform allows for interconnected and application-specific parachains. Developers can create compatible, purpose-built blockchains with Substrate by choosing specific components that better suit their requirements.
Polkadot unites all parachains into a single ecosystem, and uses the Relay Chain to serve as the base. Relay Chain doesn’t support application functionality. Instead, it contains Polkadot’s “heart” – the consensus, voting logic, and finality.
Polkadot’s goal is to make a decentralized Web, giving users total control. The protocol uses segments (or shards) to scale up the network. The system connects Blockchains to create a new web, where multiple blockchains can securely exchange data and value.
Polkadot is created to sustain all three distinguishing traits of blockchains – decentralization, speed, and security in a trustless environment.
The Polkadot’s DOT token is used for staking and governance.
The History
Polkadot is the brainchild of Dr. Gavin Wood, one of the original co-founders of the Ethereum network and former CTO of the Ethereum Foundation, where he helped develop Ethereum’s Solidity programming language. Wood started working on his idea to “design a shared version of Ethereum” back in 2016 and soon released the first draft of Polkadot’s whitepaper.
A year later, Wood partnered up with Parity’s Peter Czaban and founded the Web3 Foundation. Polkadot’s blockchain technology research and development was the primary purpose of the Foundation.
The Foundation held Polkadot’s first token sale in 2017 and raised $145 million in less than two weeks.
Gavin Wood, cofounder of Polkadot and CEO at Parity Technologies (the blockchain infrastructure company responsible for Parity Ethereum development), is also the CEO of Parity Technologies.
Polkadot Features
Consensus Mechanism
Polkadot uses quite an elaborate consensus mechanism named Nominated Proof-of-Stake (NPoS). The Network benefits from a hybrid consensus model that combines provable and probabilistic finalities. This is essentially a global agreement without any chance of reversal.
Consensus Roles
As mentioned, Polkadot’s validation process is quite elaborate. Four types of consensus roles are available in this system: The Nominators/Validators, Collators, Fishermen, and the Collators.
As they select the Validators and secure the Relay Chain, the Nominators become the first link of the system. They also stake their Polkadot Coins.
Validators are responsible for securing the chain. They validate proofs received from collators and take part in consensus. They stake their DOT tokens.
The Collators are participants of the consensus who “maintain shards” by collecting shard transactions from users and producing proofs for validators.
Last but not least, the Fishermen are responsible for monitoring the Network and reporting “bad behavior” to validators. According to Polkadot, any Collator or parachain node that is full of Collators can become a Fisherman in the network.
Governance
Two special functions or collectives that are responsible for governance in Polkadot include the Technical Committee and the Council. If they satisfy certain criteria, these two groups have the power to invoke privileged functions which affect whether a change is approved for referendum. Polkadot identifies the privileged functions by using Origins.
It represents passive stakeholders. It oversees all proposals, eliminates those that could be harmful, and makes recommendations for potential beneficial ones. Anyone holding DOT, the Network’s governance token, can propose their candidacy as a Council member.
However, “their reputation is at stake to act in good faith for the Network,” says the website. Votes from the community elect Council members.
The Technical Committee serves as Polkadot’s last line of defense against software errors. The Council selects the members of the Technical Committee based on providing a “formal specification or client implementation” of the Polkadot protocol.
Most Frequently Asked Questions
What if I have cash to buy DOT?
You cannot buy Polkadot tokens directly with cash. It is possible to purchase Polkadot using a wire transfer, credit or Bitcoin wallet.
Where can I buy Polkadot?
Europe generally is crypto-friendly, and there are many choices for crypto traders. The region has the largest number of crypto exchanges worldwide, with the support of the regulatory authorities.
Polkadot Has Smart Contracts
But not on Relay Chain. It doesn’t directly implement smart contract; its parachains do. So it’s better to say that the Polkadot Ecosystem has smart contracts versus “Polkadot has smart contracts.”
Polkadot is trustworthy?
There are many scams in the crypto market, so it is important to trade securely. Polkadot, however, is not a fraud. It has a complex ecosystem that includes hundreds of developers.
The current Polkadot value, and detailed information on some of the largest and most rapidly-growing cryptocurrency on CoinStats’ crypto portfolio tracker are all available on this excellent platform.
Disclaimer
This website contains information that is intended to be informative. It does not recommend you to purchase, sell or hold any security or financial products or instruments mentioned. Nor does it provide investment advice, financial advice or trading advice. It does not endorse any particular providers.
Cryptocurrencies can be volatile. Any investment could result in loss of capital. Make sure you do your research and get your advice. Only invest the amount that you are able to afford. Most regions are not regulated for cryptoassets. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant regulators’ websites before making any decision. Polkadot’s performance can be unpredictable. Its future performance cannot be guaranteed.
CFDs and stocks trading can pose significant risk. CFDs can result in losses between 74-89 percent of retail investor account balances. Before making an investment, you should carefully consider your situation and explore your options.
Conclusion
Polkadot ecosystem is an elaborate and complex project that has a huge development team. While the project is not new and won’t earn you explosive three-digit rewards in a few months, Polkadot’s unique consensus mechanism allows you to earn rewards on your DOT tokens instead of idly storing them away in a wallet.
Polkadot’s DOT tokens can be purchased on many cryptocurrency exchanges. You can buy Polkadot tokens on any crypto exchange, whether you are a CEX or DEX. They can be traded or held at your convenience.