What is Polkadot (DOT) and How to Buy It?

what is polkadot and how to buy it

Polkadot is a blockchain designed to support a multi-chain future. At its core, the Polkadot network connects several smaller chains, called parachains, which may serve specific use cases. The Polkadot network serves as a bridge to these parachains, thus allowing cross-chain interoperability.

Polkadot has a native token, DOT, which supports network governance and can be staked to earn rewards.

In this comprehensive article, you will learn what makes Polkadot different from other blockchains. You’ll also see simple steps to follow in buying the DOT token.

Follow through as we give a detailed explanation of the topics below:

What Is Polkadot?

Polkadot is a decentralized protocol that enables the secure connection of multiple independent networks called parachains. With the aid of Polkadot, data can easily flow between parachains and other mainstream blockchains like Bitcoin and Ethereum without any intermediary.

Released in 2020, the network has a native token, DOT, which functions in two significant ways within the Polkadot protocol. First, DOT serves as a governance token, allowing holders to have a say in the protocol’s future. Investors can stake tokens with validators, thus assisting the Polkadot network in verifying transactions and issuing new DOTs using the Proof-of-Stake consensus mechanism.

How Polkadot Works

The Polkadot network is structured to allow the data transfer process from one blockchain to another to be fast and scalable. It keeps itself together by standardizing data and coordinating the connection of the other networks.

Polkadot serves as a Relay Chain, and the blockchains integrated with Polkadot are dubbed Parachains.

The number of parachains is essentially limitless. The more parachains in the Polkadot network, the faster transaction processes become. These parachains take most of the workload away from the relay chain. As a result, the Polkadot network can process more than 1000 transactions in one second.

Also, blockchains connected to Polkadot can use their PoS mechanism and choose when and how to run the decentralized applications (dApps) or tokens they utilize. 

Where to Buy Polkadot Coin

DOT is available for purchase on several popular cryptocurrency exchanges.

When deciding which crypto exchange to purchase DOT tokens, compare their minimums, fees, ease of use, customer support, and, most importantly, security features before choosing what works best for you.  

Best Crypto Exchanges for Polkadot

Some of the best crypto exchanges to buy DOT tokens are Binance, Coinbase, Kraken, KuCoin, Crypto.com, and Bybit.

How to Buy Polkadot (DOT)

Buying DOT is pretty straightforward and works the same way as purchasing other cryptocurrencies. 

First, open an account with a trusted crypto exchange online or through the platform’s mobile application. Creating an account with these trading platforms is relatively simple. You’ll be asked to complete a know-your-customer (KYC) process to verify your identity. This may involve providing your Social Security number (SSN), driver’s license, home address, a quick selfie, or any other mode of identity.

Complete the verification process and any other minor steps to become an approved user. As noted above, you can buy DOT from several crypto exchanges. In this article, we will consider how to buy the coin from just two of these exchanges, Binance and Coinbase.

How to buy DOT on Coinbase

Step one: Log in to your Coinbase Account through the exchange’s website or application

Step two: Add a Payment Method.

You can do this by tapping on the payment method box and selecting, from the options, the one you prefer. Making any payment on the app using a bank account or debit card is possible.

Step Three: Start a Trade.

On the home tab, click the + icon to find the list of digital assets available in the app.

Step Four: Select Polkadot From the List.

Search through the list of digital assets or type ‘Polkadot’ in the search box. Once the search results appear, select ‘Polkadot’ to begin buying.

Step Five: Input the number of Tokens you Want to Purchase.

Enter the amount you wish to spend in your local currency. The app will automatically convert that amount to its equivalent in Polkadot. 

Step Six: Finalize your Purchase.

Tap ‘Preview buy’ to finalize the process. The details of your purchase will come up on the screen. After ensuring there is no error, click ‘Buy Now’ to confirm your purchase.

Congratulations! You have successfully bought the DOT token(s).

How to buy DOT on Binance using a Credit or Debit card

Explained below are the specific steps required:

Step One: Log in to your Binance account.

Step Two: After opening the account, click on the ‘Buy Crypto’ option and select the currency you want to make payment with.

Step Three: Choose your preferred payment method. For instance, you may pay using a debit or credit card.

Step Four: On the payment screen, select DoT from the drop-down menu tagged ‘Coin.’After that, input the amount of Dot you want to buy.

Step Five: Click on “Buy DOT.” To complete this step, you will be requested to provide personal information like your name, picture, and a photo of a valid identity document, amongst other things.

Step Six: After completing the verification, fill in your payment information by providing your card details. Then, tap ‘Pay Now.’

Step Seven: After verifying your payment information, your account will be debited, and the amount of purchased DOT tokens will automatically be deposited into your Binance account.

The next step after a successful purchase is to either withdraw your coins to your personal wallet. Alternatively, you may leave it on Binance to earn interest using the Binance Simple Earn platform.

Note though that the buying process varies slightly, though, depending on the exchange you decide to make your purchase from. There’s usually a slight difference in the fiat currencies and payment methods that trading platforms support.

Is Polkadot (DOT) a Good Investment?

Since cryptocurrencies are known to be very volatile and unpredictable, DOT is not an exception.

The token reached an all-time high of $55 a year after its launch, making it one of the best-performing crypto assets in 2021. As of press time, though, DOT was trading at approximately $7 per coin, an 87% decrease in value from its ATH price.

As a relatively young project, DOT still has the potential to do better in the coming days. However, the fact that the token has yet to experience many market corrections puts one in the dark about whether or not it’s worth investing in.

Make your findings about the token and weigh the risks. If you’re satisfied with the results of your research and choose to invest, make sure to invest only what you can afford to lose.

Conclusion

Polkadot is a decentralized protocol that allows blockchains to interact with each other. You can buy the protocol’s native token, DOT, on popular crypto exchanges like Binance and Coinbase. Investors must do their research and invest only an amount they’re willing to lose.

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