How to Buy Polkadot (DOT)

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Contributor, Benzinga
September 9, 2024
verified by Logan Ross

Want to know how to buy Polkadot? You can buy DOT on Coinbase.

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Polkadot

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Polkadot (DOT) is an open-source sharding multichain that operates on the Ethereum network. It utilizes oracle technology to connect various blockchains. This connection enables information sharing among multiple projects and networks. The primary goal of Polkadot is to establish a fully decentralized web where blockchains can effectively communicate. Currently, Polkadot ranks as the 15th largest cryptocurrency globally by market capitalization.

Interested in learning more about investing in Polkadot? This comprehensive guide walks you through the steps of buying Polkadot easily and securely. Start your crypto trading journey now!

How to Buy Polkadot (DOT)

Follow these easy steps to get started with your Polkadot crypto investment.

1. Open an Online Account

The easiest way to buy and sell Polkadot today is to create an account in a platform that supports DOT trading. Creating an account is relatively simple as long as you're ready to comply with the Securities and Exchange Commission (SEC) know-your-customer (KYC) guidelines. Sign up or register for an account using your email address and phone number. You'll need to authenticate your identity for tax purposes via your Social Security number, driver's license, address and a quick selfie. This shouldn't take more than five minutes.

2. Fund Your Account

You have several payment options to fund your trading account based on the platform you choose. These include wire transfer from your bank account, credit card/debit card or crypto deposit. Once you decide on the method that suits you best, simply follow the specific instructions provided by the platform, enter the desired deposit amount, and review any applicable transaction fees to ensure you understand the costs involved.

For cryptocurrency deposit, a wallet address should be generated directly from the crypto exchange. Transfer the funds from your personal wallet to the specified wallet address.

3. Purchase Polkadot (DOT)

The final step to investing in cryptocurrency is to place a buy order through your chosen trading platform. There are a few different types of buy orders, and each buy order gives a specific set of instructions to follow when they carry out your trade. Some of the most common types of buy orders you’ll see may include market order, limit order, recurring order and stop-limit order. Choose your preferred order type, determine the quantity of DOT you wish to purchase and execute the order.

What Is Polkadot (DOT)

Polkadot is a next-generation blockchain protocol designed to enable interoperability between multiple blockchains. The system features a central relay chain that coordinates the network along with multiple parachains, which are customizable blockchains optimized for specific applications. This innovative design enhances scalability by enabling parallel processing of transactions. Additionally, it fosters a vibrant ecosystem where developers can create and deploy decentralized applications (dApps) more efficiently. DOT, the native cryptocurrency of the Polkadot network, serves multiple purposes such as governance, staking and bonding. All plays a crucial role in the overall operation and security of the ecosystem.

Brief History of Polkadot

Polkadot (DOT) was founded in 2016 by Dr. Gavin Wood, one of the co-founders of Ethereum, with the aim of enabling a multi-chain ecosystem that allows different blockchains to communicate and share information seamlessly. Its development was catalyzed by the Web3 Foundation, which seeks to promote a decentralized internet. The network's token, DOT, was launched in May 2020. Polkadot gained significant attention and popularity, quickly becoming one of the top cryptocurrencies by market capitalization, currently ranked 15th. As of Sept. 9, 2024, DOT is trading for around $4.19 with a market capitalization of $6.2 billion.

Where to Buy Polkadot (DOT)

Here are some of the best platforms offering Polkadot today.

How to Store Polkadot (DOT)

Now that you know how to buy Polkadot, you need to learn how to store it safely. A cryptocurrency wallet is a mobile or desktop app that allows you to safely store your cryptocurrency with a private set of keys. You have two options: hardware wallets, which are physical devices that work offline, and software wallets, which are applications that require an internet connection to access your investments.

Here are a few of the best cryptocurrency wallets on the market:

  • Most Affordable: KeepKey

If you only need to store a bit of crypto, you might want to consider the secure and affordable KeepKey model. KeepKey is a simple, straightforward cryptocurrency wallet that connects to your computer via USB. KeepKey supports ERC-20 tokens like Polkadot in addition to other major cryptocurrencies like Bitcoin, Ethereum, Litecoin and more.

  • Best For Simple Setup: Trezor Model T

Trezor is a widely-used cold storage wallet known for its strong security and easy setup, which involves connecting the device to a computer or mobile device and following simple instructions. It features a full-color LCD touchscreen for effective coin management, making it suitable for both new and experienced investors.

Trade or Sell Your DOT Tokens

When considering how to earn a return on your DOT investment, you have several options. Staking allows you to lock up tokens for network support and earn rewards, while yield farming involves providing liquidity to decentralized finance (DeFi) platforms for interest or additional tokens. You could also hold tokens for potential price appreciation or lend assets on platforms to earn interest. Each strategy has different risks and returns, so it's essential to assess your risk tolerance and investment objectives before deciding.

Current Crypto Prices

The cryptocurrency market is exceptionally volatile. Even major cryptos can regularly see a 6% drop or increase per day. Take a look at how the crypto market is moving today with the chart below.

Add Polkadot to Your Cryptocurrency Portfolio

Polkadot is considered a good investment due to its innovative blockchain interoperability, which connects multiple blockchains for improved scalability and efficiency. Its community-driven governance model and commitment to technology evolution, along with a strong development team and partnerships, enhance its attractiveness. However, investors should remain cautious of the volatile nature of the cryptocurrency market and perform thorough research before investing.

Frequently Asked Questions

Q

Is Polkadot a layer 1 or layer 2?

A

Polkadot is considered a “Layer 0” blockchain which means that its a network blockchains can build on.

Q

Can Polkadot hit $100?

A

According to Changelly, Polkadot could reach $100 in the year 2032.

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About Sarah Horvath

Sarah Horvath is a prominent freelance senior copywriter renowned for her expertise in cryptocurrency. As one of the leading voices in the industry, Sarah’s insightful analysis and comprehensive understanding of cryptocurrency trends have made her a sought-after contributor to major finance sites. With a focus on providing clear, accessible information, Sarah empowers readers to navigate the complex world of cryptocurrency with confidence. Her dedication to delivering high-quality content has established her as a trusted source for cryptocurrency enthusiasts seeking valuable insights and guidance.