Decided Polkadot is a good investment? You can get Polkadot on Coinbase.
A limiting factor of cryptocurrency is that blockchains aren't typically interoperable. You can't send Bitcoin to an Ethereum address, nor can you send Dogecoin to a Bitcoin address. Polkadot (DOT) aims to solve this problem through technology can connect multiple blockchain networks. It can be used to transfer data, apps and tokens across multiple blockchains. Its goal is to further decentralize the web and make it easier to transfer items across different chains. This is interesting because it is helping to connect multiple blockchains and increase the efficiency of the crypto network. This technology can have a huge impact in a variety of situations.
What is Polkadot (DOT)?
Polkadot is a multichain network that can process transactions across parallel chains or parachains. Over 100 chains are linked to the network, allowing for up to 1,000,000 transactions to be processed per second. The network is verified through a proof-of-stake system. Those connected to the network can verify transactions to receive freshly minted tokens. Transactions are sent through the chain to be verified.
Most of the chains can still act independently, choosing to run the decentralized applications (dApps) and code they wish. DOT is a governance token, allowing users to vote on new protocols and the future of the technology. The amount of votes is based on the amount of token owned.
DOT Price
DOT has a market capitalization of around $20 billion with nearly 1 billion tokens in circulation. It saw highs of over $50 in late 2021, however, the currency is down along with the rest of the cryptocurrency market currently sitting around $7. With such a large market cap, Polkadot within the top 15 largest cryptocurrencies on the market.
Polkadot Competition
Polkadot faces serious competition, going head-to-head with crypto giants such as Cardano and Ethereum. All of these technologies are aiming to make crypto more efficient, connecting people from around the world. They are also focused on the environmental aspects of crypto. However, Polkadot has risen the crypto rankings at a much quicker speed than its competitors.
The crypto launched smart contract capabilities in May 2021, and already supports hundreds of projects. This contrasts with Cardano and Etheruem, who did not find this amount of early success. Polkadot also allows developers to create new chains. Networks like Ethereum and Cardano rely on existing networks, limiting the decentralization the networks can have. While Polkadot faces some serious competition, it is quickly setting itself apart in the market.
How to Buy Polkadot (DOT)
Now that you understand the basics of Polkadot and its competitors, you may be interested in purchasing the asset. Fortunately, this is an easy process, involving just a few simple steps.
Step 1: Open an online account.
The first step in purchasing DOT is to open an account on a crypto exchange. This is very simple to do and usually only requires an email or phone number. While there are many exchanges to buy DOT, there are a few that stand out due to low fees, simple interface and speed of transactions. Checkout some cryptocurrency exchanges that support Polkadot below.
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
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Step 2: Buy a wallet (optional).
While exchanges serve as mediums of purchase and sell cryptocurrencies, wallets serve as a way to store cryptocurrency. Wallets can add another layer of protection to your crypto assets.
Best hardware wallet: Ledger
Ledger is a hardware wallet that is extremely easy to use and supports the sending and receiving of DOT. Once you have purchased a Trezor hardware wallet, you simply download their software onto your computer and create an account. You’ll be assigned a wallet address (typically a long string of letters and numbers) and then you can send and receive DOT through the wallet. Hardware wallets offer an extra level of security as opposed to software wallets. However, they cost money to attain, whereas software wallets are typically free.
Best software wallet: Coinbase Wallet
Coinbase provides a simple and easy approach to investing in cryptocurrency. It is also easy to send cryptocurrency across the blockchain. Some other options for exchanges are Gemini.com and Crypto.com. Unlike these other options, Coinbase offers a dedicated wallet service, Coinbase Wallet, to let you hold custody over your digital assets. After you create an account on an exchange, you can link your bank account and send funds to your account. Then, you use the funds to purchase Polkadot.
Step 3: Make your purchase.
On Coinbase or other supported exchange, head to your account. There, you will find a tab to link a bank account to your account. Enter in your bank details through a secure 3rd-party service and transfer the desired amount of funds into your account. From there, navigate to the trade tab. There, you can either scroll or search to find DOT. Once you have located the currency’s profile, you click trade and then purchase. Enter in the amount of DOT you wish to buy and the currency will then be in your profile.
Bonus Section
Keep an eye out for new projects on the Polkadot chain. These could involve social media or websites. News of these projects could have a profound impact on the price.
Current Crypto Prices
The start of 2022 has been generally bearish for both traditional equities and cryptocurrencies. While Bitcoin and most other cryptocurrencies are still trading well below their all-time highs, many long-term investors are still bullish on the asset class. Unlike the stock market, the cryptocurrency markets never close, and are accessible globally. For up-to-date pricing data, check out our table below.
Is Polkadot a Good Investment?
Polkadot is a unique asset that has quickly gained traction in the crypto sphere. It uses revolutionary technology to further decentralize the blockchain and allows you to create new chains. However, it has powerful competitors that may outcompete with Polkadot over the long run. But, Polkadot has distinguished itself by creating cross-chain features to connect different blockchains in a seamless fashion. Future projects and uses of Polkadot will ultimately determine the price.
Polkadot is a strong force in the crypto world and has limitless potential.
Frequently Asked Questions
What does Polkadot allow for?
Polkadot allows for data and tokens to be transferred across blockchains.
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About Caden Pok
Caden has been involved with crypto since 2018, when he began investing, trading, and mining tokens. He took part in undergraduate research studying cryptoeconomics at the University of Michigan, where he will graduate Phi Beta Kappa with a bachelor’s in economics in 2025. He is experienced with DeFi technology and multiple blockchains, currently investing in Ethereum and Bitcoin.