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Where To Buy Polkadot (DOT) Coin And Analysis
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Home » Crypto » Where To Buy Polkadot (DOT) Coin And Analysis

Where To Buy Polkadot (DOT) Coin And Analysis

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This article was last updated on March 14, 2022

Whether you are a crypto enthusiast or are just tapping into the intriguing world of crypto, you’ve probably heard of Polkadot. It is one of the leading networks both by utility and market cap, always within the top 15 since 2021. Many are wondering where and how to buy Polkadot coins, which is exactly what we will be guiding you through. However, if you are unfamiliar with the network, we’ve also got our analysis on Polkadot (DOT) ready.

The main reason why Polkadot rose to popularity back in 2020 is that showed its plans to be a Layer-0 solution. It wanted to be a provider of security and interoperability between blockchains. Some call it the “Ethereum Killer” because it is quite interactive in comparison. This is also the reason why it drew the interest of professional traders, investors, and enterprises.

Another reason is that Polkadot allows developers to link blockchains to its ecosystem and even create completely new blockchains, which is the main focus of the network. This is also where the reason why Polkadot is named that way is hidden. Additionally, it is a general rule for investors to research networks in which developers are interested.

If you are new to the crypto world, we suggest checking our dedicated guide: Crypto For Beginners.

How & Where To Buy Polkadot (DOT) – Summary

Follow these few steps to buy DOT:

  1. Find a crypto exchange (CEX) platform that has DOT listed for purchase.
  2. Create an account with the chosen CEX.
  3. Fund your account.
  4. Buy DOT.
  5. (Optional) Transfer DOT to an external wallet.

This is just a summary of our in-depth guide on where to buy Polkadot coins from, which can be found further below, or by clicking its link in our table of contents.

What Is Polkadot (DOT)

The Polkadot blockchain seeks to incentivize a global web of computers to connect and secure the network, which will then be used to launch and support other blockchains. Therefore, it is an open-source shared multichain protocol. This is also the reason behind the name “Polkadot”. Imagine the pattern – each dot is its own blockchain where all are interconnected with each other.

Due to the interconnection, it facilitates the cross-chain transfer of all sorts of data and assets, not limited to tokens. This interoperability and security help solve scalability issues for the connected blockchains.

Polkadot was developed with Web3 in mind, aiming to act as the foundation of a decentralized internet of blockchains and networks. It also operates two types of blockchains simultaneously – the relay chain and parachain, which we will discuss in a second.

There are also two main tools allowing Polkadot to adapt and change whenever required – the Treasury and Kusama, both of which we cover below.

At its core, Polkadot uses a Nominated Proof-Of-Stake (NPoS) mechanism, which is a variation of the regular Proof-Of-Stake (PoS). The NPoS is how we refer to the procedure of appointing validators to be allowed to participate in the governance and consensus protocol. What is special here is that nominators back validators using their own stake as a “show of faith in the good behavior of the validator. However, the risk is higher here, because, unlike DPoS, nominators can potentially lose their stake if the nominated validator is a bad actor.

Although this does not directly connect with where to buy Polkadot coins from, we believe it is really important to get a general understanding of a network, before investing in it.

Relay Chain

The relay chain is the main network of Polkadot, which acts as its core, helping create consensus, security, and interoperability between the other blockchains. Furthermore, the relay chain is quite important for safety because it pools the security of all blockchains part of it, meaning they won’t have to scale to build independent security and waste resources.

Shards of different blockchains can connect to external ecosystems and networks using bridges, which we will discuss in a second.

Here, all transactions are permanent.

It has somewhat simplistic functionality because it is not responsible for the features the network offers. On this blockchain, no smart contracts are supported specifically for this reason.

Parachains

In contrast to the Relay Chain, the Parachains are user-created blockchains. This is also how the ecosystem refers to each individual layer-1 blockchain running on the network. Each of these blockchains can have its own cryptocurrencies and features. In order for a parachain to connect to the main network, they have to pay for a slot or get it on a lease.

Parachains directly benefit from the security of the relay chain.

At this moment, the Polkadot network can support up to 100 layer-1 parachains, although there are plans for more.

There are also the Parathreads that are essentially the same as Parachains, however, they use the pay-as-you-go model. This is suitable for networks that will not benefit from prolonged connectivity to the Polkadot ecosystem.

Bridges

Bridges are what allow the Polkadot ecosystem to interact with other blockchains. Currently, the developers are working on bridges to Bitcoin, Ethereum, Cosmos, and many others. This will allow each blockchain’s tokens to be swapped across with a central exchange.

These bridges will also allow for interoperability with other blockchains with smart contracts, whilst keeping the native protocol intact and unaffected.

Treasury

The Treasury, as you can expect, is where the Polkadot network raises funds. This happens by channeling some of the minting rewards of validators and a slice of transaction fees. These are fines paid by bad actor validators.

These funds the network uses to pay for the operability of the network and ecosystem. Additionally, they can also support projects that the community thinks are worthy, using the on-chain treasury funding proposals, which the Polkadot Council can potentially approve.

The treasury raises funds by channeling some of the validator rewards (from minting) and a fraction of the transaction fees and slashes (the fine paid by a validator who acts maliciously or incompetently). These funds are used to pay for the smooth running of the network and the wider ecosystem and can be used to fund projects supported by the community through on-chain treasury funding proposals, which can be approved by the Polkadot Council.

Kusama

Kusama is independent of the Polkadot blockchain, however, it uses a similar codebase. However, the difference comes when we get to speed and risk. Kusama has a lower barrier to entry governance and the governance itself is quite speedy. This means the network is somewhat chaotic and fast, living on the edge, which is the total opposite of the Polkadot network.

However, this is quite useful, because developers can experiment with early-stage deployments and ideas. Due to the similarity of the two, people use Kusama to test what they will later launch on the Polkadot ecosystem.

DOT Coin Utility

DOT is the official native token of the Polkadot ecosystem. You can use DOT for governance, staking, and parachain slot acquisition. With this section, we are going to help you understand where the utility is coming from and why the Polkadot coin might be a good buy. Let’s break it down further.

Owners of DOT can vote on upgrades, and major changes, transaction fees, the governance of the network, and other features concerning governance. This means that token holders essentially have full power over the entire ecosystem and protocol. The calculation and decision happen based on the number of tokens locked in the vote.

Another important utility of the DOT token is the option to stake it. This will help secure the network, but will also allow you to get a percentage return, based on how long you’ve locked it in for. The two options you have here are staking as nominators or validators. While nominators back validators, validators mint the blocks on the network. Both then receive DOT as a reward. This makes sure the network is and stays secure.

The final utilization of the token, for now, is the option to acquire a Parachain slot. This happens via an auction, where you get the lease if you win. Before getting there, however, you will need to lock a number of DOT tokens for some time. These tokens will be unusable until the parachain slot is no longer on lease.

Aside from all of this, the DOT token will be most likely in use by many of the Parachains. Let’s take the project Acala for example. It currently uses DOT for its liquidity pool in order to ensure its other services and features.

History

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Back in 2016, Gavin Wood – co-founder of Ethereum – wrote the Polkadot Paper (whitepaper). This is considered to be the conceiving date of the network and its ecosystem. The following year, Wood wanted to help the world research and develop decentralized web software and technologies, thus co-founding the Web3 Foundation.

However, although a whitepaper was written, the first Polkadot codebase came to life in 2019 in the form of Kusama.

In May 2020, the genesis block of Polkadot launched in the form of a proof-of-authority (PoA) network, but that quickly changed in June 2020. That is when the network turned into PoS. At this time, there was only one validator – the Sudo module – which was removed in July of the same year. Once that happened, a decentralized community of validators was established, helping secure the chain.

And then, the specialized Layer-1 blockchains – Parachains – started rolling out in December 2020.

In December of 2021, Parachains officially rolled out and the whole network went live. This is also where people started getting interested in buying Polkadot coins.

Governance

The governance system of Polkadot looks to involve all DOT holders in the process. This is in aims to make Polkadot a community-operated ecosystem, as we mentioned earlier. The Polkadot Council is the main link that decides on two major tasks: “proposing referenda and vetoing dangerous or malicious referenda”.

In order to become a part of the Council, a DOT holder will need to register through the Polkadot Apps Dashboard. Essentially, the Council represents stakeholders, in addition to submitting upgrade proposals and canceling malicious ones.

Proposals will only be approved through a referendum in a stake-weighted setting. These proposals will either come through an individual (DOT holder) or the Council itself.

The term of each of the 13 members of the Council is seven days, after which new ones are selected. Phragmen is the name of the algorithm that chooses new members from the available pool.

As people want to be part of the governing body, the interest in buying Polkadot coins started growing.

Parachain Governance

Each Parachain has its own governance team/members. They operate their blockchains as they wish and hold a transparent stake in the forthcoming governance of the main network.

The teams behind every parachain can modify, optimize, and work on their governance operability. They are also free to experiment, take on new ideas, or swap-in pre-made modules for swift integration. With the further updates of the ecosystem, we can expect to see more governance models and features available for parachains.

Technical Comittee

If you are wondering how the network looks for issues, bugs, and others, in the system and in the code, then that’s where the Technical Committee comes into play. This is its only purpose and takes no other part in the network. It also fast-tracks emergency upgrades and changes on the blockchain, without which the network will not be able to operate or will be susceptible to breach.

The Council plays a big part in the choice of teams within the Techincal Committee. They can add or remove the developers working on that part of the network by a majority vote.

Is Polkadot (DOT) A Worthy Investment

Polkadot is quite unique when it comes to the idea and solution it brings to the table. However, does that make it a worthy investment? There are many networks that offer a great idea and a solution, but the problem is usually not major. In these situations, projects like these are usually a hard pass. That’s not the case with Polkadot, as you might expect.

The problem Polkadot solves is quite a big one. Furthermore, scalability issues are only the surface of what the network can help polish. The infrastructure and the idea of interoperable blockchains are where the potential of the ecosystem lies.

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Of course, this is still not enough to make us consider becoming owners of the DOT token. But when we ponder Polkadot and its operability, we see that there are no direct competitors. Even more, the DOT token’s been part of the top 15 cryptocurrencies by market cap for a while now.

As of right now and with its current features, it is very easy to see why Polkadot is a good buy. However, if a project does not resonate with you or you do not fully understand how it operates, it can be a pass.

In conclusion, we expect to see the Polkadot be part of the dominating networks that will see huge adoption in the near future.

Price History

The price history of a cryptocurrency is quite important because it gives us a general idea of what to expect from the network in the future. It also helps us see whether the token is currently underperforming or not, or is it on discount. With that being said, let’s get right into the price history of DOT.

On launch, back in 2020, during the whole year, DOT was moving at around the $4-$5 range.

However, with the beginning of 2021 and the boom in popularity of the crypto market, DOT naturally went up. Up until May, it never for a second lost momentum, reaching $50 at one point. In late May, we saw the crash of the market, which was inevitable.

In late July, it once again began its bull run, reaching its current all-time high of $54 in November.

As you probably know, since mid-November, the crypto market began its bear cycle, meaning most cryptocurrencies lost a lot of value. Unfortunately, Polkadot is also part of these networks.

The ongoing political issues in eastern Europe also do not help the crypto market.

Because of all this, the current price of Polkadot revolves $16, which it last reached back at the beginning of August 2021. Some consider this a discount, making Polkadot coin a must-buy according to enthusiasts.

How & Where To Buy Polkadot (DOT) – In-depth

Time needed: 15 minutes.

Want to become an owner of Polkadot Coin but don’t know where and how to buy it? Follow these steps:

  1. Find a CEX that offers DOT.

    Before anything else, you will need to choose a crypto exchange platform that trades DOT. Since DOT is one of the most popular cryptocurrencies on the market, you can expect to be seeing it at nearly every CEX including Binance, Coinbase,KuCoin, FTX, eToro, and many others.

  2. Create an account.

    After choosing your CEX, create an account. This is usually quite simple as platforms are competing with each other which one will be easier to use. However, the tricky part here is that you will have to verify your identity through different means before you can start trading. This includes providing photos of your ID, card details, address details, etc.

  3. Fund your account.

    In order to add funds to your account, you will need to enter your card details. Once you’ve done that, you can select an amount to add. This will get you ready to purchase DOT instantly, whenever you decide. However, you can also directly purchase DOT, but depending on the congestion it can take some time.

  4. Buy DOT.

    Now that you have funds in your account, you can easily exchange them for DOT. You can either select the amount of fiat you wish to exchange for DOT or the amount of DOT you want to purchase and it will calculate how much fiat it will cost you. Once that’s done, you become an owner of DOT.

  5. (Optional) Transfer DOT.

    Although CEXs nowadays have integrated crypto wallets, some token owners prefer keeping their assets in third-party wallets. These can be either software wallets such as Metamask, Exodus, TrustWallet, etc., or hardware wallets such as Trezor, Ledger, Ngrave, etc.

How To Buy Polkadot (DOT) – eToro

where to buy polkadot button

If you are interested in becoming a DOT owner, we also suggest checking out eToro. It will take only 4 quick and easy steps that you need to follow in order to buy DOT through eToro

  1. Open an account – It is just as simple to open an account with eToro as it is with other major crypto exchange platforms. Of course, you will once again need to wait some time for eToro to verify your identity through the documents and photos you provide them with.
  2. Link a card to the account – Now that your identity’s been verified, you will need to link your card, which will allow you to move on to the next step.
  3. Add funds – This is just as easy as it sounds. After linking your card you will have the ability to add funds to your eToro account. It will only take a couple of seconds up to a couple of minutes before you see the funds in your balance.
  4. Buy DOT – There are two ways to do this, just as at every other exchange platform. You will have to choose the amount of DOT you wish to buy, or you will have to choose the amount of fiat you wish to exchange for DOT, which will then be calculated automatically. Once that’s done, you will become an owner of DOT. The integrated eToro wallet will ensure your asset is safe and secure.

Closing Thoughts

Polkadot is definitely a unique network that deserves all the attention it gets. It is possible that we will be seeing it grow even more in the future, as it offers ideas and solutions that no other network does. In this article, we went not only through “where & how to buy Polkadot coin”, but also got to know how the network exactly operates and what it is so valuable.

Whenever you are looking at a crypto network, it is important to also DYOR and go through the white papers. However, we always make sure to include all necessary information to either spark your interest or help you understand it better.

Whether or not you will invest and buy Polkadot coins, we suggest keeping a close eye on the network, as it definitely will stick around for quite a while.

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