Decided Polkadot is a good investment? You can get Polkadot on Coinbase.
Polkadot (DOT) is a technology that is aiming to connect multiple blockchains. 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 has a market capitalization of just under $27 billion and nearly 1 billion tokens in circulation. It saw highs of nearly $50 in May 2021 and lows of $10 in January 2021. It currently is the 9th most popular crypto, beating hugely hyped tokens such as Dogecoin and Litecoin.
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 over 250 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.
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.
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
September 2021 has shown a great deal of volatility in the cryptocurrency world. Polkadot competitors, such as Ethereum and Cardano have approached all-time highs but also saw drops of over 30%. DOT is up 5% on the month at the time of writing and is up 500% on the year.
Prices are changing every day, and nobody knows where prices will go. While some say we may be entering a bear market, others view this as a minor setback. Either way, the increased volatility is defining the current market.
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.
Benzinga crafted a specific methodology to rank cryptocurrency exchanges and tools. We prioritized platforms based on offerings, pricing and promotions, customer service, mobile app, user experience and benefits, and security. To see a comprehensive breakdown of our methodology, please visit see our Cryptocurrency Methodology page.
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