Polkadot is an open-source sharding multichain protocol that facilitates the cross-chain transfer of any data or asset types, not just tokens, thereby making a wide range of blockchains interoperable with each other. This interoperability seeks to establish a fully decentralized and private web, controlled by its users, and simplify the creation of new applications, institutions and services.
How to Buy Polkadot Summary
- Get a Polkadot-compatible wallet (Ledger), and locate your DOT address.
- Sign up to Binance or CEX.io.
- Buy DOT with deposited fiat, crypto, or a bank card.
- Withdraw your DOT tokens to your wallet
That’s the basics of how to buy Polkadot! For a more detailed review and a step-by-step guide, keep on reading below. I’ll be covering:
1.What is Polkadot?
Polkadot is a network designed to join the dots with all other networks. It’s commonly referred to as a multi-chain network, because it can join networks together, unlike networks like Bitcoin, which operates on its own.
Its ultimate aim is to act as a framework for all blockchains that opt-in, a bit like how HTML allows sites, browsers, and servers to interact with each other. The idea is to take care of messy and costly cryptocurrency mining processes (including validation of transactions and security protocols) and enable developers to focus on creating dapp and smart contract functionality.
Developers building innovative, decentralized systems currently have to engineer these systems from the ground up. This also means that time, talent and resources are diverted into building competing networks, rather than creating a standard everyone builds off. That’s Polkadot’s aim, to create a way for developers to build value on top of all blockchains, rather than just one.
What is Polkadot’s DOT token used for
The DOT token serves three distinct purposes: governance over the network, staking and bonding.
Polkadot token holders have complete control over the protocol. All privileges, which on other platforms are exclusive to miners, will be given to the Relay Chain participants (DOT holders), including managing exceptional events such as protocol upgrades and fixes.
Game theory incentivizes token holders to behave in honest ways. Good actors are rewarded by this mechanism whilst bad actors will lose their stake in the network. This ensures the network stays secure.
New parachains are added by bonding tokens. Outdated or non-useful parachains are removed by removing bonded tokens. This is a form of proof of stake.
2. How to buy Polkadot
Step 1: Get a Polkadot-compatible wallet
Polkadot Hardware Wallets
As with any other cryptocurrency asset, the safest way to store DOT is by using a hardware wallet. Hardware wallets are physical devices which keep your private keys stored safely offline. As long as you’re holding your hardware wallet, nobody will be able to access your funds remotely via an internet connection.
Ledger hardware wallets — These support a huge variety of cryptocurrency assets, including DOT. There are two main models you can choose from — the Nano X and its predecessor, the Nano S.
The main difference between the two models is that Nano X allows you to control your wallet using your mobile phone, as well as your laptop.
Currently, if you want to store DOT on your Ledger device you’ll need to install the Polkadot Ledger app, which is used in conjunction with the official Polkadot-JS web wallet mentioned below.
Polkadot Software Wallets
Exodus Wallet was co-founded in 2015 by JP Richardson and Daniel Castagnoli in an effort to remove the geek requirement associated with cryptocurrency. They emphasized on creating a beautiful user interface to achieve a simple experience while exchanging digital assets.
Exodus offers free downloadable desktop and mobile versions of their cryptocurrency wallet, while also having hardware wallet compatibility with the Trezor One and Trezor Model T. By providing a built in exchange and being one of the only software wallets that offers hardware wallet compatibility, Exodus Wallet has been well-received by many in the crypto community.
Atomic Wallet was designed to leverage the potential of atomic swaps and become part of a fully-fledged decentralised cryptocurrency ecosystem. Atomic swaps allow users to trade cryptocurrencies from within their wallet — similar to an exchange, but using different technology. Atomic Wallet supports over 500 coins and tokens, as well as staking for certain coins.
Polkadot-JS — The official Polkadot web wallet, which works from within your internet browser. The wallet allows you to send, receive and store DOT, as well as participate in the Polkadot ecosystem by staking, voting and more. Polkadot-JS also lets you connect to your Ledger hardware wallet, if you have the Polkadot Ledger app.
Locate Your DOT Address
Once you have prepared your DOT wallet, you’ll need to locate your new DOT address. This will be a random string of numbers and letters, which begins with “1”.
Here is an example of what it should look like: 12dzXqnwvD3ataYMvsPJFvahLY3MdH5HS6gB97Na9Qh73Ekb
Step 2: Find a DOT Exchange
Buy Polkadot using Binance
Binance Exchange continues to be one of the top cryptocurrency exchanges in the world by offering users the most cryptocurrency trading pairs of any trusted exchange, resulting in Binance having the highest trading volume of any crypto exchange. Founded in 2017 by Changpeng Zhao, Binance quickly became a leading cryptocurrency exchange and has its own crypto called Binance Coin. Binance offers users ways to purchase crypto assets directly using fiat currencies or a credit card. Binance can be accessed through its website, desktop, or mobile app.
Buy Polkadot using CEX.io
CEX.IO provides a trading platform where users can buy Polkadot, Bitcoin and other digital currencies using diverse payment methods in a few quick steps. In addition, CEX.IO offers brokerage services that facilitate cryptocurrency margin trading so traders have the choice to maximise their potential wins and losses.
Buy Polkadot using Kraken
Kraken is a reputable cryptocurrency exchange that’s been around for almost a decade. It’s a solid option with a lot going for it.
Founded in 2011 and launched in 2013, Kraken is one of the largest and oldest exchanges in the world. And it’s had its eyes on security from day one. The fact that it hasn’t been hacked in eight years speaks for itself.
The U.S.-based exchange has consistently led the industry in security. It boasts both physical security and financial stability. Plus, it pushes users towards healthy security habits.
Step 3: Withdrawing your DOT Tokens
Navigate to your DOT account balance page on the exchange, and select “withdraw”. Copy and paste your new wallet address (from Step 1 above) into the withdrawal address field. Once this is complete, you’ll have full control over your DOT tokens. They’ll be out of the hands of the exchange, and well away from any online hackers.
Polkadot is rapidly gathering attention as the Ethereum network continues to battle high traffic and overly expensive transaction fees.