By: Alex Miguel | Last update: 3/12/21
Polkadot (DOT) is the native token of the Polkadot network, a blockchain platform with which something competes ether. Polkadot is highly scalable and customizable. The goal is to be the mother of all blockchains by supporting interoperability between different blockchains.
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How to Buy Polkadot Summary
- Get a Polkadot Compatible Wallet (Ledger, Crypto.com) and find your DOT address.
- Register for Binance or CEX.io.
- Buy DOT with deposited fiat, crypto or a bank card.
- Pull your DOT tokens into your wallet
Those are the basics of buying polkadot! Read below for a more detailed overview and step-by-step guide. I will cover:
- What is polkadot?
- Buying Polkadot in 3 steps
1. What is polkadot?
Before talking about DOT tokens, it is important to understand what the Polkadot Network is.
In short – polkadot is a blockchain Platform similar to Ethereum. It is designed to run decentralized applications, also known as dApps, at high speed. The main difference from Polkadot is that the technology is not just a single blockchain, but allows a network of multiple custom chains with different characteristics to communicate with each other and form the Polkadot network. In her own words, Polkadot unites “a whole network of different blockchains in a single ecosystem”.
What is Polkadot’s DOT token used for?
DOT is the home currency of the Polkadot network. It has three main functions:
DOT owners can get involved in controlling the platform by voting on suggestions for things like network charges, adding new chains (called parachutes), and other network upgrades.
The Polkadot network is secured using a locking mechanism. Users deploy DOT tokens to keep the network going and are rewarded (or penalized!) With DOT to ensure that the transactions they are processing are valid.
The Polkadot network is made up of several custom chains called parachutes. To add a new parachute to the network, DOT tokens must be locked in a process called “bonding”.
Delivery and distribution of DOT tokens
At the time of writing, there are more than 1,000,000,000 (1 billion) DOT tokens in circulation. Inflation is expected to start at 10% in the first year, but this rate may change in the future.
About 58% of the original DOT token offering was given to investors involved in the token sale, while 30% was given to the Web 3 Foundation for development and other activities. Almost 12% was saved for future fundraising campaigns.
2. How do I buy polkadot?
Step 1: Get a Polkadot Compatible Wallet
Desktop & Mobile
Assuming you want to buy and hold DOT for the long term, it is important that you have a compatible wallet to store DOT in.
Many large wallets have yet to incorporate Polkadot, but it is likely that we will see many more DOT compatible wallets in the near future.
Polkadot Hardware Wallets
As with any other cryptocurrency asset, the most secure way of storing DOT is to use a hardware wallet. Hardware wallets are physical devices that are used to securely store your private keys offline. As long as you have your hardware wallet in hand, no one can access your money remotely over an internet connection.
Ledger hardware wallets – These support a wide variety of cryptocurrency assets, including DOT. There are two main models to choose from – the Nano X. and its predecessor, the Nano S.. The main difference between the two models is that the Nano X allows you to control your wallet with both your mobile phone and your laptop.
Currently, if you want to store DOT on your Ledger device, you need to install that Polkadot Ledger Appused in conjunction with the official Polkadot JS wallet mentioned below.
You can read my Ledger Nano X review here.
Polkadot software wallets
Exodus – A multi-blockchain wallet with a great user interface. It supports over 100 cryptocurrencies and tokens, including polkadot, and has been downloaded more than 4 million times. Exodus also has a built-in exchange that allows users to switch between supported assets.
Atomic wallet – A hugely popular wallet that allows atom swaps, a special decentralized way to trade between blockchains. Atomic Wallet also allows users to buy crypto in the app, deploy their assets and much more. It supports more than 500 assets including DOT.
Appearance – A non-custody wallet that supports DOT and 45+ other blockchains. Guarda is available on mobile and desktop, with the added option of a web wallet accessible through an internet browser. The wallet has a handy feature for customizable fees as well as an integrated exchange.
Polkadot-JS – The official Polkadot wallet that works through your internet browser. The wallet allows you to send, receive and store DOT, as well as participate in the Polkadot ecosystem through staking, voting and more. Polkadot-JS also allows you to connect to your Ledger hardware wallet if you have the Polkadot Ledger app.
Find your DOT address
Now that you’ve prepared your DOT wallet, you’ll need to find your new DOT address. This is a random sequence of numbers and letters that starts with “1”.
Here is an example of what it should look like: 1FRMM8PEiWXYax7rpS6X4XZX1aAAxSWx1CrKTyrVYhV24fg
Step 2: find a DOT exchange
Credit / Debit Card, Crypto
Credit / Debit Card, SEPA, Wire Transfer
Wire, crypto, SEPA
Buy polkadot with Binance
Binance is one of the largest cryptocurrency exchanges in the world. You can buy DOT by depositing one of the Binance-supported cryptocurrencies and exchanging them for DOT, or you can buy them instantly with a bank card. Alternatively, you can deposit supported fiat currencies via bank transfer and purchase DOT with your cash balance. There are higher fees for purchases with bank cards, which should be considered before purchasing.
You can read my full review of Binance here.
Buy polkadot with CEX.io
CEX.io was founded in London in 2013. CEX.io has numerous deposit methods for fiat currencies, including bank cards, bank transfers and ACH. You can buy DOT after making a deposit using one of the methods above, or just make an instant purchase using a credit card.
Read My full CEX.io review here.
Buy polkadot with octopuses
octopus is one of the oldest cryptocurrency exchanges that still exist today. It was founded in 2011. You can buy DOT from Kraken after depositing fiat currencies with SWIFT, SEPA, or other bank transfer methods. Alternatively, you can deposit any supported cryptocurrency.
You can read my review of octopuses here.
Step 3: Withdraw your DOT token
After you’ve bought your DOT tokens, you’ll want to protect them by dragging them into your own wallet.
Navigate to your DOT 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 done, you will have full control of your DOT tokens. You are out of the hand of sharing and a far cry from online hackers.
Polkadot is quickly gaining attention as the Ethereum network continues to struggle with heavy traffic and excessively expensive transaction fees.
Polkadot presents itself as a worthy competitor and has reached the fourth largest cryptocurrency by market capitalization – and may not stop there.
What is your opinion on polkadot? Let me know your thoughts in the comments below!
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