Different states deal with the concept of cryptocurrencies in various ways. While some of them have passed laws and regulations regarding this industry, others remain reticent. The state of Illinois holds a positive stance toward them.
With a desire to learn how it could benefit from this crypto transition, the Illinois legislature empaneled a Blockchain Task Force in February 2017. The Illinois Department of Financial and Professional Regulation has issued a guide on the implementation of the state’s Transmitters of Money Act to those dealing with cryptocurrencies. According to this guide, digital currencies are not observed as money. Therefore, those who want to trade, sell, or buy Polkadot and other cryptocurrencies are not required to obtain a TOMA license.
In this article, we’ll introduce you to the concept of the Polkadot platform, discuss its current worth, and suggest how to purchase it and become its proud owner in Illinois.
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Polkadot has quickly become one of the most popular cryptocurrencies in the crypto universe, which consists of around 4,000 cryptos. The DOT token, the native token of the platform, is ranked among the top 10 cryptos by market capitalization, just like ETH or Solana.
Polkadot was developed by Web3 Foundation and Parity Technologies. Gavin Wood, Ethereum’s co-founder, is behind this cryptocurrency, as well. Ever since its launch in May 2020, its rise in popularity has been remarkable.
Polkadot is more than just a cryptocurrency. It is a protocol that enables transfers of any type of data or asset across blockchains. Not only does it allow users to build blockchains easily through the Substrate framework, but it also hosts blockchains and handles their security and transactions. Moreover, the Polkadot network connects blockchains with other networks, such as ETH or BTC.
Polkadot aims to solve problems some of the most prominent blockchains are facing, including:
- Interoperability — Its network allows any assets or data — not just tokens — to be transferred. Additionally, it supports 1,000 transactions per second.
- Scalability — The Polkadot network comes with a set of validators that allow the platform to interact with various other blockchains.
- Better security — Polkatod allows individual chains to interact with each other. These chains, called parachains, still remain independent and run their own governance models.
- Removing forks — By fixing bugs and integrating new features, Polkadot eliminates the need for forks, as they are the ones causing split-up communities (like with BTC and ETH).
- Promoting innovation — Its Substrate framework facilitates creating new blockchains. It is possible to build projects on it the same way you would build them on Polkadot. However, you can also develop them on Substrate alone.
Polkadot’s hybrid consensus mechanism on the Relay Chain is a Proof of Stake (PoS) version. It is called GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement). Parachains attached to this Relay Chains utilize the BABE (Blind Assignment for Blockchain Extension) version of Proof of Work. This hybrid consensus consists of four main components that DOT owners can take over if they want to.
- Validators: Validators produce Relay Chain blocks and check transactions of parachains. They are assigned randomly to the parachains they are checking. Validators stake DOT to be eligible for nomination. This is why this consensus is also called Nominated Proof of Stake.
- Collators: They ensure security on a parachain by monitoring transactions and sending proof to validators.
- Nominators: Nominators’ task is to select validators. Subsequently, validators receive rewards for adding new blocks and validating. Then, they share some of the rewards back with nominators.
- Fishermen: Fishermen are tasked to monitor and report validators’ bad behavior. They receive DOT as a reward for constantly detecting these misbehaviors.
Polkadot Current Worth
In Polkadot’s first initial coin offering (ICO), the DOT price was $0.29, and 2.24 million tokens were offered. In July 2020, Polkadot held its second ICO, and DOT was offered at the price of $1.25, with 342,080 DOT tokens sold.
Soon after, in August 2020, Polkadot underwent redenomination, and the DOT balances were increased by a factor of 100. This turned the initial DOT supply of 10 million into 1 billion tokens.
Currently, the DOT coin is worth around $15 and ranks 13th according to CoinMarket Cap. Its circulating supply is over $987 million, whereas the live market cap exceeds $15 billion.
Why You Should Buy Polkadot
Polkadot may not be able to dethrone BTC any time soon, but it certainly is a threat to other high-ranking cryptocurrencies. It ticks all the essential boxes — its visionary co-founder, Gavin Wood, notable partners, large market cap, and transaction speeds. The list goes on.
By creating blockchains within blockchains, this new technology is gaining investors’ attention on a global scale. On top of that, it is more affordable than some of its competitors. In August 2020, its value was $2.69. In December of that year, its values catapulted, and on February 20, 2021, it reached $39.24. Its scalable business model is what makes Polkadot a head-turner.
Polkadot has been designed to reward the DOT holders. They have governance over the entire platform. Moreover, they have voting rights, including creating new parachains and network fees and upgrades. On the other hand, the DOT coin is volatile, just like other crypto coins, and its value constantly fluctuates. If you are a risk-taker, your investment may pay off big in the long run, but it could also go bust. That is why we always suggest conducting your own research before making any investments.
Where Can I Buy Polkadot in Illinois?
Since the state of Illinois doesn’t require you to own a money transmitting license, people who want to purchase the DOT coins can do it via a reliable centralized cryptocurrency exchange or directly from another owner. We’ll explain both in greater detail.
Centralized Cryptocurrency Exchanges
Centralized cryptocurrency exchanges are platforms that allow you to trade cryptocurrencies for other assets, including fiat and digital currencies. Simply put, they are mediators between the buyer and the seller. They provide more reliability since they are controlled by companies responsible for the holdings of their users.
People from Illinois can purchase and trade the DOT tokens on a number of popular cryptocurrency exchange platforms. Some of the prominent ones include Coinbas, Kraken, GDAX, and Gemini.
Even though there are plenty of exchanges in the crypto universe, not all of them are available to Illinois users. So, you should always make sure to check the following aspects when choosing an exchange:
- Availability in Illinois: You cannot assume a particular exchange is available in your state simply by glancing at its website. Make sure you are allowed to use it in Illinois from a legal standpoint.
- Safety and security: Exchanges offer that extra layer of protection by utilizing the latest security protocols. However, there is no system immune to hackers’ attacks, so make sure to check their previous experiences regarding this issue.
- Supported tokens: Consider all the available cryptocurrencies on a chosen exchange and make sure Polkadot is among them.
- List of banking options: You need to check the list of payment methods a particular exchange offers. Many exchanges usually feature debit/credit cards, bank transfers, and cryptocurrencies. Since you need to fund your account with fiat currency and then exchange it for crypto, check if your preferable paying method is available.
- Fees and limits: Exchanges impose different fees for their services. Transaction and conversion fees differ from one exchange to another and depend on trading amounts. Since you can’t avoid them, make sure to choose the one with the fees that are within your budget.
- Liquidity: Considering that the availability of coins is not sufficient on every exchange, you should find the one with a high trading volume. If you don’t want to end up buying tokens at a higher price and selling them for less, make sure there is enough trading volume in the DOT tokens, which would guarantee liquidity.
- Reputation: Trustworthiness and reliability are essential factors when choosing an exchange. So, prior to settling on one, find out if other people recommend it or not.
Aside from cryptocurrency exchanges, you can purchase the DOT tokens directly from a person willing to sell them. This may look quicker — plus, you won’t have to go through the verification process.
However, it is riskier. The person you are buying from might easily turn out to be a scammer, and you might lose the coins for being reckless. So, if you opt to go the direct way, we advise you to find a person you can hold accountable.
Step-By-Step Guide to Buying DOT in Illinois
The process of buying the DOT coins via a centralized crypto exchange is quite simple. We’ve created a step-by-step guide that will help you become a DOT owner this way:
- Get a Polkadot wallet: You need a wallet, as that is the place where you can store your tokens safely. Go to Polkadot’s official website and select one of the supporting wallets.
- Choose an exchange: Pick a platform that suits your needs and preferences — of course, don’t forget to make sure it is available in Illinois. Feel free to check out the ones we recommend.
- Create an account: Submit all the necessary documents and complete the verification process.
- Make a deposit: Top up your account with the desired amount of money you want to exchange for the DOT tokens. Keep in mind the transaction and conversion fees.
- Buy DOT: Purchase the number of coins you have had in mind and wait for the transaction to go through. Once the coins appear in your account, transfer and stake them in your wallet.
Polkadot has been steadily improving in all aspects. Its developers plan to continue this expansion and take the ecosystem to the next level. Many experts consider it one of the most promising and well-thought-out projects in the crypto realm.
We hope this guide has helped you gain a deeper understanding of Polkadot and its potential. If you are looking into investing in it, we suggest educating yourself further and following the latest trends and news.