Despite the lack of official provisions in New Mexico’s money services business regulations, the New Mexico Regulation and Licensing Department considers the dealing of virtual currency a license-required activity. Moreover, the state’s Department of Regulation and Licensing has mandated that those who exchange virtual currency, money, or any other form of monetary or stored value need to be licensed as money transmitters.
New Mexico has been known as a crypto-friendly state, and its residents can freely buy, sell, and trade cryptocurrencies, including Polkadot. Furthermore, many state leaders are advocating for lawmakers to pass favorable crypto legislation to stimulate the economy and attract investments.
If you are interested in the Polkadot cryptocurrency, you have come to the right place. We’ll discuss its essential details and tell you where you can obtain the DOT coins. Once you understand what this coin is all about, you will be able to decide whether it is a good investment.
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Polkadot (DOT) Explained
The Polkadot project was developed by Gavin Wood, Ethereum’s co-founder and CTO, Peter Czaban, the Web3 Foundation CTO, and Robert Habermeyer, a researcher and developer of blockchain technology.
In a nutshell, Polkadot is a technology that makes different blockchains interoperable by connecting them into one multi-blockchain network. Its native cryptocurrency is called Polkadot or DOT. The Polkadot platform allows for the creation of new blockchains and connection of existing ones. With it, blockchains can process and transfer data quickly and securely without requiring system-wide updates or hard forks.
Polkadot’s ultimate goal is to let websites, browsers, and servers communicate with one another through a kind of framework for all blockchains. By combining public and private blockchains, Polkadot can transfer data across both.
Here is what Polkadot consists of:
- The Relay Chain — This core chain is responsible for security and interoperability while also allowing the creation of new chains.
- Parachains — These are blockchains that operate independently of the Relay Chain.
- Parathreads — Parathreads are blockchains that users can lease.
- Bridges — Bridges enable the connection of Polkadot to other blockchains and allow communication with external chains.
It is possible to disable Polkadot parachains that are defective. Polkadot’s unified security system cannot be accessed by parachains that leave the Polkadot network. Its ecosystem is protected by the Nominated Proof-of-Stake (NPoS). There are four groups involved in maintaining the NPoS protocol — nominators, validators, collaterals, and fishermen.
DOT in Numbers
Cryptocurrency mining is not available on Polkadot.
At the beginning of the project, there were 10 million DOTs issued. However, by August 2020, a redenomination took place — the coins were increased to 1 billion in order to facilitate the transaction calculations. The coins in users’ wallets were multiplied by 100, thus converting 0.01 DOT into 1 DOT. This resulted in a significant increase in coins, but token holders did not lose anything due to inflation.
Within a couple of weeks of the redenomination, the token’s price rose from $2.76 to $6. In November 2021, DOT reached its all-time-high value of $53.88.
Currently (as of March 2022), the DOT’s value is around $19, and it is ranked 11th according to CoinMarket Cap.
Why Invest in Polkadot?
Polkadot has experienced some growth in recent years, and it seems to be a good investment. However, keep in mind that there are no clear-cut reasons why you should invest in any digital currency. It is a volatile market that can be profitable or cause losses. Ultimately, you have to do your research and make an informed decision.
Still, we will offer you a few reasons why you might want to invest in the DOT coin:
- Polkadot solves interoperability problems — In comparison to other blockchain platforms, the Polkadot protocol is unique. Other blockchain projects have been facing interoperability issues, and they’ve been forced to create bridges that would allow them to connect with each other. However, that increases transaction costs. Due to its ability to solve this problem, Polkadot is gaining popularity with investors and users alike. Protocols like this allow communication between public and private networks at no additional cost. With this protocol, any asset, data, or token can be transferred between the networks. By addressing this issue, Polkadot has seen its popularity and value rise. Its interoperability meets the needs of more users, which makes it worth the investment.
- DOT tokens have high liquidity — Coin liquidity is crucial, and Polkadot has recorded more than $690 billion in trading volume during the last 24 hours (as of March 2022). Such numbers indicate significant demand for this coin in the crypto market. It will be easy for you to sell it, whether you plan to keep it long or short term.
- Polkadot enables customization — Each blockchain has its own functionalities, and none of them offers everything. Thanks to the Polkadot Substrate framework, different blockchains can operate on the same platform and customize their own platforms. Due to this simplification, Polkadot can provide more projects on its platform, which will continue to attract more developers, users, and investors. Plus, Polkadot’s value increases as the community grows.
Where to Buy Polkadot in New Mexico
The people from New Mexico have the same number of crypto options as the residents of other states. There are two choices available — reliable exchange platforms or direct purchases.
To ensure a secure and trustworthy transaction, we recommend using the first method, which we will explain below. Even though the latter is an option as well, you should avoid it if possible.
Centralized Cryptocurrency Exchanges
Centralized cryptocurrency exchanges are platforms that allow you to buy or sell digital assets. The buyer and seller must rely on a third party to monitor the transaction and secure the assets. Blockchain doesn’t record these deals. In such exchanges, you must provide your personal details for verification.
You can increase your withdrawal quota by providing more information to these platforms. In case of technical problems or in the event they lose their password, verified users can contact the support team. Typically, centralized crypto exchanges offer their verified users stable prices for flat pairs.
Decentralized cryptocurrency exchanges are also worth mentioning. They are similar to centralized ones, except for the lack of a third party. On this exchange, all funds remain on the blockchain. Platforms like these allow peer-to-peer trading, which uses assets, proxy tokens, or escrow systems, as opposed to the IOU-based system used by a centralized crypto exchange.
There are several well-known centralized Polkadot exchanges, including Coinbase, Gemini, Binance, and Kraken. Despite the wide range of options at your disposal, it is important to know how to pick the right centralized exchange. Take these factors into account:
- Availability in New Mexico — Most major US exchanges are available in New Mexico, but it is necessary to double-check since some may not operate there.
- Accepted cryptocurrencies — It is essential to look at each exchange’s asset selection. You’ll most likely find the major cryptos everywhere, but Polkadot or some smaller tokens may not be available. Therefore, knowing what options each exchange offers is crucial.
- User Interface — Easy platform navigation is a must, whether you are a beginner or a crypto fiend. Because of this, you should opt for an exchange that’s simple to use and doesn’t take a lot of time to complete simple DOT trades.
- Reputation — Knowing each exchange’s reputation is crucial. You should conduct your own research by looking them up on Google and social media. This will help you evaluate them and see if any complaints have been posted.
- Security — Exchanges may be safe, but they are not immune to security breaches and hacker attacks. When choosing one, make sure it offers two-factor authentication (2FA). Also, check whether all security protocols are in place. Moreover, a multi-signature wallet and cold storage are essential features to look for on an exchange.
- Liquidity — The number of participants and the amount of assets being traded determines the liquidity of each trading platform. Your chosen exchange must be liquid enough to allow you to buy and sell DOT at any time.
- Fees and limits — Most exchanges charge a small transaction fee for every trade made. Fees vary from platform to platform and are typically based on a percentage of each trade. Some exchanges also impose withdrawal fees and daily/monthly limits. Make sure you are aware of all potential costs before making a purchase.
- Payment methods — Exchanges offer various fiat payment options. Some are compatible with specific banks, while others aren’t. It might be necessary to check what banks the exchanges work with, as well as what kinds of fiat currencies they accept.
As we have already mentioned, it is also possible to buy Polkadot from another person. This may sound great since no fees will be charged, no third parties will be involved, and you will negotiate the limits.
However, it isn’t the most reliable way to get DOT since you never know whether the person on the other end has good intentions. Ideally, you should find someone you trust or make an agreement before attempting this transaction method.
How to Buy Polkadot: Step-by-Step Guide
If you are new to the crypto world, the process of buying the DOT coins might feel intimidating. But don’t worry — we’ve got you covered. We’ve compiled a list of steps to follow that will facilitate the entire process.
Here’s how you can purchase Polkadot in New Mexico via a centralized exchange:
- Set up a wallet — As a DOT holder, you’ll need a wallet to store your tokens. You can leave them on the exchange, but it is safer to transfer them. Go to the chosen wallet’s official website and check if Polkadot is supported.
- Pick an exchange — You can select one of the reputable exchanges we’ve recommended earlier or find the one that you like. Either way, choose the one that supports DOT coins and covers all the aspects we have discussed previously.
- Visit the website and register — Head to the exchange’s official website, follow the instructions, provide the necessary information, and verify your account.
- Make a deposit – To purchase Polkadot, you will have to deposit enough USD into your account using one of the available payment options.
- Buy DOT — Find a USD to DOT trading pair, buy the desired number of tokens, and complete the purchase.
- Transfer DOT to your wallet – After receiving your tokens, you can trade them on the exchange. Nonetheless, since your wallet is much safer than the exchange, it’s best to withdraw them there if you intend to store them long-term.
As you can see, purchasing the DOT tokens in New Mexico is a breeze whether you are a complete beginner or an experienced buyer. You just have to find the right exchange or DOT holder to perform the trade.
Although we have already explained that Polkadot is a technology with fast-growing potential recognized by many companies, we always suggest getting familiar with how Polkadot and cryptocurrencies work. It’s best to do your own research and learn more about it if you’re a beginner. Once you’re ready to invest, choose any of the recommended crypto exchanges, and you’ll be up and running in no time.