North Dakota might sound like an unlikely name to pop up among the states that have given cryptocurrencies and blockchain technology the green light, but that’s just the case here. In 2019, the Governor signed H.B. 1045 into law, which allowed the integration of blockchain technology, electronic signatures, and smart contracts into everyday business transactions, thus paving the way for the full inclusion of cryptos in the state.
Some 800,000 residents of North Dakota are now seeing crypto ATMs across the state, and cities like Williston accept cryptocurrencies for bill payments. One of the primary beneficiaries of such a lenient attitude towards cryptos is Polkadot.
Since Peace Garden State residents can buy, sell, and trade cryptos, including Polkadot, without any legal obstacles, we have come up with this guide to tell you how to get your Polkadot (DOT) how it works, and more, so stay tuned.
Polkadot (DOT) in a Nutshell
To fully understand the potential of Polkadot and its importance for users in North Dakota, we need to see it for what it is — far more than just a token. It is, in fact, a blockchain-based decentralized protocol that allows other unique blockchain projects to communicate with each other in a secure environment. As a result, these individual blockchains can exchange information under common security guarantees, no matter if they are public or private consortium chains.
For example, companies can build applications that receive permissioned data from a private blockchain to use on a public blockchain.
Thanks to this incredible scalability and interoperability, Polkadot can work towards realizing the dream of creating Web3, a fully decentralized internet network.
It is precisely that kind of ambition that helped Polkadot raise roughly $200 million from investors, making it one of the best-funded blockchain projects in the world, despite it being founded just recently, in 2020.
Polkadot Technical Features
The genuinely innovative technology behind Polkadot gave the project the support it needed to stand out in the market. First, we need to mention that Polkadot was created to run two types of blockchains — the Relay Chain and parachains.
The Relay Chain is the network providing security and interoperability between all other blockchains. Parachains are user-created networks of blockchains exchanging information amongst themselves, running independently within the Polkadot’s Relay Chain. These parachains benefit from the security of the main chain and the ability to scale much better than they would on other blockchain-based services.
The network uses the so-called bridges to connect parachains with blockchains outside Polkadot that do not rely on its governance protocols.
In Polkadot’s technical structure, parathreads contribute to the network’s overall security, together with parachains.
How the Polkadot (DOT) Token Works
Polkadot’s native currency is DOT. However, it’s more than just a digital currency you can buy and sell. It is a utility token that you can stake on the network and earn passive income from. Let’s elaborate on that a bit.
Polkadot uses the so-called Nominated Proof-of-Stake mechanism instead of the Proof-of-Work system that Bitcoin uses to verify transactions, secure the network, and create new DOT. With Bitcoin, for example, all participants are validators of transactions, whereas, with Polkadot, there are several roles stakeholders can assume and perform. These include:
- Validators — Their role is to validate data found in parachains. They can add new blocks to the chains and verify all the transactions. To qualify for the role of a validator and reap the best rewards, you must have a sizable amount of DOT and a lot of knowledge of how DOT operates.
- Nominators — Nominators are there to provide security to the Relay Chain by selecting the validators and delegating DOT tokens. According to the performance of the validators and the amount of DOT entrusted to them, nominators receive their rewards.
- Collators — Collators are there to collect data on the performance of parachains and their transactions and aggregate the data into blocks that are added to the main chain.
- Fishermen — A fisherman’s role is to monitor the entire Polkadot network, report any transaction breaches, and report back to validators.
Where to Buy Polkadot in North Dakota?
There are two ways to acquire DOT in North Dakota. One is through centralized cryptocurrency exchanges, which most North Dakotans use. The other is directly from another person willing to sell. We’ll proceed with the former option, given its regulated status.
Centralized Cryptocurrency Exchanges
Centralized cryptocurrency exchanges can be seen as official trading platforms established and functioning under the laws of North Dakota, which means they have all the required licenses to offer their services. These platforms perform identity and security checks; every transaction is perfectly safe and lawful.
There are also decentralized exchanges, which operate much like the cryptocurrencies trading on them. No central authority controls and oversees them, and the users are not prompted to share any personal information to enjoy their services. These are more difficult to find, which is not a bad thing altogether, given the security risks they pose.
Let’s focus more on the centralized currency exchanges and what you need to know before choosing one.
- North Dakota availability — You need to check whether the exchange is available in North Dakota.
- Supported cryptos — Apart from the legality and availability of the platform, you need to see if Polkadot (DOT) is one of the cryptocurrencies available on the exchange.
- Reputation — Reputation is a vital component of any exchange. Ask around the web to see if the users are generally happy with it. If so, proceed with the registration.
- Security — Every decent exchange needs to have security measures to protect the customers’ sensitive data and transactions from unwanted third-party access and cyber-attacks.
- User interface — Crypto exchanges should be easy to navigate and browse, and those that aren’t should not even be considered. You want a smooth experience and a platform with all the necessary features to support your transactions.
- Privacy — Some platforms have more rigid KYC policies than others. You probably won’t be able to buy, sell, or trade DOT before verifying your account, so make sure to check the fine print before opting for an exchange.
- Fees — Crypto exchanges make their daily bread off of the fees they charge for their services. Some charge more than others, so that’s another aspect to consider before joining a platform.
- Payment methods — The list of payment methods an exchange supports is crucial, especially if you want to buy DOT with fiat money. The more methods are listed, the better.
Buying Polkadot Directly in North Dakota
The second option for buying Polkadot is a direct purchase from a user willing to sell. This way, there are no intermediaries, no service fees, and the price can be a matter of agreement.
While this all may sound fine and dandy, it’s anything but. You can easily get conned as there are no mechanisms to make the other person honor the agreement, making this a highly unsafe way of procuring DOT.
Step-by-Step Guide to Buying Polkadot in North Dakota
Even if you are entirely new to cryptocurrencies, the following step-by-step guide will tell you all you need to know to get your first DOT.
- Pick an exchange — Choose one of the exchanges available in North Dakota.
- Set up a Polkadot wallet —You need a digital wallet to store your Polkadot tokens, so make sure to create one before you purchase DOT.
- Register an account on the exchange — Once you have picked an exchange, you’ll need to complete the registration procedure to become an active member.
- Make a deposit — Deposit some fiat money to the exchange so that you can purchase Polkadot.
- Buy DOT — Simply input the amount of DOT you want to buy and confirm the transaction.
- Withdraw your funds from the exchange to your wallet — When you get your hands on some Polkadot, transfer it to your crypto wallet just to be on the safe side.
It takes virtually zero effort to buy Polkadot in North Dakota. One account registration, and a couple of minutes later, you can have your first Polkadot.
It is a cryptocurrency constantly ranked among the top twenty cryptos in the world, whose value has been rather stable as of late, with a clear tendency to increase. Just make sure to choose the right cryptocurrency exchange platform, and you’ll be good to go.