Polkadot has become one of the most popular new cryptocurrencies on the market. Its mission and potential to revolutionize the crypto space have quickly drawn the investors’ attention. Crypto enthusiasts all over the world, including those from Pennsylvania, have started taking part in this innovative endeavor.
If you’ve been thinking about investing in this popular crypto, you’re in the right place. The article will explore Polkadot in more detail and reveal how and where you can buy DOT in Pennsylvania.
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What Is Polkadot?
Polkadot is an open-source project that seeks to create and use a global network of computers to operate a large blockchain that can be linked to other blockchains. It aims to build a unique ecosystem that will allow for complete blockchain interoperability and change the face of the crypto industry.
Polkadot was built by Gavin Wood, Robert Habermeier, and Peter Czaban in 2016. The Web3 Foundation, a Swiss non-profit organization, founded Polkadot intending to leverage blockchain technology and construct a completely decentralized network — Web3.
How Does Polkadot Function?
Polkadot’s system consists of two main components — the main chain and smaller, user-created chains. The main chain is called the Relay Chain, and the smaller ones are known as parachains. The Relay Chain acts as a foundation upon which the parachains are built, as it facilitates communication between the parachains and it’s responsible for their security.
Developers can engineer parachains within the Polkadot ecosystem using the tools provided by this protocol. As a result, creating them requires less time, effort, and funds. That said, these blockchains would still keep a fair share of their independence. They’d still have features like transparency, anonymity, and security. Plus, their developers would be able to create them as they see fit.
Polkadot’s parachains are connected by links called bridges, which allow parachains to interact with and send data and assets to other parachains within the system and blockchains outside of it.
What’s So Revolutionary About Polkadot?
Polkadot introduces several significant changes to the world of cryptocurrencies. These modifications are related to blockchain development, interoperability, security, and crypto scalability.
Namely, all cryptos that exist today function on the basis of separate blockchains built from scratch and independently from one another. As a result, none of them can communicate with one another.
Polkadot’s network establishes a system that provides developers with tools and resources to build their blockchains within minutes and then lets those blockchains interact. With these interactions, users can send and receive a variety of data.
The platform also spreads the network’s transactions across numerous parallel blockchains and, thus, facilitates scalability with reduced transaction times. Consequently, the Relay Chain can process over 1,000 transactions per second.
Polkadot strives to create a flexible system that requires no forks for upgrades and bug fixes, gives its user-created blockchains the right to self-governance, and provides an additional layer of security.
In addition, the project allows stakeholders to get involved in its governance. All holders of the native token, DOT, have the right to vote on the future development of Polkadot, depending on the number of tokens they own and their role in the project. Furthermore, they can also buy, sell, and exchange DOT like any other crypto.
Stakeholders’ Roles in the Project
As we’ve mentioned above, stakeholders can participate in the management of the Polkadot network by staking DOT. However, not everyone who stakes DOT has the same role.
Here are the roles you can hold in Polkadot:
- Validators — They hold the most significant position out of all we’ve listed here. If you’re familiar with what mining means in connection to Bitcoin, you’ll understand the validator’s job in Polkadot. They validate the transactions and add new blocks to the network. To do so, they need to invest a fair amount of DOT and have extensive knowledge about how the whole system functions.
- Nominators — These participants take part in the project by choosing (nominating) validators to do the work we’ve previously discussed and delegate their DOT to them. Their significance lies in determining how trustworthy a validator is. If they choose well, they contribute to the overall security of the network.
- Collators — The role of a collator is to maintain parachains by collecting performance data and adding it to new block candidates for the Relay Chain.
- Fishermen — They monitor the whole network and make sure it’s secure. Fishermen are in charge of stopping all invalid transactions.
Depending on the importance of your role, Polkadot honors your contribution to the project. Validators get the highest rewards since they assume the greatest responsibility.
Is Polkadot legal in Pennsylvania?
Pennsylvania regulates its money transactions according to its Money Transmission Business Licensing Law. However, this law doesn’t regulate the activities related to virtual currencies because it doesn’t recognize them as money.
In fact, the state’s Department of Banking and Securities (DoBS) issued an informal guidance document that confirms this view of digital currencies in 2014. The same document has established that transmission of virtual currencies does not require you to have a license.
As a result, you can engage in any activity related to cryptocurrencies in Pennsylvania, like buying or selling Polkadot, without obtaining an MTL or adhering to any specific rules.
Where to Buy DOT in Pennsylvania?
You have two options if you’re planning to purchase DOT in Pennsylvania. You can buy the crypto using a centralized crypto exchange platform or obtain the coins from an individual who owns them. Let’s explain both of these options in more detail.
Centralized Crypto Exchanges
If you don’t own any cryptos to trade for DOT, you’ll have to buy these coins for fiat currencies using a centralized crypto exchange.
There are many such exchanges in Pennsylvania since this state doesn’t require you to hold a license to engage in virtual currency transactions. Nevertheless, not all of them are the same.
Therefore, we’ve created a checklist of everything you should take into consideration when choosing the platform you want to join:
- Availability — Check whether the platform you’re thinking about joining is available in Pennsylvania. You should have a wide range of options since the Keystone state doesn’t require this entity to hold a permit.
- Crypto options — Go through all the cryptocurrencies the exchange you’re interested in works with. Naturally, your first step should be to look for Polkadot. However, it’s equally important that your platform of choice works with other popular cryptos. You should be able to exchange your DOT for as many other cryptocurrencies as you wish.
- Reputation — Research your potential exchange’s standing as much as you can. Unfortunately, there are a ton of platforms out there that are not reliable or trustworthy. Make sure the one you’ll eventually join has good reviews and positive feedback from the customers.
- User-friendliness — Take note of how the platform you’re checking out functions. You won’t find all options equally easy to navigate and use if you’re new to the industry. So, spend some time on the exchange to ensure it’s convenient to use on a regular basis.
- Security — Find out what security protocols the platform you’re considering is using. You also can read about the exchange’s history to see if it was the target of any cyber-attacks and, if so, how it handled it. It’s vital that your personal and financial data are well-protected at all times.
- Payment methods — Take a look at all the payment companies you’ll be able to use if you join the platform you’re considering. There should be a variety of options for limits, fees, and transaction speed that fit your needs.
- Fees — Don’t forget to check the transaction and conversion fees that the platform imposes. It’s best you read all the related information on the site and then compare it to that found on other platforms to make an informed decision.
Buying DOT Directly in Pennsylvania
As we’ve mentioned earlier, you can purchase DOT from a person who owns the tokens and is willing to sell them to you. While this is a viable option, it’s not the safest one. Crypto transactions are not reversible, and there’s a possibility you’ll get scammed. So, make sure you can trust the person you’re buying from before proceeding with the purchase.
How to Buy DOT in Pennsylvania — Step-by-Step Tutorial
We’ve created a short guide to buying Polkadot in Pennsylvania if you plan to do it via a crypto exchange platform.
Take a look at all the steps below:
- Choose a crypto wallet — Before you join a crypto exchange, find a crypto wallet in which you can store your coins.
- Pick an exchange — Select a platform that’s available in Pennsylvania, having in mind all the factors we’ve discussed above.
- Register — Create an account on your platform of choice by visiting its official website and providing all the necessary information.
- Deposit money — Select the fiat currency you want to use and enter the amount of money you wish to send to your exchange account.
- Buy DOT — Find Polkadot in the list of available cryptos on your exchange platform and purchase as many coins as you want.
- Withdraw DOT — Send the coins you’ve bought to your crypto wallet once they appear in your exchange account balance to ensure their safety.
Purchasing Polkadot in Pennsylvania is not a complex process. You can obtain your first DOT using a centralized crypto exchange or buying the coins from a reliable DOT holder. If you choose the former, simply follow our tutorial, and you’ll be all set.