Cryptocurrencies have been gaining traction on American soil for a while now. Naturally, some seem to be more popular than others for various reasons. Polkadot, a seminal blockchain-based project, is one of them.
Today’s article will cover the topic of Polkadot’s emergence and significance and discuss how and where you can purchase this crypto in Tennessee.
Table of Contents
What Is Polkadot?
Polkadot is a project that aims to create a heterogeneous multi-chain network powered by its native cryptocurrency DOT. This protocol would create a foundation for creating other blockchains and facilitate their functioning.
To be more precise, it would connect all of these blockchains into a network and allow interoperability, improve scalability, and provide security within that network. It would, thus, solve a range of issues that the crypto sector is limited by presently and pave the way toward a more private, decentralized web — Web3.
Web3 Foundation is a Swiss organization that founded the Polkadot project in 2016. Ethereum’s former CTO Gavin Wood, Robert Habermeier, and Peter Czaban stand behind the original idea.
This project’s ground-breaking mission caused quite a stir in the crypto space. So, it isn’t a surprise that Polkadot quickly rose in popularity after its launch and remained in the top 12 cryptocurrencies in the world by market cap.
Polkadot’s Main Features
Polkadot comprises several components that work together to make its mission possible. The main component is a large blockchain called the Relay Chain. Its purpose is to connect other blockchains and establish effective communication between them.
The smaller blockchains attached to the Relay Chain are called parachains. Developers can create individual, custom blockchain structures within Polkadot’s ecosystem.
To do that, developers have to acquire a parachain slot. They can bid DOT for a parachain slot in an on-chain auction. The auction winner gets the right to lease a parachain slot for a fixed amount of time and participate in and support the project.
After acquiring a slot, developers are free to create their blockchains. Polkadot uses Substrate, a special framework, to facilitate that process. Substrate provides blockchain developers with the necessary tools and resources to build and customize blockchains and attach them to the main chain. It repurposes the time, energy, and money developers typically spend on building blockchains from square one and allows them to use it to add value to their projects instead.
Once created and attached to the Relay Chain, parachains reap this network’s benefits. They can also interact with other blockchains inside and outside Polkadot’s ecosystem via links called Bridges. They’ll enjoy scalable transactions and rely on this network’s security instead of investing in their own security with full audits.
DOT Token and Investments
If you’re interested in participating in and supporting Polkadot, you have to hold DOT, Polkadot’s native cryptocurrency. DOT has all characteristics other tokens do, meaning you can sell, exchange, and buy it. However, this coin has one more trait — it gives its holders a chance to earn passive income and power to partake in Polkadot’s governance.
DOT holders can take advantage of the mentioned rights depending on their stake — the number of tokens they hold and how much they contribute to the project.
Since Polkadot uses a consensus mechanism called Nominated Proof-of-Stake (NPoS), virtually all DOT holders can participate in the project in different roles. Polkadot allows you to hold the following roles:
- Validator — Validators add blocks to the blockchains and verify transactions on the network. Validators are given the biggest rewards for their contributions since the greatest responsibility rests with this role in the project.
- Nominator — Nominators participate in the project by nominating candidates they see fit to assume the validator role. They’re rewarded based on how good of a job the validators they’re supporting do.
- Collator — Collators gather information from the parachains on how well those parachains are performing and send reports to the Relay Chain.
- Fisherman — Fishermen don’t engage in any type of production within the network. Instead, they act as security in charge of stopping invalid state transactions.
This type of organization grants DOT holders a say in the project’s future, establishes higher security within the system, keeps the number of validators limited, and maintains all the operations on the network efficient.
Crypto Laws in Tennessee
The Tennessee Money Transmitter Act doesn’t consider virtual currencies to be money. Nonetheless, some virtual currency-related activities occurring within the borders of Tennesse can be considered money transmission and require you have a money transmitters license.
You might need a valid Tennessee-issued MTL if you:
- Exchange cryptocurrencies for a sovereign currency through a third-party exchanger if “the seller receives the sovereign currency in exchange for a promise to make it available at a later time or different location.”
- Exchange cryptocurrencies for sovereign currency using an automated machine (essentially a crypto ATM) if “the operator of the machine receives the buyer’s sovereign currency in exchange for a promise to make it available to the seller.”
We suggest you read the regulation more closely before you engage in any Polkadot-related activities in Tennessee to avoid issues with the law.
Where to Buy Polkadot in Tennessee
Tennessee residents interested in buying DOT in this state have two options. They can purchase this crypto using a crypto exchange platform or obtain the coins from an individual willing to sell them. We’ll consider both options in more detail in the sections below.
Crypto exchanges comprise two types of platforms — centralized and decentralized. Centralized platforms allow users to exchange fiat currencies for cryptos, while decentralized platforms don’t accept fiat currencies at all. You’d have to have crypto coins the platform works with to obtain DOT on it.
If you’re new to the crypto realm, you’ll likely have to use the former option. Here’s what you should take into account when selecting the centralized crypto exchange you want to join:
- Availability — A ton of centralized exchanges work on the territory of the US. However, not all of them are available in your home state. So, make sure the platform you’re interested in offers its services to Tennesseean crypto users.
- License — As you’ve had a chance to read, Tennessee’s crypto regulations are very specific. So, don’t forget to check whether the platform holds a valid Tennessee MTL and/or adheres to relevant rules this state imposes.
- Reliability — Some cryptocurrency exchanges don’t have the best reputation in the industry and are not entirely reliable. Look into each platforms’ history and read its users’ feedback to decide whether they’re trustworthy.
- Security — Crypto exchanges use various security protocols to protect their users. Learn what security measures the exchange you’re considering implements and find out whether it has been the target of cyberattacks in the past.
- Liquidity — Different exchanges attract different numbers of traders. Ensure the platform of your choice has enough DOT traded on it regularly.
- Payment options — Crypto exchanges typically collaborate with many payment companies. Check which payment methods are available on the exchange you want to join and whether they suit your preferences.
- Fees — All crypto exchange platforms change fees for their transaction and conversion-related services. Make sure the fees your future platform imposes on its customers fit your budget.
- Ease of use — Navigating and using a crypto exchange platform can be hard, especially if you’ve no prior experience. Visit and explore the platform you plan to join beforehand and decide whether you find it user-friendly or not.
Buying DOT Directly
You can purchase DOT directly from an individual who owns this crypto if you don’t want to opt for a crypto exchange. However, this option might not be that simple either. You’ll have to make sure the seller is trustworthy since scams are common during such exchanges. Plus, you’ll have to look into the rules Tennessean laws regarding purchases like these to make sure you’re not breaking any regulations.
Step-by-Step Tutorial to Buying Polkadot in Tennessee
If the registering process is what makes you hesitant about using a crypto exchange platform to buy DOT, you don’t have to worry much. We’ve created a step-by-step tutorial to make this procedure as straightforward and hassle-free as possible. You’ll find all the steps below:
- Choose a crypto wallet — The first step you need to go through is picking the right crypto wallet. Make sure you select a reputable one to ensure your funds are secure.
- Pick an exchange platform — Find a cryptocurrency exchange that meets all your needs minding the factors we’ve previously discussed.
- Create and activate an account — Fill in the registration form on your exchange’s official website, confirm your request, and go through the necessary verification process.
- Purchase DOT — Make a deposit using the payment method of your choice and find the option to buy DOT when those funds appear in your account balance.
- Withdraw DOT — Send the coins you’ve bought to your crypto wallet to keep them completely safe.
Buying Polkadot in Tennessee isn’t a lengthy process. You have to find a reputable crypto exchange and follow the steps outlined above or buy the crypto from a reliable person willing to sell them. Either way, make sure you’re adhering to the Tennessean crypto laws and being safe.