Polkadot is a popular project-based on decentralized technologies, aiming to bring the idea of Web 3.0 closer to the world by making cross-chain transactions possible. If you haven’t understood the previous sentence, don’t worry — we’ll explain everything in detail in this article.
Due to the project’s popularity, its underlying cryptocurrency, also referred to as Polkadot (or just DOT), has caught the attention of many investors. And if you were wondering how to buy Polkadot in Iowa, you’ve come to the right page.
This detailed guide will explore Polkadot as a project and how its coin fits into its ecosystem. Moreover, we’ll discuss the available options for purchasing Polkadot in Iowa and guide you through the entire process. Read on!
Table of Contents
Polkadot is a protocol, much like Ethereum. The only difference is that Ethereum is confined to just one blockchain, meaning you cannot transfer assets on a different blockchain, which is pretty limiting when you think about it.
Polkadot uses a unique system that makes it possible to create parallel blockchains on the Polkadot blockchain (also called the Relay Chain), referred to as parachains. Their idea is pretty revolutionary, making Polkadot the most likely candidate to unite different blockchains and bring us a step closer to the concept of the decentralized web (also known as Web3 or Web 3.0).
To invest in this project, you need to buy Polkadot (DOT), the main coin of the Polkadot ecosystem. Unlike Bitcoin, DOT isn’t just a cryptocurrency, as it also has features of a utility token. In short, it has two main features:
- It’s used for governance — Anyone who holds DOT will have a chance to take part in governing the platform. This mainly includes voting on important and less important changes in the protocol. The more DOT you hold, the stronger your voting power will be.
- It’s used for staking — The Polkadot protocols allow staking DOT to improve the security of a network. Essentially, you’ll lock your DOT as collateral and receive rewards for doing so, which is a great way to achieve passive income.
But why was Polkadot so popular from its very beginning? One of the reasons is the team behind it. A name that stands out from the pack is Gavin Wood, Ethereum’s co-founder and Web3 Foundation president. The foundation is the central organization behind Polkadot.
How Staking Polkadot Works
Every decentralized protocol uses a particular consensus mechanism. For Bitcoin, that’s called proof-of-work and requires tremendous energy, which caused all the pollution from powerful computers keeping the network alive.
Polkadot uses a more eco-friendly approach for consensus called proof-of-stake (or nominated proof-of-stake, to be precise). Instead of using computer power to achieve consensus, you need to lock up your DOT and have a chance to verify transactions, secure the network, mint new tokens, and more.
Polkadot’s stakers are divided into several groups depending on how much they stake and their willingness to participate.
- Validators — A validator role is central and requires the most dedication and technical knowledge. Once a validator stakes the required amount of DOT, they can verify new transactions on the chain and add new blocks. Of course, their reward for that will be the largest.
- Nominators — If you don’t have a lot of DOT to stake, nor are you willing to commit more, you can invest tokens indirectly as a nominator and select a validator you want to “nominate.” Of course, you’ll receive a fraction of the prizes that validators receive. It’s important to choose good validators as your pay will depend on their performance.
- Collators — These roles are required to look after the valid transactions taking place on the main chain and submit them to appropriate validators.
- Fishermen — These roles are mainly reserved for finding misbehavior on the network and reporting the members who break the rules.
DOT in Numbers
Polkadot has been on the top 20 list both in terms of popularity and market cap for a long time, currently considered a hot investment opportunity. The coin recorded the all-time high on November 4, 2021, and the all-time low was on August 20, 2020. The largest price per unit was $55, whereas the lowest was $2.69.
Still, Polkadot is susceptible to volatility, much like other cryptocurrencies (not stablecoins). Therefore, by the time you read this text, the coin might have reached the new all-time high.
There’s no max supply limit, and the current total supply (as of March 2022) is about 1.1 billion DOT.
Where to Buy Polkadot in Iowa?
Like in all other US states, the residents of Iowa have two options to buy Polkadot. The most popular one is joining a centralized cryptocurrency exchange and purchasing DOT. The other, less popular and secure method is buying DOT directly from a seller.
Centralized Crypto Exchanges
Centralized crypto exchanges are the only legal method to purchase cryptocurrencies in the US, including Iowa. You can also use a decentralized exchange, as such platforms guarantee a higher level of anonymity, but they are very rare to non-existent for those looking to buy Polkadot.
On the other hand, centralized exchanges are common and trustworthy. Iowans have several popular options, such as Coinbase, Kraken, and more. If you decide to select a centralized crypto exchange on your own, make sure to pay attention to the following aspects.
- Availability in Iowa — First of all, you need to ensure that you can access the exchange and use USD to buy DOT and other cryptocurrencies available on the platform of your choice.
- Security — You’ll potentially store a lot of money on the exchange of your choice, so make sure it has all security protocols in check before leaving your sensitive data, let alone making a deposit.
- Privacy — Privacy isn’t the greatest on centralized exchanges as they need to battle money laundering and terrorist financing. The only way to do so is by requiring your sensitive data. However, established exchanges will still handle your data with care and ensure nobody sees it.
- Deposit and withdrawal options — Find a platform that accepts the fiat payment methods you’re frequently using so that you can make quick deposits and withdrawals whenever necessary.
- Liquidity — Less popular exchanges might struggle to swap the coins right away if there aren’t enough interested parties. In other words, you want to buy and sell DOT (or any other accepted crypto) as soon as you place an order. Therefore, it’s important to pay attention to the overall liquidity of the platform of your choice.
- Fees — Every exchange will charge fees and commissions on your deposits and trades. You have to find the one that has the best price/quality ratio.
- Limits — It’s no secret that some exchanges impose more limitations than others, so it’s up to you to pick the one that’s within your budget.
If you want to circumvent all the rules and fees imposed by centralized crypto exchanges, you can always find someone to buy DOT from directly. Mind you, this isn’t 100% legal, and there’s always a chance to get scammed, so you may do it in absolute discretion and only if you trust the other person entirely. If not, it’s best to stick to exchanges.
How to Buy DOT in Iowa on an Exchange — Step-by-Step Guide
Here’s a short overview of the steps you need to take to become a DOT owner.
- Get a wallet — It’s essential to select a wallet that accepts DOT so that you have it stored once you purchase it.
- Select an exchange — Use one of the popular exchanges suggested on this page or find an exchange yourself, following the tips we provided above.
- Open an account — Most exchanges feature a simple registration process. However, you’ll also have to go to a KYC process to gain full membership, and that can take between 5 and 15 minutes, depending on the documentation you’re required to provide.
- Make a deposit — Pick one of the available fiat payment options to load your balance on the exchange of your choice.
- Buy DOT — Find the option to purchase Polkadot with fiat money, enter the amount you want to purchase, and proceed with it. Your DOT will be stored in your exchange balance, and you can use it for further trading or withdraw it to your Polkadot wallet.
Hopefully, you are now more familiar with the Polkadot protocol and cryptocurrency. So, it’s now up to you to pick one of the available exchanges and purchase DOT. But that’s not the end of your journey. Instead of just hodling DOT, you need to consider other things you can do with it, including DOT staking, which can help you bring passive income on a long-term basis.