Like all other states in the US, Maryland lacks a lot of new regulations that would cover blockchain technology and cryptocurrencies adequately. However, that doesn’t mean that the crypto scene is any less developed. It’s quite the opposite, actually, and more and more people are looking to invest, start using, or trade various cryptos.
One of the more exciting choices lately is Polkadot — an interoperability protocol and cryptocurrency that’s dubbed by many to be the Ethereum killer. A lot of interest surrounds Polkadot, and in this piece, we wanted to talk more about it.
We’ll discuss what it is, how it works, and the numbers encompassing it. Most importantly, we’ll tell you how and where to buy the crypto and list a few excellent websites that offer a large number of DOT tokens. So, without further ado, let’s jump right into it.
Table of Contents
Polkadot (DOT) Explained
Polkadot is an interoperability protocol or an open-source sharded multichain protocol. It’s made to connect and secure an entire network of blockchains that are independent and unique. This is where the main benefit of Polkadot lies. It was created to interconnect any type of blockchain and quickly transfer any kind of data or asset via this ever-expanding network.
In short — Polkadot was made to be a foundation for a decentralized web, an internet-enabled by decentralized blockchains, or something that is now called Web3. It’s the next likely step in the evolution of the Internet.
All of this is possible thanks to how Polkadot works, including the core components that enable it to function:
- Relay chain — The main chain of Polkadot that helps the interoperability, security, and consensus of all blockchains on the network.
- Parachains — The independent chains that can be bonded to the network, created on it, and more. They are secured by Polkadot’s security features but work independently with their own native cryptos.
- Parathreads — Akin to parachains but made with a lot more flexibility and working based on a pay-as-you-go model.
- Bridges — Used to connect parachains and parathreads and give them the ability to communicate with outside blockchains.
The native cryptocurrency of Polkadot is also called Polkadot or DOT for short. The token is made to enable the protocol to function and expand. In essence, it serves three crucial functions in the Polkadot network:
- To help the governance of the network
- To bond and connect other parachains to the relay chain
- To be staked so the operation of the network can continue functioning smoothly
How Polkadot Functions
Polkadot strives to create a framework so all blockchains in the world can connect to each other while remaining independent.
At the center of this unique system is the relay chain that connects all other parachains and keeps track of all network transactions. With the help of parachains, it can support more transactions and expand.
All this works with the help of the Nominated Proof-of-Stake (NPoS) method for cryptocurrency transaction validation. It’s effectively an upgraded version of PoW that famously makes Bitcoin incredibly secure. NPoS uses a different approach with four unique roles. Each token holder can choose one of those roles based on how involved they want to be in the Polkadot network and its development:
- Nominators — DOT holders with the staking ability but without taking more responsibility in the network.
- Validators — DOT holders who stake their tokens and verify transactions or, in other words, take care of the security of the network.
- Collators — DOT holders who maintain the history of the main chain and all parachains.
- Fishermen — DOT holders with the task of policing invalid transactions.
Key Events and Network Management
Polkadot was first created in 2016 by Peter Czaban, Robert Habermeier, and Gavin Wood, the co-founder of Ethereum.
The first ICO occurred a year later, in October 2017. The price of each DOT token was only $0.29, offering as many as 2.24 million tokens at the time.
It took time for the whole thing to take off, so the relay chain was launched much later, in 2020. This was also when the new Substrate software was released — the software that allows developers to build parachains and link them to the Polkadot network.
At the same time, the second ICO transpired, and the official price was $1.25 per token, with as many as 342,080 tokens sold.
A month later, in August 2020, the entire system underwent a redenomination where each DOT token became equivalent to 100 new tokens. However, this was only a cosmetic change to make calculations easier and avoid using smaller decimals.
When writing this (early March 2022), the DOT token’s price was around $17, and the market cap was around $16.5 billion. The token’s price has been going down lately, after witnessing a massive rise in 2021 when it reached an all-time high of $55 per token.
This hasn’t made the token any less worth investing in, as it’s still one of the top 20 cryptos on the planet.
The total number of tokens is around 1.1 billion, with the circulating supply around 987 million. The network has no cap, so new tokens can be added indefinitely. However, they still have a predetermined 10% inflation rate to avoid losing all of their value.
Where to Buy Polkadot (DOT) in Maryland?
You can buy Polkadot in Maryland using two methods, just as you would in most of the United States. These methods are:
- Centralized crypto exchanges
- Direct purchase from another person
Centralized exchanges are the most popular option by far. However, it’s worth mentioning that there are two types of exchanges — centralized and decentralized. They are called that because the former is owned and operated by licensed entities, while the latter is made in the spirit of crypto — completely decentralized but consequently unlicensed.
However, the former is more popular and widely trusted, which is why we’ll focus on them. Plus, it’s pretty hard to find a good decentralized crypto exchange that deals with DOT.
Centralized Crypto Exchanges
Centralized crypto exchanges are incredibly popular today and used for buying and selling numerous cryptocurrencies. They are marketplaces that facilitate crypto trading for fiat currency, fiat for crypto, and crypto for crypto.
As they are regulated, you can easily pick any that works in the state of Maryland and has enough DOT tokens. However, a lot of other considerations need to be made as well, so let’s take a look at everything you need to consider before registering on one:
- Accepted coins — Besides DOT, you need to check that the exchange has other cryptocurrencies as you’ll likely want to trade them at some point. Even if you won’t, many cryptos show that the exchange has better liquidity and popularity.
- Availability in Maryland — Most exchanges in the US are available throughout the country. Still, there are always some differences from state to state, so an exchange you like might not be available in Maryland.
- Quality and ease-of-use — It’s always crucial that a website is functional and well-designed so you can use it easily.
- Safety — Most exchanges with licenses need to respect high-security standards, but breaches still occur. That’s why you need to check how they deal with breaches and other security issues, as well as what insurance they offer.
- Privacy — Every exchange takes a bunch of your sensitive info when you’re registering, as well as the info on your payment method. Check that they keep all of that data safely without making it available to numerous third parties.
- Reputation — You’ll need to check online reviews and customer feedback as this will ensure the exchange you’re looking into is a great one.
- Payment options — Exchanges have various payment options for depositing and withdrawing, but you should still check that your favorite ones are on the list.
- Fees and costs — Every exchange has fees and other expenses that fall on your back, but their values differ from site to site.
Buying Directly From a Person
Instead of using websites, you can always opt for trading DOT in person with a willing party. However, this method is risky if you don’t know the person, so you’ll end up needing a mediator anyway.
If you still prefer to do it this way, make sure you find a way to make the trade safely, so you don’t get scammed.
How to Buy Polkadot — Easy Step-by-Step Guide
Buying any crypto is quite simple on exchanges, and it’s usually the same across the board. Here’s the process you’ll typically need to follow for DOT or any other crypto:
- Set up a wallet — Before you begin, make sure you get a good crypto wallet that handles Polkadot.
- Pick an exchange — Choose one we recommend or find a reputable exchange on the web.
- Visit the website and register — Set up an account with the exchange you’ve chosen by following the instructions. This mainly involves you inputting your personal data and subsequently verifying the account.
- Make a deposit — Pick one of the available payment methods and follow the instructions to deposit the funds needed for buying DOT.
- Buy Polkadot — Pick the right pair, in this case, USD for DOT, and just enter the amount you want to buy and confirm the trade.
- Withdraw DOT to your wallet — If you don’t want to continue trading your DOT tokens, it’s best to transfer them to your wallet as this is a much safer storage method.
As you can see, buying Polkadot in Maryland is incredibly simple. If you’ve researched Polkadot, what it promises, how it works, and everything else that matters, you only need to pick an exchange and start buying.
Once you buy your first DOT tokens, you can trade them, keep them, stake them to earn more, and many other things. The choice is yours.