Although it is a relatively new cryptocurrency, Polkadot has gained popularity rapidly. Ever since its launch in May 2020, it has constantly been rising in rank, and even though there is no risk it will dethrone BTC any time soon, it certainly poses a threat to other high-ranking cryptocurrencies.
Due to Polkadot’s popularity, many investors started gravitating toward it. People from Massachusetts are free to purchase, sell, or trade cryptocurrencies since there are no regulations on money servicers in Massachusetts, and the Division of Banks has not provided any guidance on whether money servicers need to own a license.
If you want to know more about Polkadot, you’ve come to the right place. In this guide, we’ll discuss Polkadot’s worth, how its platform works, and how to safely obtain DOT tokens.
Polkadot was created by the Web3 Foundation. The leader of this Swiss technology company is Gavin Wood, one of the co-founders of the Ethereum blockchain. According to its founding team, Polkadot is a community-driven platform that aids the interoperability of different blockchains. That means that it allows communication between two or more competing networks.
The Polkadot token (DOT) is the native cryptocurrency of the platform. It allows Polkadot users to carry out some of the core network functions, including governance, staking, and bonding.
Polkadot’s platform mechanism is divided into three segments: the Relay Chain, parachains, and bridges.
- The Relay Chain — The goal of this mechanism is to check the transaction address and standardize the information. This model keeps the addition and validation of processes separate to achieve better transaction speed. The network can process over 1,000 transactions per second thanks to the Relay Chain.
- Parachains — Polkadot is a multi-chain network. As a result, it can process transactions over parallel chains — parachains. Every parachain can design its governance mechanisms without affecting other chains. The more lanes to complete transactions, the less chance the network gets overloaded. The Polkadot network is verified via a proof-of-stake protocol. This means that DOT holders connected to the network can verify transactions and be rewarded with freshly minted coins.
- Bridges — People behind Polkadot are planning to develop different bridges that will allow interaction between Polkadot and other blockchains. This way, users will also be able to swap tokens directly without an exchange as a mediator.
Another noteworthy thing to point out is that, besides improving interoperability, Polkadot solves the problem of scalability, enhances security, and eliminates the need for forks.
Polkadot in Numbers
Although relatively young, Polkadot is among the top 20 cryptocurrencies in terms of popularity and market capitalization. Its value has fluctuated slightly but not as dramatically as that of other cryptos. In the beginning, the DOT coin was worth $2.9. It reached its highest value, $53.88, on November 8, 2021. Currently, the DOT coin is worth around $17 (as of March 2022), but its value changes in a matter of hours.
Unlike Bitcoin, whose total supply is known, for Polkadot, that information is unavailable. Its total supply at the moment is about 1.1 billion DOT, but this number is bound to grow, as there is no maximum supply limit. The DOT circulating supply is over 987 million coins, while its market cap exceeds $17 billion.
Why You Should Buy Polkadot
Due to their being highly volatile, we cannot predict which coins will be around in a couple of months, let alone a couple of years. This applies to Polkadot as well.
However, the DOT coin has a solid foundation. There is a slew of dedicated developers and an experienced management team behind it. And most importantly, this technology could solve a fundamental crypto problem all blockchains face — interoperability.
Here are a few facts why Polkadot attracts investors:
- You can earn interest on your staked DOT tokens — By staking your funds, you agree to leave them untouched for a specified period. Your tokens will then be used to validate other transactions. You can earn an average interest rate of 10% based on how long you choose to lock up your coins. Plus, the rates vary according to how many coins are staked.
- Its ecosystem is home to numerous projects — Polkadot features over 250 projects running on its network. Among these, you can find gaming platforms, cryptocurrencies, and decentralized finance applications (DeFi). For building applications, developers can use parachains connected to the main blockchain, thus reducing congestion.
Where Can I Buy Polkadot in Massachusetts?
If you live in Massachusetts and want to become a Polkadot owner, you can do it via a centralized crypto exchange, through an ATM, or from another buyer directly. Let’s have a closer look at all three ways.
Centralized Cryptocurrency Exchanges
One of the safest ways of purchasing DOT coins in Massachusetts is via a centralized cryptocurrency exchange. On these platforms, you can buy and sell cryptocurrencies as well as other digital assets.
Some popular exchanges are Gemini, Kraken, eToro, and Coinbase. Before using their tools, you need to verify your personal information. There is also a third party involved in these exchanges, whose role is to monitor and secure transactions on behalf of the user.
On the other hand, there are decentralized cryptocurrency exchanges (DEX). The main difference is that they lack third-party intervention. They allow peer-to-peer trading, and the funds in the exchange are stored on the blockchain.
Before choosing a centralized crypto exchange, make sure it features all of the following aspects:
- Availability in Massachusetts — State or federal regulations may prevent you from buying and selling cryptocurrency on certain exchanges. The easiest way to check if a particular exchange is available in Massachusetts is by visiting its official website.
- Accepted cryptocurrencies — Make sure Polkadot is among the supported cryptocurrencies. Also, if you want to exchange another crypto for DOT, check if the exchange features it.
- Security and privacy — The exchange’s security should be your top priority. You don’t want your funds to be stolen, so check if a chosen exchange employs cutting-edge encryption and the latest firewalls to protect your personal and financial data.
- Reputation — By reading other members’ reviews, you can find out whether they are satisfied with the exchange and if they recommend it.
- Liquidity — For you to be able to sell your holdings when you desire, the exchange should have a high trading volume of DOT coins. This way, you will not wait too long for a transaction to be complete, and the prices will be reasonable. Be sure to check the most popular exchanges, as they usually have the largest trading volumes.
- Payment methods — Crypto exchanges may feature various payment methods. However, it is important to find the one that supports your preferred payment option.
- Fees and limits — It is advisable to check all the fees an exchange imposes. Some of them may decrease if your trading volumes are higher. You should also be aware that some exchanges limit how much you can trade, buy, or sell over a certain period. We suggest that you compare several platforms and choose the one with reasonable fees and limits.
- User interface — The user interface has to be simple and easy to navigate on desktops and mobile phones. A good user experience and easy navigation will facilitate the entire process, especially if you are a beginner.
In Massachusetts, you can instantly buy DOT tokens using cash through automated teller machines (ATMs). Most ATMs only require your telephone number for verification, as long as you are not buying a lot of DOT tokens. In that sense, they are more private than exchanges.
It is also possible to purchase Polkadot from another owner. For instance, you can find someone who has DOT tokens and buy from that person directly. However, there is a risk of being scammed. If you decide to go this way, make sure to find a reliable person and finalize the trade in a public place.
To lower the risk when buying from another owner, people from Massachusetts can use specific peer-to-peer exchange platforms. On them, they can trade Polkadot with another individual. There is also some risk involved, so to minimize it, it is advisable to conduct all the business on the platform and choose to trade only with those DOT holders who have a good reputation.
Step-By-Step Guide on How to Buy Polkadot in Massachusetts
If you are new to purchasing cryptocurrencies and you’ve never used an exchange platform before, you may be unsure what the entire process looks like. But, worry not — we’ve created this step-by-step guide to lead you through the whole procedure.
- Find the right wallet — Even though your DOT tokens can stay on the exchange, transferring them to your wallet is safer. Just make sure to pick the one that supports Polkadot.
- Select an exchange — You can opt for one of the reputable exchanges we’ve suggested above in this guide or find another one that suits your needs. In any case, make sure it covers all the essential aspects we have discussed.
- Open an account — Go to the exchange’s official website, submit the necessary documents, and complete the verification process.
- Make a deposit — Choose your preferred deposit method and fund your account with a fiat currency (USD in your case). Top up your account with enough money to cover all the potential fees.
- Purchase DOT — Find the DOT on the exchange and purchase the desired amount of tokens.
- Transfer DOT to your wallet — Once you have purchased your DOT coins, you can transfer them to your wallet. If you plan to trade with them further and leave them on the exchange, make sure the platform features offline cold storage protected against cyber attacks.
We hope this guide has provided enough insight into how Polkadot works, how you can buy it, and whether it is a good investment. Now, you need to decide how you want to purchase it — via an exchange or from another owner directly.
Either way, we suggest you do a little bit of digging and educate yourself, especially if you are a beginner in the world of cryptos. Before investing, study the latest Polkadot news and trends, or even hire an expert for a professional’s opinion.