Polkadot is one of the many cryptocurrencies available on the market today, and Virginia is one of many US states with a high interest in various cryptos. Even the state itself had shown interest, especially in early March 2022, when it passed a bill allowing banks in Virginia to provide crypto custody services to their clients.
This groundbreaking law indicates that crypto in Virginia is up for expansion. Moreover, it certainly shows that tokens like Polkadot are there to stay. But how can this interesting crypto stay in your pocket? And how can you buy Polkadot?
The good news is that there are many options, and we’ll discuss them here. We’ll also tell you how to buy Polkadot and give you answers to some of your burning questions. But before we do that, let’s begin by explaining what Polkadot actually is and how it works.
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What Is Polkadot (DOT)?
Polkadot is a cryptocurrency like most others, but it’s also an entire platform, noticeably similar to Ethereum. However, the main idea behind Polkadot is quite unique.
This specific protocol wants to bring Web3, or the new, decentralized internet, closer to fruition. It can do that through its main functionality, and that’s the creation of new blockchains or connections of existing ones.
You see, Polkadot has its own main chain called the Relay Chain, but it also has countless additional, equally independent chains called parachains. These parachains are effectively other blockchains that have been connected to the Polkadot network.
In essence, you can connect to any other blockchain, no matter how different it is from the Polkadot network. That way, anyone can effectively transfer any type of asset or data through the Polkadot network.
However, the main thing that moves through this network is the Polkadot cryptocurrency, called Polkadot or simply DOT.
DOT Token Explained
The DOT token is the native currency of Polkadot that uses the same name or the ticker symbol DOT by which you’ll see it listed on all cryptocurrency exchanges.
It’s always in the top 20 cryptos on the planet by market cap, which shows its popularity and potential. Furthermore, Polkadot doesn’t have a cap on the number of tokens that will ever be released, but it does have a predetermined annual inflation rate close to 10%, which ensures it doesn’t devalue completely.
DOT is like all other cryptocurrencies, meaning you can buy and sell it to make a profit. However, it’s also a utility token, which means you can do more with it.
The Polkadot network uses something called the Proof-of-Stake consensus mechanism, meaning its users can stake their DOTs to take part in the governance of the network. This means the tokens become a sort of collateral.
Naturally, this is useful not only for the network but also for users, as by staking tokens, users can get new ones as a reward. The exact reward and what you have to do differs depending on the role you assume. The Polkadot network has several roles:
- Validator — When you assume the role of a validator, you have to validate transactions and add new blocks to the Polkadot chain. The role is essentially similar to that of the miners in Bitcoin, but without the mining part, as DOTs are not mined. However, this role is not so simple, and you need to understand Polkadot very well to effectively fulfill validators’ duties.
- Nominator — To assume this role in Polkadot means you have to provide security to the Relay Chain. In essence, you have to pick validators who have been acting in good faith towards the network, and then you need to delegate new DOTs to them as a reward. If the validators are doing a good job, you too will be rewarded with new DOTs.
- Fisherman — Fishermen monitor the whole network and report any breaches, or other security issues validators need to be aware of.
- Collator — Collators collect performance data on parachains and then add that information to blocks within the Relay Chain.
Where to Buy DOT in Virginia?
In essence, you can pick one of two ways to purchase DOTs in Virginia — buying directly from someone or through a cryptocurrency exchange.
But before we begin covering both methods and how they work, you should learn about the two types of crypto exchanges — centralized and decentralized.
We will only discuss the former because the latter is not owned by specific organizations, doesn’t have licenses, and most importantly, doesn’t allow you to buy Polkadot with fiat currency. They are also quite rare, so even if you wanted to use them, you would have a hard time finding one that offers DOT.
Centralized Crypto Exchanges
Centralized crypto exchanges are online marketplaces for buying and selling various cryptocurrencies. They are called centralized because they are owned by specific organizations or companies and need to gain a proper license to operate in the US and specifically Virginia. Due to that, they allow their members to purchase cryptos like DOT using US dollars.
However, it’s not easy choosing the right one as there are plenty of them, and they all come with different features and aspects. So, let’s take a look at what you need to look into when deciding which exchange to choose:
- Availability of Polkadot — Naturally, the first and most important thing you need to check is that the exchange has Polkadot.
- Availability in Virginia — As long as an exchange is legal in the US, it’s likely legal in most states, including Virginia. However, some outliers will always exist, so ensure that the exchange is licensed to operate in Virginia.
- Availability of other cryptocurrencies — Even if you don’t want to buy other coins, the exchange must cover as many as possible. It shows the exchange is popular and widely used, and it gives you options if you change your mind in the future.
- Reputation — Many aspects point toward the popularity of the exchange, but it’s useful for you to check the overall popularity through customer feedback, online reviews, and more.
- Security — Security features are some of the most important features an exchange needs to have, as breaches aren’t uncommon in the world of crypto. It also matters how an exchange deals with breaches and whether it offers insurance.
- Payment options — Every exchange supports a wide range of payment methods like various bank transfers, credit and debit cards, e-wallets, and more. Check what they are to ensure the ones you like to use are supported.
- Pricing — Crypto exchanges are free to use, but they always come with specific fees or commissions. Most notably, you have to pay deposit fees, withdrawal fees, and transaction fees.
- Liquidity — Sometimes, the fact that an exchange offers DOT is not enough if the liquidity is terrible. You want the exchange to have large quantities of DOT to complete most of your trades in due time.
Instead of using an exchange, you can always opt for buying DOT directly from a person willing to sell it. In essence, this is the simplest method as you only need to transfer the cash, and the seller needs to transfer the DOTs.
However, it’s not recommended unless you’re sure you can trust that person. Scammers exist, and you can never be sure that you’re dealing with an honest trader unless you know them.
So, if you’re going to do this, make sure you either do it in public at the same time or that you’re using a mediator both you and the seller can trust. If you can’t make the trade safe, it’s best to avoid making it.
How to Buy DOT in Virginia — Quick Step-by-Step Instructions
If you’ve decided to use a crypto exchange, here’s the procedure you’ll typically have to follow to buy your first DOT tokens:
- Set up a crypto wallet — The first step is to find a good crypto wallet that deals with Polkadot and set up an account.
- Pick an exchange — Use our instructions to choose a good crypto exchange where you’ll purchase your first tokens.
- Create an account — Once you have an exchange, visit the official site and complete the registration procedure. Verify your account when prompted.
- Deposit money — When the account is up and ready, visit the payment section and pick a deposit method you like. Input the necessary information and complete the deposit.
- Buy DOT — Once the money is in your account, you can buy a desired number of DOTs.
- Withdraw DOT — If you’re planning on keeping the tokens long-term for staking or something similar, it’s best to transfer them to your newly created crypto wallet, as that’s much safer than keeping them on the exchange.
So, there you have it — all you needed to know about buying Polkadot in Virginia. As you can see, the best option is to use a good exchange. Thankfully, it’s also the easiest option to use, so all you need to do is register an account, make a deposit, and start trading.
But before you do that, make sure you have the funds you’re willing to spend on this investment and, more importantly, that you are ready to enter these waters.