What Is Polkadot Crypto (DOT)?
The Polkadot crypto, known also as its ticker symbol DOT, is the native cryptocurrency of the Polkadot blockchain.
Polkadot was born from the idea of Gavin Wood, one of the creators of Ethereum. His goal was to make improvements to the original project, making it even more scalable for the execution of smart contracts and associated operations. This new blockchain has achieved all the set objectives: with Polkadot it is possible to easily scale any operation carried out on the network, easily obtain new cryptocurrency and unify cryptocurrency networks, due to the multi-chain nature of the project, making them easily interoperable without having to increase the computing power indefinitely.
The consensus mechanism of the Polkadot blockchain is Proof-of-Stake, the one Ethereum is currently trying to upgrade to from its current Proof-of-Work. That means that Participants in the blockchain are rewarded based on their effective participation (in terms of cryptocurrency shares or processed blocks), pseudorandomly assigning who has to add the new blocks. This means that you can’t mine the Polkadot crypto and instead stake it. Using this new consensus mechanism, this blockchain is much faster at processing even the most complex operations, than Proof-of-Work competitors, as well as managing a large number of blockchain subnets.
Considering the many advantages of the Polkadot network, the token DOT also seems like a good investment option, if you take into account its growth in the past and the utility of the token, as it’s used actively on the Polkadot network.
The Current Polkadot Price
The fact that the Polkadot price has remained with a positive return of investment value even now, months after the crypto market began crashing and can’t seem to begin to recover, proves that the crypto may yield good potential. In the space of a little over an year, DOT managed to grow from its all-time low of $2.69 in 2020, to $55 towards the end of 2021. This impressive price action brought many new investors to the crypto and made them stay because of the blockchain as well.
If you’re curious about how the price of DOT is doing at the moment, you can see that in the chart below.
Where to Buy Polkadot Crypto (DOT)
Since the rise of popularity of the Polkadot crypto and its blockchain, the asset has been listed in many platforms for crypto trading. If you’re looking for an easy and quick ways to buy DOT, then your best bet would be either a crypto exchange or a broker. The difference between the two is in the types of assets they provide for trading. As you can guess from the name, crypto exchanges offer only digital currencies for buying and selling. Unlike them, brokerages provide other assets beyond crypto, like stocks, bonds, or ETFs. Here we’ll look at the two options to help you find out which one would be better for you.
There are many exchanges that have listed the Polkadot crypto by now. If you pick places like Binance, Coinbase, or FTX, you’ll be buying your coins at a centralized exchange. That means that a third party will be monitoring your transactions. For some, that may take away from the freedom digital assets provide. If you’re one of those people, you can opt for buying your DOT tokens at a decentralized exchange like Karura, made by Polkadot’s “wilder cousin” Kusama. If you choose a decentralized exchange to buy your coins, you won’t have to confirm your identity to trade and you won’t have your transactions monitored, they’ll be only peer-to-peer.
If you want to explore other assets and pick a broker to buy your Polkadot cryptos, you can do it at places like eToro that provide DOT for trading, along with other cryptocurrencies, stocks, foreign fiat currencies, and other assets.
What Is the Best Wallet for Polkadot Crypto (DOT)
If you’re wondering where you can store your DOT cryptos, the easiest option would be to do it at a built-in wallet if the exchange of broker where you bought the assets provides one. If you’re willing to spend more time looking for other services, you have the option to store your cryptos online, in a hot storage wallet, or offline, in a cold storage ones. Let’s go over the two types of wallets.
Picking a hot storage wallet would mean that your DOT coins are always online, along with your private keys, and you can access them through your desktop, browser, or app, depending on how the wallet works. Some of the hot wallets that support Polkadot are Polkawallet, Math Wallet, Atomic Wallet, and Lunie Wallet.
If you’re worried that your cryptos are exposed to danger by being constantly online, then you can choose a cold storage wallet, also known as hardware wallets, for them. This type of external device only needs to be connected to your computer and the internet when you’re buying and selling crypto assets, meaning the risk of hackers attacking it is considerably lower than the hot wallets. Wallets like Trezor and SafePal can store your Polkadot crypto.
How to Make Money With Polkadot Crypto
Since it was launched, the Polkadot cryptocurrency has been very volatile, like most assets on the market. While this may be concerning for some cautious investors, others find it as a great opportunity to trade Polkadot and earn in the short term from its price changes. If you decide to trade DOT, you will be taking advantage of the low prices to buy and the higher to sell, constantly monitoring the market for good opportunities.
If you’re more patient and the emotions on the crypto market don’t move you easily, you can also invest in Polkadot and hold it for a longer time to potentially get bigger returns. That would mean that you’ll again buy DOT at a lower price but you won’t be selling it right away as the prices climbs up, you’ll wait for a longer time to potentially generate your more income. Since like all cryptocurrencies DOT is unpredictable, this may not prove as profitable as you’d may expect, but it’s worth noting that many crypto investors chose this strategy for digital assets.
You can make money out of DOT by staking it too, as we’ve already mentioned. As you can see, there are a few options how to earn from Polkadot and you can pick the one that works best for you.
What Are the Pros and Cons of Polkadot Crypto (DOT)
Cons of Polkadot Crypto
❌ Has yet to reach the capitalization and development of Ethereum, its main rival
❌ Relatively new asset in a market with very large competition
Is Polkadot Crypto Worth Following?
The Polkadot crypto has had very interesting price movements throughout the last two years, securing its place in the top 15 digital assets by market capitalization. The token uses the more advanced consensus mechanism technology, Proof-of-Stake, that allows its users to earn passive income and receive DOT tokens without having to invest in expensive equipment, like the one the Bitcoin mining requires. The token can also be used in its native blockchain.
The Polkadot blockchain brings further benefits to the project as a whole, as it provides for the quick and cheap transaction of data between blockchains. The multi-chain technology of the blockchain provides users with more benefits than older blockchains can provide. This makes Polkadot a worthy competitor of Ethereum, the most used blockchain at the moment.
The volatility of the DOT crypto may make some investors cautious about this digital asset. However, it may also be the reason for a potential price rise, once the crypto market recovers. The potential of the whole Polkadot network makes investors and crypto enthusiasts hopeful that this cryptocurrency will rise again and continue to grow in adoption, as its blockchain expands.
FAQs About Polkadot Crypto (DOT)
The Polkadot blockchain allows you to manage smart contracts but also create projects such as apps, websites and customized tokens. Its high speed of execution combined with common governance make it one of the best blockchains to invest in or work on as validators.
The Polkadot price is currently lower than its last year’s high, to the whole market’s sentiment. This could be a great opportunity to buy low and sell once it gets high. However, we can’t know for certain when or even if DOT will rise in value again. Investors can only be hopeful that the potential of the blockchain will bring positive change to the DOT crypto as well.
Many investors buy digital assets in hope of earning big returns. However, it’s one in a million change to get your million through crypto quickly, as it’s a very volatile investment vehicle. The same stands for DOT – you may be able to make money out of it, by trading, investing or staking the coin, but how much exactly, we can’t tell. This will depend on your investment strategy, how well you control your emotions, and the overall crypto market. Polkadot is a cryptocurrency with big potential and you can check it out if you’re interested, but we can’t guarantee for any profit that it can bring you with certainty.
Web 3.0 is expected to be the new era of the internet where the control is in the users’ hands. The connection between Polkadot and this concept comes from the fact that the DOT creator, Gavin Wood, coined the term in 2014. The term started gaining more attention in 2021, in particular in the crypto community, that is expecting digital assets to be a big part of the new internet era.