How to buy Polkadot online
This beginner’s guide will introduce you to Polkadot, how it works, and the network behind the coin. You can find out how to buy DOT coins and what makes them different before you decide to invest.
Compare where to buy Polkadot, and open an account
If you want to buy Polkadot straight away, you can do so using the links below. We’ve reviewed the top brokers to help you find the one that best meets your needs. Otherwise, keep reading to learn more before you decide to invest in Polkadot.
What is Polkadot?
Polkadot is a platform where developers can build a decentralised internet. Rather than building traditional websites, developers can create apps on Polkadot that store transactions and contracts on a publicly searchable blockchain. On Polkadot, all these apps are independent, free from any restrictions that would be put in place by middlemen like website hosts or broadband providers on the regular web.
Polkadot was founded by Dr. Gavin Wood, who co-founded the original Ethereum project. Polkadot is one of a host of cryptocurrencies expanding on the work done by Ethereum to create a platform that can cope with the demand and speed that would be required to bring the technology into mainstream use. Cardano, also founded by a member of the original Ethereum team, Algorand, and Zilliqa are just a few of the platforms trying to achieve a similar goal.
The DOT token was first launched during an initial coin offering in 2017 and became tradeable on most exchanges in August 2020. Since its exchange listing, it has become one of the most popular coins on the market. The Polkadot team also released the Kusama network at the same time, where project developers can test applications before launching on the main system.
How does Polkadot work?
Polkadot works by splitting its blockchain into a series of smaller chains that can add transactions at the same time. By processing its transactions in this way, Polkadot solves one of the biggest weaknesses of the Ethereum blockchain: speed. With many chains operating at the same time, Polkadot can process up to 1000 transactions per second, well beyond the capacity of Ethereum.
Polkadot has also solved another problem, which is the fact there are hundreds of cryptocurrencies and platforms that work in isolation and can’t communicate. It introduces ‘bridges’, links between its platform and the outside world. With a bridge, someone could use Bitcoin to pay for transactions on the Polkadot platform, a huge step forward from early generation blockchain technology.
To build on Polkadot, developers will need to use DOT to ‘buy’ or ‘lease’ a slot to build on. Those slots are going to be limited and once tokens are spent on the slots, they’re locked in for the duration of the lease, reducing the amount of DOT on the open market. Anyone who holds DOT can also stake it to help validate these new builds and earn rewards for contributing.
How to buy Polkadot online – a step-by-step guide
Step 1. Find an exchange to buy Polkadot
You can buy Polkadot from online crypto exchanges. You’ll need to go to an exchange and transfer your cash into a cryptocurrency that you can then use to buy Polkadot. You can learn more about how to do so in our cryptocurrency guides.
If you’re looking for where to buy Polkadot immediately though, here are two of the top exchanges that offer DOT:
- Binance: One of the biggest names in the cryptocurrency trading space, Binance allows users to trade hundreds of different cryptocurrencies, including Polkadot. Open an account right now.
- ChangeHero: A user-friendly brokerage that’s ideal for quickly exchanging one coin for another, without having to go through the usual registration and account verification process. You can open a ChangeHero account today.
Step 2. Sign up and fund your account
When you use a cryptocurrency exchange you normally have to sign up for an account before you can fund your trades. This usually means providing some identification, that varies from platform to platform but can mean a copy of a photo ID.
Most exchanges accept deposits in fiat currency, although some still can only be funded with cryptocurrency. To buy Polkadot, you’ll need to buy another cryptocurrency, like Bitcoin, first. If you use one of the exchanges listed above, you can transfer your fiat currency into crypto, then use that to buy Polkadot.
Step 3. Buy Polkadot
Once you’ve created and funded your exchange account, you’ll be able to swap the cryptocurrency in your account for DOT. If you’ve loaded your account with Bitcoin then you will want to find the current price of Polkadot in the DOT/BTC crypto pair on the exchange and execute your trade.
Step 4. (Optional) Get a suitable wallet
You can get your own Polkadot wallet and transfer your coins into it for added security. You don’t have to do this, and most exchanges will let you hold coins within your account. The only real reason to consider this is if you’re planning on buying and holding a large amount of Polkadot for the long term. If you do decide to use a wallet, here are two of the top options around:
- Freewallet: An online cryptocurrency wallet that you can access through your browser or with an app on your phone. Freewallet has wallets for over a hundred different cryptocurrencies. Join Freewallet today >
- Nebeus: With Nebeus you can store your coins offline in a secure hardware wallet. That means they’re protected even if you connected to a computer that’s been infected with malware. Sign up for Nebeus now >
How to trade Polkadot – a step-by-step guide
Step 1. Find a broker
First, you need to make sure you can trade Polkadot with your broker of choice. Most of the top brokers offer a range of cryptocurrencies along with assets you can trade, like stocks, forex, and commodities, but you might find Polkadot isn’t available yet. Two of the leading crypto brokers around that are worth trying are eToro and Plus500.
Step 2. Deposit money
Most brokers let you use fiat currency (like GBP, EUR, and USD) to fund your account and trade crypto. You should take into account the trading fees each broker charges on every trade to make sure you get the best value for your money.
Step 3. Decide how you’d like to trade
The most common methods for trading with an online broker are spread betting and contracts for difference (CFDs). You can check out our free online courses to understand more about what each involves, and which one is best for you.
Step 4. Start trading
When your broker account is set up, you’re ready to start trading. We recommend that beginners start out with a demo account to learn how to trade cryptocurrency and understand the market without the risk of losing money.
Once you start trading you can decide to go long or go short. If you think an asset will go up, you take a long position. If you think it will go down, you take a short position. When you short an asset you’re selling it early and hoping to buy it back later at a lower price, making a profit on the difference.
Another trading strategy is to trade with leverage. Beginners should avoid doing this as it carries a much higher risk of losing money if the market moves the wrong way. For more experienced traders, using leverage lets you make large trades with just a small amount of the trade value (the margin).
You should always take time to think over any potential investment, and this is especially true when it comes to cryptocurrency. Here are some pros and cons to consider when it comes to investing in Polkadot, along with some key questions to think about below.
- Polkadot has quickly established itself as a popular cryptocurrency
- It’s been developed by well-regarded, big names in crypto
- Has already done deals with independent developers to build on its platform
- As DOT is required to build on the platform, more development should push the price up
- The launch of Ethereum 2.0 is direct competition, while there are a huge amount of other platforms trying to do the same thing
Finally, here are three more questions you should think about. These should help you decide if you want to invest in Polkadot.
1. Is it a good time to buy Polkadot?
If you want to invest in DOT to show support for the network or to exercise the voting rights that come with owning the coins, it’s a good idea to invest. Otherwise, the decision rests on what your goals are. Long term investors should look for more developers signing up to build their apps on Polkadot, while short term traders can try to benefit from price volatility.
It’s worth remembering that blockchain technology moves fast and more competition could spring up at any time. All cryptocurrencies can be sensitive to market sentiment and that’s especially the case for ones like Polkadot with lots of competitors. If you want to hold DOT for the long-term, it’s worth staying on top of the latest developments with the latest analysis. You can find that below:
Polkadot (DOT) price corrects after gaining 100%
Polkadot (DOT) price explodes over 50%
Polkadot (DOT) price prediction for December
2. What problem does Polkadot solve, and what are the coin’s investment prospects?
Polkadot is trying to solve the issues that have held blockchain technology back so far. Most notably, these are transaction bottlenecks and the difficulty of sharing data between isolated blockchains. Polkadot perform many transactions simultaneously, can transfer data internally, and build bridges that connect it to external blockchains.
DOT’s prospects are linked to the success of the platform. If the Polkadot network entices more developers, it could increase demand for the rest of the DOT in circulation. The aim is to have 80% of the DOT in existence locked up within Polkadot, cutting the supply of DOT on the market in the first place. Polkadot has also been able to get the jump on some competition that remains in theoretical mode. The Polkadot platform is live and doing deals to bring new developers on to start building.
There are still challenges for Polkadot to overcome, however. The main one comes in the form of Ethereum 2.0. Many of the problems Polkadot is trying to solve are also being addressed by its bigger-name rival in an update that’s being rolled out over the next couple of years. If Ethereum 2.0 is a success, Polkadot could find it difficult to convince developers to keep working on its own network. You can stay on top of all the latest news below:
Polkadot crashes to $13 as the crypto market retraces: What’s next for DOT?
Polkadot (DOT) announces layout for Parachain launch
Polkadot (DOT) pushing past $30: Here’s what to expect
3. Do you want to hold Polkadot for the long term?
Whether to invest in DOT for the long-term depends on if you believe in the Polkadot network and its future prospects for success. It is already one of the largest cryptocurrencies by market cap and the network is backed by established names in the industry, like Gavin Wood. This could help DOT maintain its value over the long term.
Considerations for a long term investment strategy
If you think that Polkadot’s best days lie ahead and you want to get in on the ground floor, then you’ll want to sign up for a reliable cryptocurrency exchange and buy some coins right away. Depending on how long your time horizon is, you might also consider getting a personal wallet to hold your coins.
Considerations for a short term trading strategy
If you’re aiming to trade Polkadot quickly in order to profit from fluctuations in the crypto market, then the overall strength and long term trend of the coin’s price doesn’t matter so much. The important thing to do is make sure you understand technical analysis and indicators and sign up with a broker that offers low trading fees. Anticipating price movements by reading a variety of charts accurately gives you the best chance of trading success.