Types of Cryptocurrency

Must Look: Polkadot (DOT)

Polkadot (DOT)

Every new year, we see Polkadot (DOT) become more and more popular as an investment. There are investors who give their interest in Polkadot because of Polkadot (DOT)’s technology. In this article, we will take a look at Polkadot (DOT) from different aspects and try to find out the reason Polkadot (DOT) became so popular in such a short time.

Polkadot History

Polkadot (DOT) is a project that was created by the Web3 Foundation, and it is designed to be a blockchain protocol that enables scalability, security, and interoperability between different blockchains. Polkadot (DOT) has been one of the most anticipated projects in the blockchain space because of its ability to connect different blockchains together. Polkadot (DOT) was first announced in 2016 by its creator, Gavin Wood, who is also the co-founder of Ethereum.

Polkadot (DOT) raised $145 million in its Initial Coin Offering (ICO) in October 2017, which was the largest ICO at that time. Polkadot (DOT) has been one of the most successful projects in the blockchain space, and its token has been one of the best-performing cryptocurrencies in 2020.

The Polkadot Technology

Polkadot (DOT)’s technology is based on two main concepts: scalability and interoperability. Polkadot (DOT) is scalable because it can connect different blockchains together, which means that the total throughput of Polkadot (DOT) is not limited by the throughput of any single blockchain. Polkadot (DOT) achieves these objectives by using a relay chain, which is a central blockchain that connects different blockchains together.

The Polkadot relay chain is scalable because it can process multiple transactions simultaneously and is also interoperable because it can connect different blockchains together. Polkadot (DOT) also has a unique governance model that enables the Polkadot community to decide on the direction of Polkadot (DOT)’s development.

The DOT Token

The DOT token is the native token of Polkadot (DOT), which is used to pay transaction fees on the Polkadot relay chain. DOT tokens are also used for staking on the Polkadot relay chain, and DOT holders can earn rewards for participating in Polkadot’s governance.

The Polkadot ecosystem is growing rapidly, and there are many projects that are building on Polkadot (DOT). Some of the most popular projects that are built on Polkadot (DOT) include Kusama (KSM), Akropolis (AKRO), and Centrifuge (CTF).

Risks of Polkadot

Just like any other investment, there are risks associated with Polkadot (DOT).

The risks associated with Polkadot are the following:

  • Small Community: Polkadot (DOT) has a small community compared to other projects in the blockchain space. Polkadot (DOT)’s small community means that there is less development activity, and it also means that Polkadot (DOT) is more vulnerable to attacks.
  • Lack of Decentralization: Polkadot (DOT) is not fully decentralized because the Polkadot community has not yet reached a consensus on Polkadot (DOT)’s governance. This lack of decentralization means that Polkadot (DOT) is more centralized than other projects in the blockchain space.
  • High Risk-Reward Ratio: Polkadot (DOT) is a high-risk investment because it is a new project with a small community. Polkadot (DOT) also has a high potential reward because it has the potential to become the leading blockchain protocol.

Polkadot (DOT) is a risky investment, but it also has the potential to generate high returns.

Polkadot Use Cases

There are many ways to use Polkadot (DOT) because Polkadot (DOT) is a versatile blockchain protocol.

Here are where you can use Polkadot:

  • Decentralized exchanges: Polkadot (DOT) can be used to build decentralized exchanges because Polkadot (DOT) is interoperable.
  • Cross-chain transactions: Polkadot (DOT) can be used to make cross-chain transactions because Polkadot (DOT) is scalable.
  • Compliance and KYT: Polkadot (DOT) can be used for compliance and know-your-customer (KYC) because Polkadot (DOT) is compliant with the EU’s General Data Protection Regulation (GDPR).

These are some ways to use Polkadot (DOT), but there are many more.

Polkadot (DOT) Price

Polkadot price has a circulating supply of 987.58M with a market cap of $6,686,125,251.06 and a total supply of 1,103,303,471 DOT. DOT token serves as Polkadot’s staking token.

Token holders have the advantage of Polkadot’s governance since Polkadot aims to be a completely decentralized project. Polkadot’s tokenomics incentivizes DOT holders to become long-term Polkadot investors.

  • Token sale price: $30.60 USD (private sale), $33.00 USD (strategic sale)
  • Hard cap: Polkadot’s private and strategic sales had a hard cap of $145 million.
  • Private sale: Polkadot’s private sale was open to accredited investors and raised $35 million.
  • Strategic sale: Polkadot’s strategic sale was open to institutional investors and raised $110 million.
Polkadot (DOT) Mining Method

Mining Polkadot is different from mining other cryptocurrencies because Polkadot (DOT) uses a unique consensus mechanism called Proof of Stake (PoS).

External blockchains are one of the main Polkadot features, Polkadot relay chain can link to any other blockchain. Polkadot’s validators play a vital role in Polkadot’s ecosystem by maintaining the Polkadot relay chain and Polkadot’s parachains.

Here is how you can participate in mining Polkadot:

  • Join a Polkadot staking pool: Polkadot staking pools are one of the easiest ways to start mining Polkadot (DOT). You can join a Polkadot staking pool by using Polkadot’s official staking portal.
  • Run your own Polkadot validator node: You can also run your own Polkadot validator node. Polkadot validator nodes are responsible for maintaining the Polkadot relay chain and Polkadot’s parachains.
  • Become a Polkadot parachain: Polkadot parachains are one of Polkadot’s main features. Polkadot parachains can be used to build decentralized applications (dapps).

After following one of the Polkadot mining guides, you can start Polkadot mining. Polkadot protocol will automatically reward you with Polkadot (DOT) for your contributions to Polkadot’s ecosystem.

How to Trade Polkadot

If you want to trade Polkadot, you need to find a Polkadot exchange. Polkadot (DOT) is listed on many cryptocurrency exchanges, but not all cryptocurrency exchanges are created equal.

Here are some of the best Polkadot exchanges:

  • Binance
  • Huobi Global
  • OKEx
  • Kraken

These are some of the best Polkadot exchanges, but there are many more. You can find a full list of Polkadot exchanges on CoinMarketCap.

Once you have found a Polkadot exchange, you need to create an account and verify your identity. After you have verified your identity, you will be able to deposit cryptocurrency or fiat currency into your account.

Once you have deposited cryptocurrency or fiat currency into your account, you will be able to trade Polkadot. You can trade Polkadot for other cryptocurrency or fiat currency.

If you want to hold Polkadot for the long-term, you need to find a Polkadot wallet. Polkadot (DOT) is an ERC20 token, so you can use any ERC20 compatible wallet.

Here are some of the best Polkadot wallets:

  • Ledger Nano S
  • Trezor Model T
  • KeepKey
  • MetaMask

Aside from trading, you can also sell Polkadot (DOT) for fiat currency. You can sell Polkadot on many cryptocurrency exchanges, but not all cryptocurrency exchanges allow you to sell Polkadot for fiat currency.

You can buy Polkadot as well with fiat currency on some cryptocurrency exchanges. You can buy Polkadot with USD on Kraken and Coinbase.

Polkadot (DOT) Roadmap

The Polkadot roadmap is divided into five phases: Canopy, Kusama, Polkadot, Westend, and Moonbeam.

  • Canopy: The Canopy phase is the foundation of the Polkadot ecosystem. The Canopy phase includes the development of Polkadot’s relay chain and Polkadot’s parachains.
  • Kusama: The Kusama phase is Polkadot’s experimental network. The Kusama phase is used to test Polkadot’s features and upgrades before they are implemented on Polkadot’s mainnet.
  • Polkadot: The Polkadot phase is Polkadot’s mainnet. The Polkadot phase includes the launch of Polkadot’s mainnet and the activation of Polkadot’s parachains.
  • Westend: The Westend phase is the next phase of Polkadot’s roadmap. The Westend phase includes the development of Polkadot’s derivatives and Polkadot’s app store.
  • Moonbeam: The Moonbeam phase is the final phase of Polkadot’s roadmap. The Moonbeam phase includes the launch of Polkadot’s moonlight network and the integration of Polkadot with Ethereum.

The Polkadot roadmap is subject to change, and Polkadot may add or remove phases from the Polkadot roadmap in the future.

Final Say

Public and private chains are Polkadot’s two main features. This is something that other blockchains don’t have. Polkadot also has a very active development team and is backed by some of the biggest companies in the cryptocurrency space.

Parallel chains are Polkadot’s main selling point. Polkadot can process more transactions than Ethereum and Bitcoin combined. Polkadot is also much more scalable than Ethereum and Bitcoin.

Polkadot is a very ambitious project and has the potential to disrupt the cryptocurrency space. Polkadot is a project to keep an eye on in the future. Just remember that before deciding to invest in any Polkadot information, please consult with a financial advisor. Seek investment advice from a financial advisor because crypto space has a very volatile price movement.

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