DOT is the native token of the Polkadot network.
Polkadot is a unique network which allows the transfer of data, money and assets between different blockchains.
Polkadot is different from other networks such as Ethereum, as it uses various blockchains instead of smart contracts, allowing developers a more granular approach to design. DOT tokens are the native currency of the Polkadot ecosystem and are used for proof-of-stake and governance.
How to buy DOT
Follow these steps to purchase your first Polkadot.
- Compare crypto exchanges
The easiest way to buy Polkadot is from a cryptocurrency exchange. Use our comparison table to find an exchange with the features you want such as low fees, ease of use or 24-hour customer support.
- Create an account
To create an account on an exchange you will need to verify your email address and identity. Have some photo ID and your phone ready.
- Make a deposit
Once verified, you can deposit AUD using the payment method that best suits you – Bank transfer, debit card, wire transfer and credit cards are all widely accepted.
- Buy Polkadot
You can now exchange your funds for Polkadot. On easier-to-use exchanges, this is as easy as entering the amount you want to purchase and clicking “buy.” If you like you can now withdraw your Polkadot to your personal wallet.
Where to buy DOT in the Philippines
Compare exchanges that list the DOT token on things like payment methods, fees and features.
A step-by-step guide to buying Polkadot
Want to buy DOT? Follow these simple steps:
Step 1. Create an account on a cryptocurrency exchange that allows you to trade DOT
Compare exchanges that support DOT, then determine if the exchange you choose supports buying DOT with Philipines pesos (PHP), Bitcoin (BTC) or Ethereum (ETH). You’ll need to provide your email address and create a password to register for an account.
- Note: It’s also recommended that you set up two-factor authentication to provide an extra level of security.
Step 2. Deposit funds into your account
Many cryptocurrency exchanges only allow trading between cryptocurrencies and don’t allow the direct deposit of fiat currency, such as PHP, so you’ll usually need to own or buy BTC or ETH first.
- Note: The exact process for depositing funds into your account varies depending on the exchange you choose.
Step 3. Buying DOT
The final step is to trade your chosen currency for DOT on the exchange. Once again, the exact process you need to follow may vary slightly depending on the exchange you choose.
Which wallets can I use to hold DOT?
Unless you’re looking to place a trade, storing cryptocurrency in an account on an exchange is not recommended. Instead, it’s generally much safer to store your DOT in a secure wallet.
How does Polkadot work?
At Polkadot’s core is a universe of blockchains, both public and private, which can all interact with each other through a process known as interoperability. Instead of using smart contracts to run applications, Polkadot uses parallel blockchains, known as parachains, to serve a similar purpose. Whereas a developer on Ethereum would use a collection of smart contracts to program a dapp, developers on Polkadot use parachains instead.
By programming individual blockchains to host dapps instead of smart contracts – which are bound to the parent blockchain’s rules – developers are able to exercise greater control over design, including key features such as speed, fees and whether data is public or private. Smart contracts are still supported on Polkadot, although they must exist within a parachain.
For example, a bank might want to host customer data on a private blockchain that only employees can alter. Customers could then access this data using a third-party payments app which operates on a public blockchain. Permission to access either parachain could be moderated by a digital ID held on a smart contract parachain.
Tying these parachains together is the relay chain, which can be thought of as the central blockchain within Polkadot. By managing a network of parachains from a central relay chain, friction is reduced, enabling a faster and more efficient network for both the user and those that operate it.
|Circulating supply (approx. as of January 2021)||954 million|
|Maximum supply||1.04 billion|
|Purpose||Proof-of-stake and governance|
What does the DOT cryptocurrency do?
The Web3 Foundation, which is responsible for developing Polkadot, categorizes the function of the DOT token into three categories: Governance, Staking and Bonding.
Governance is the process whereby DOT token holders are given the ability to vote on how the blockchain is managed. For instance, token holders may vote on things like protocol upgrades and changes to the relay chain. Votes are proportional to the amount of DOT token a user has staked.
In the event that a DOT token holder does not exercise their right to vote, their stake will be allocated to a special council of 6-24 members who are elected to vote on behalf of absent DOT holders.
Polkadot uses a proof-of-stake mechanism which means that DOT holders can lock up their tokens and help secure the network, in return for staking rewards.
Staking can be performed in one of two ways, either by acting as a nominator or a validator. Both nominators and validators receive rewards for their participation.
Nominators will be the most common type of stakers on Polkadot, as their role is essentially limited to electing validators.
Validators on the other hand perform a critical role in the health of the network. Validators run a node which operates 24/7 to validate transactions on the network and ensure its efficient operation.
Additional tokens will also operate on the Polkadot network, similar to how Ethereum supports tokens such as the famous ERC-20 token standard.
Lastly, DOT can be used to launch new blockchains on the network, known as parachains. In order to launch a parachain, DOT must be deposited in a process known as bonding. If a parachain is retired, DOT tokens are returned.
Key factors to consider when buying DOT
Polkadot is a relatively new blockchain, which employs novel technology that has not yet been tried and tested compared to more established chains like Ethereum or EOS.
While the consortium of projects behind the development of Polkadot is highly experienced, the commercial success of the platform remains to be seen. Furthermore, Polkadot operates in a saturated marketplace against operational projects which have had several years to capture market share.
How to sell DOT
To sell the native DOT token find a cryptocurrency exchange that it is listed on. This could be a centralized or decentralized exchange. You will then need to follow a similar process to that depicted in Step 3 above. Select the cryptocurrency, stablecoin or fiat currency you would like to exchange your DOT tokens for. Once you have found an exchange pairing you are happy with, look for the ‘Sell DOT’ button and enter the amount you wish to sell.
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