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Polkadot (DOT) cryptocurrency: How it works and where to buy it in Sweden

Learn more about how Polkadot works, why the DOT token is useful and where to buy it.

Learn about DOT Learn more
Where to buy DOT Find DOT exchanges

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.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.
CryptocurrencyDOT
Circulating supply (approx. as of January 2021)954 million
Maximum supply1.04 billion
BlockchainPolkadot
PurposeProof-of-stake and governance

What is DeFi? Read the beginner’s guide.

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.

What does the DOT cryptocurrency do?

The Web3 Foundation, which is responsible for developing Polkadot, categorises the function of the DOT token into three categories: Governance, Staking and Bonding.

Governance

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.

Staking

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.

Bonding

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.

What to watch out for

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 buy DOT

Here’s a step-by-step guide to one way of buying DOT. Note that there might be other options available, so you may want to compare cryptocurrency exchanges to find the one that’s right for you.

1 - 20 of 21
Name Product Deposit methods Fiat Currencies Cryptocurrencies
FTX Cryptocurrency Exchange
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Cash, Credit card, Cryptocurrency, Neteller, Bank transfer (SEPA), SOFORT
EUR, GBP, CHF, USD

82
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A European exchange which enables users to pay in EUR, GBP, CHF and USD through a variety of payment platforms.
Bit.com Cryptocurrency Exchange
Bit.com Cryptocurrency Exchange
Cryptocurrency
USD

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Start trading options, futures and perpetual contracts now! New users get up to $245 in trading coupons.
Binance Cryptocurrency Exchange
Bank transfer (ACH)
USD, AUD, GBP, EUR, RUB, TRY, NGN, UAH, PHP, CZK & 20+ more

366
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Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US.
UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
eToro Cryptocurrency Trading
Bank transfer, Debit card, Neteller, PayPal, Online banking, Skrill
EUR, GBP, NZD, USD, AUD, CAD, HKD, SGD, CHF, NOK & 5+ more

62
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Disclaimer: Volatile investment product. You should consider whether you can afford to take the high risk of losing your money.
Copy the trades of leading cryptocurrency investors on this unique social investment platform. $50 minimum deposit.
Kriptomat Cryptocurrency Exchange
Credit card, Neteller, SOFORT, Skrill, SEPA
EUR, USD, GBP, BGN, HRK, CZK, HUF, PLN, SEK, TRY

354
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Buy a large selection of cryptocurrencies instantly via credit card or bank account after registering. Store your crypto conveniently in Kriptomat's multi-currency wallet.
Changelly Crypto-to-Crypto Exchange
Credit card, Cryptocurrency
USD, GBP, EUR, CAD, MXN, HKD, RUB, NZD, SGD, JPY & 40+ more

156
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Access competitive crypto-to-crypto exchange rates for 150+ cryptocurrencies on this global exchange.
Okcoin Cryptocurrency Exchange
Okcoin Cryptocurrency Exchange
Bank transfer (ACH), Epay, Credit or Debit Card, SEPA, Prime X
USD, EUR, SGD

68
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Get $50 worth of BTC when you buy $3000 or more in crypto.
Buy, sell and earn cryptocurrency with this user-friendly exchange and smartphone app.
KuCoin Cryptocurrency Exchange
KuCoin Cryptocurrency Exchange
Cryptocurrency, PayPal, Wire transfer, Credit or Debit Card, SEPA
USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND & 40+ more

576
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Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
Gate.io Cryptocurrency Exchange
Cryptocurrency
USD, EUR, GBP, HKD, SGD, AUD, CHF, MXN

1070
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Finder exclusive: New users get $90 worth of Gate.IO points and an airdrop of $5 in GateTokens if trade volume exceeds $100 in their first week. T&Cs apply.
A feature-rich exchange with over 1,000 tokens including derivatives, yield farming and lending products.
Bybit Cryptocurrency Exchange
Bybit Cryptocurrency Exchange
Cryptocurrency, Simplex, Banxa, XanPool, MoonPay, Mercuryo, E-check, Legend Trading, Capitual
USD, AUD, CAD, EUR, GBP, NZD, HKD, JPY, SGD, PHP and more

184
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Disclaimer: Highly volatile investment product. Your capital is at risk.
Buy, sell, trade and earn hundreds of cryptos on this full-featured global trading platform.
Kraken Cryptocurrency Exchange
Bank transfer, Cryptocurrency, Wire transfer, Osko, SEPA, Apple Pay, Google Pay, SWIFT
USD, EUR, GBP, JPY, CAD, CHF, AUD

131
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Buy, sell and trade a range of digital currencies on this high-liquidity exchange – suitable for beginners right through to advanced traders.
Wirex Cryptocurrency Exchange
Wirex Cryptocurrency Exchange
Credit card, Cryptocurrency, Debit card, Bank transfer (SEPA), SWIFT
EUR, GBP, CAD, CZK, HUF, PLN, RON, HRK, USD

37
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Get a Welcome Bonus of USD 15 in WXT when you sign up with Wirex through Finder. T&Cs apply.
Spend a range of cryptocurrencies anywhere Visa is accepted with the Wirex Crypto Card and earn rewards.
Coinbase Digital Currency Exchange
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Crypto.com App
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Credit card, Cryptocurrency, PayPal, TransferWise, SEPA
USD, AUD, CAD, CHF, EUR, GBP, NZD, SGD, JPY, ZAR & 9+ more

255
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Buy 240+ cryptocurrencies, earn up to 14.5% p.a. on holdings, pay with your crypto for cashback at stores, get loans and more with this complete crypto-finance platform.
Gemini Cryptocurrency Exchange
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Bank transfer (ACH), Debit card, Wire transfer
USD, SGD, HKD, GBP, EUR, CAD, AUD, COP

105
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Get USD 25 in BTC when you trade USD 100 within 3 days of signing up. T&Cs apply.
Execute multiple trade types with no fees on cryptocurrency and wire transfer deposits on this exchange.
Paybis Cryptocurrency Exchange
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Bank transfer, Cryptocurrency, Neteller, Skrill, Credit or Debit Card
EUR, GBP, USD, AUD, CAD, PHP, SGD, CHF, HKD, JPY & 30+ more

404
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Buy Bitcoin and other popular cryptocurrencies with credit card or debit card on this digital cryptocurrency exchange.

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306
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Earn US$10 in BTC when you refer a friend and they purchase $100 of cryptocurrency. T&Cs apply.
Listing over 290 cryptocurrencies, OKX offers its users a variety of payment methods and coins to choose from.
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107
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GBP, EUR

192
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BC Bitcoin is a UK-based cryptocurrency brokerage that buys and sells more than 100 different cryptocurrencies.
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