Polkadot or simply referred to as DOT by crypto purists, is an open-source protocol comprised of a multichain architecture applying a unique sharding mechanism that facilitate the cross-chain interoperability of its data, token and even asset types. These set of methods makes it possible for Polkadot to make a wider range of blockchains to be compatible with each other.

Polkadot is one of the latest assets that's getting the attention of the cryptocurrency market and the good news is that this can be traded on eToro. If you want to learn how it works in more detail and how to invest on it, make sure to read on!

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Polkadot's DOT native coin (also quoted as DOT1 in some websites and exchanges) made its debut in August 2020 at $2.27. The platform was co-founded by Gavin Wood, Robert Habermeier and Peter Czaban a few years earlier in 2016. In 2017, Polkadot made its first token sale in raising a total fund of 485,332 ETH. From only 197 members in 2019, its development community almost doubled to 388 in 2020.

Polkadot logo
Polkadot logo

You must know that cross-chain interoperability was previously thought of as impossible but Polkadot did just that.

What is Sharding?

Sharding is an architecture database pattern almost similar to "horizontal partitioning". This involves separating a row from a table into multiple tables known as partitions. Each partition has its own columns, different rows but the same schema.

What Makes Polkadot Different?

  • Polkadot can communicate with other networks: Unlike the growing but also getting slower Ethereum (ETH), Polkadot has been developed not only to provide faster processing time but also to become more scalable. This makes it possible for the DOT to work seamlessly with other network and allow developers to create applications that are used by both the Bitcoin and Ethereum blockchain.

  • Polkadot shares a brain trust with Ethereum: Dr. Gavin Wood was formerly Chief Technology Officer of Ethereum before he moved on to become Polkadot's co-founder. Along with co-founders Habermeier and Czaban, it comes as no surprise to see the DOT achieving industry leading distributed technology and cryptography.

  • Polkadot's parachains lessens congestion: In order to speed up processes and free up its network, Polkadot's technology maximizes parachains in creating a mini blockchain for each application that is connected to the main chain. In the physical world, think of side streets that take away vehicular traffic from congested main roads.

Polkadot in a Nutshell

  • It allows cross-blockchain transfers of any type of asset or data, not just DOT and crypto tokens.
  • It can upgrade, introduce new features and integrate even without hard forks. This allow Polkadot to easily adapt to incoming new technology.
  • It has an almost unmatched scalability by using sets of validators to secure numerous blockchains. This result into added transaction security and speed through several parallel blockchains.
  • It provides security for everyone.
  • It has developed a framework called "Substrate" that creates custom blockchains within minutes. This gives Polkadot great security and interoperability.
  • It gives stakeholders a strong voice in its system governance.

In case you don't know:
Substrate is a framework for developing blockchain that simplifies processes involving upgrading, creating, experimenting and deploying a variety of application-specific blockchains.

Polkadot's Crypto Ranking

When comparing the DOT to other cryptocurrencies, it ranks among the list of most valuable ones based on total market capitalization.

The DOT Coin

The DOT coin is the native currency of the Polkadot network. Aside from its used in electronic payment system, the DOT is also used during governance decision-making, voting, tabling proposals and bonding.

Currently, there are around 1 billion DOT tokens allocated for circulation after the network went on redenomination from the original circulation of 10 million in August 2020.

The redenomination was made in order to make calculations easier by getting rid of the use of small decimals.

The DOT's governance is composed of:

  1. Council Members
  2. Technical Committee

Recently, the council approves a key parachain proposal to enable crowd loan for developers and registration. This motion will allow developers to find funding for future projects and register parachains.

What Does the DOT Solves?

Choosing to focus on the biggest issue hounding blockchain technology today: interoperability, Polkadot just succeed on that.

Before the arrival of Polkadot, the crypto world is limited by compartmentalization where blockchains operates like different islands of data with almost no way of relaying information to other networks. Polkadot solves that problem by implementing several cross-chain and network technologies. The DOT made it possible to transfer information from public networks to private blockchains and vice versa.

Polkadot trading on eToro's platform
Polkadot trading on eToro's platform

How to Buy DOT?

The easiest way to buy and invest on DOT is through a broker or a trading platform. Especially useful for those beginning to invest on cryptocurrencies are trading platform apps like eToro.

How to Trade Polkadot on eToro?

You can invest on Polkadot via eToro's online trading platform. Once you have opened an account and made your first deposit, follow the very basic steps below:

  1. On your eToro dashboard, click "Discover".
    Clicking "Discover" on eToro
    Clicking "Discover" on eToro
  2. Select "Crypto".
    Selecting "Crypto" eToro's platform
    Selecting "Crypto" on eToro's platform
  3. Scroll down to look for "DOT".
    Looking for DOT on eToro's list of crypto assets
    Looking for DOT on eToro's list of crypto assets
  4. Click "Buy" and set the amount you want to invest.
    Buying Polkadot (DOT) on eToro's platform
    Buying Polkadot (DOT) on eToro's platform
  5. "Click "Open Trade".
    Executing DOT buy order on eToro
    Executing DOT buy order on eToro

The eToro Wallet for Storing Polkadot

If you’re concerned about losing your DOT coins, you can download the eToro wallet for free on Android or iOS. The crypto wallet provides high-level security and can be downloaded for free.

eToro Wallet app
eToro Wallet app

One of the more popular features of eToro is its cryptocurrency wallet. It's a secure and accessible multi-cryptocurrency digital wallet for storing over 120 cryptocurrencies, including DOT. Via this crypto wallet you can buy, store, receive and transfer all your cryptocurrency effortlessly.

Is Polkadot the Right Crypto for You?

Judging by the revolutionary platform of Polkadot, especially its capability to provide interoperability and a more scalable network, the future is bright for Polkadot. However, it is important for you as an investor to study more about this cryptoasset before investing on it.

The risks associated with trading cryptocurrencies like Polkadot are mainly based on its volatile nature. They are speculative and you should know what you're getting into before investing in these types of assets. Changes in market sentimen can lead to sharp drops or increases in value.

Interested now to trade Polkadot? Get started here.

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