Polkadot (DOT) Crypto Review 2024: A Complete Guide

€ 7.1453

0.7858
Dernière mise à jour à 05:02:05 UTC
Market Cap
€ 9,533,029,556.34
Fully Diluted Market Cap
€ 9,533,029,556.34
Volume
€ 109,477,736.12
Circulating Supply
1.33B DOT

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Last updated at 05:15:05 UTC

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Want to invest in crypto? If you want to choose a well-established crypto, we advise you to choose among the world’s cryptos in the top 20. That is, the 20 cryptos with the largest capitalization in the world. 

The capitalization level is a parameter often demonstrating that the project is based on solid and reliable foundations. In addition, it also shows that the developers brought together many investors and buyers around them. This is the case of the Polkadot crypto. 

But what is Polkadot crypto? How do you buy Polkadot? How does the future of Polkadot look like? We shall explain everything to you in this guide.

What is Polkadot?

polkadot crypto

The Polkadot cryptocurrency has its blockchain. The coin that allows the Polkadot ecosystem to function is called the DOT. When writing this guide, the Polkadot network ranks 12th in the world in capitalization, with more than 6.5 billion euros. The price of Polkadot is close to four euros at the moment. 

But what is Polkadot? As mentioned above, it is a blockchain. Nonetheless, you must take heed, as it is not just any regular blockchain. Indeed, Polkadot has the particularity of being a layer 0 or level O blockchain. So, what exactly is it?

Blockchains are classified according to three current levels: 0, 1, and 2. Some blockchains are layer 1. This is the case with Bitcoin (BTC), Cardano (ADA), Dogecoin (DOGE), or even Ethereum (ETH). These are functional blockchains because they can process transactions and run smart contracts. 

On the other hand, they are independent; that is to say, they are incompatible. Some layer one blockchains accommodate so-called layer two solutions, which make it possible to streamline traffic. This is the case of the Polygon solution (layer 2), which is based on Ethereum.

A layer 0, like Polkadot, is a blockchain architecture that allows you to build chains that are compatible with each other. Concretely, Polkadot is a blockchain on which other blockchains, also called parachains, are built. The Polkadot network ensures their interoperability. Cosmos (ATOM) and Algorand (ALGO) are other blockchains competing with Polkadot.

Coinbase

  • Regulated exchange
  • An easy-to-use platform
  • Free crypto training offered

The History of Polkadot

The history of Polkadot dates back to 2016 when the crypto white paper was published. Behind Polkadot, we find a particular person, Dr. Gavin Wood – the Polkadot founder. If this name doesn’t mean anything to you, you should know that he is the co-founder of the Ethereum network.

He also created the Solidity language, used on the Ethereum blockchain. Gavin Wood teamed up with Jutta Steiner (another person poached from Ethereum) to launch Parity Technologies, which is in charge of Polkadot developments. The Web3 foundation is responsible for managing the Polkadot network.

polkadot crypto

The history of Polkadot leads us to mention another “cousin” blockchain, Kusama. Like any project, the developers carried out a testnet before launching their blockchain into production. Then, they launched the blockchain on a “canary network” called Kusama. What is this “canary network?” The name refers to the birds (canaries) the miners used in the mines. Miners sent canaries into the mines to check that the level of toxic gas was acceptable. Similarly, this “canary network” or Kusama was used by developers to validate their code while protecting users.

Over time, Polkadot took off. Currently, Kusama and Polkadot are two independent blockchains. Although they are cousins, they have somewhat different characteristics. Developers still use the Kusama blockchain to test specific updates intended for Polkadot.

Why was Polkadot designed? 

Referring to the Polkadot white paper, Gavin Wood identified two difficulties in the blockchain market. So, from the start, Gavin Wood wanted Polkadot to provide a solution in the area of “scalability” and “isolatability.”

Scalability defines the ability of a blockchain to handle increased transactions. This indicator is measured in TPS, Transactions Per Second. Scalability is still difficult at specific blockchains, but this was even more true when the Polkadot white paper was published. At that time, as explained by Gavin Wood, most blockchains were processing around 30 TPS.

What about “isolatability?” As explained above, Polkadot is a layer 0 blockchain. In fact, from the start, the creation of Polkadot started from observation. Gavin Wood understands that there are many blockchains. On the other hand, the need for interoperability would quickly be lacking. Indeed, the need for blockchains to communicate with each other was seen as a challenge for the future of Gavin Wood.

Coinbase

  • Regulated exchange
  • An easy-to-use platform
  • Free crypto training offered

How does Polkadot work?

As explained above, the philosophy of Polkadot is to connect several blockchains, called parachains. Interoperability between these chains is ensured via a bridge. How does it work? The polkadot plays the role of a central organ. In this way, it does not intervene in the functioning of parachains. Concretely, each parachain is independent and operates according to the validation and consensus system chosen by the developers.

Polkadot only increases when a parachain wants to transact with another parachain. In fact, Polkadot manages the interaction between these two chains and plays the role of verifier. Concretely, it is the judge between the two parachains. Polkadot verifies that the smart contract is applied correctly. For example, Polkadot verifies that the money is sent to the correct recipient. This is where verifiers on Polkadot come in. So, let’s now talk about the validation system present on Polkadot.

The consensus protocol on Polkadot is NPOS or Nominated Proof-of-Stake. If you follow crypto, you are familiar with POS or Proof-of-Stake. This mechanism is in force on many blockchains, such as Cardano (ADA), Solana (SOL), and now Ethereum (ETH). With a POS, the validator is selected based on the number of tokens it stakes. However, there are several derivatives of the POS.

For example, you have the DPOS or Delegated Proof-of-Stake. This mechanism was created to reduce the number of nodes in a blockchain network to a small number of validators. The validator is chosen during a vote. For example, you can vote for a validator who promises to give you back a share of the reward obtained following mining. Also, it is only sometimes the one with the most staked tokens who validates the transaction.

Polkadot, for its part, uses NPOS, Nominated Proof-of-Stake. This protocol ensures a better level of security. With NPOS, the person (the Nominator) votes for a validator. Unlike the DPOS, its vote binds it. Concretely, if the person votes for a validator who turns out to be dishonest (for example, who falsifies a transaction), he will be punished, and a certain number of tokens will be withdrawn. The NPOS, therefore, makes it possible to make people responsible when voting. The choice of the validator is, therefore, no longer made only based on promises of earnings but also, above all, on the reputation of the validators.

Where to buy Polkadot?

polkadot crypto

Are you interested in Polkadot? But how to buy Polakdot? The simplest is to use an exchange platform (also called exchange). Since cryptocurrency works in a decentralized way, you can’t just go to the bank to buy it. Crypto platforms thus play the role of crypto banks. These online platforms allow you to buy, sell, and trade cryptos with each other.

How to buy DOT on an exchange? Regardless of which platform you want to use, the process is always the same. The first step is to register on the exchange. This setup is free. Typically, you need to provide some personal information. The exchange will verify your email address.

Once you have your account, you must connect your crypto wallet. The wallet plays the role of a crypto bank account. It is a medium on which you store cryptos. There are two leading families of wallets. Cold wallets are hardware supports that resemble USB keys. These media are more difficult to use but guarantee the best level of security since they do not store your cryptos online. The other big family is hot wallets. These are mobile applications or internet extensions that store your cryptos online.

After you complete these two steps, you are ready to buy Polkadot. Two methods are available to you:

  • Directly purchase Polkadot in fiat currency with your bank card or by transfer. This solution is only sometimes available on exchanges.
  • Deposit money on the exchange, then purchase Polkadot by choosing the right trading pair (EUR/DOT).

Binance

  • Low fees
  • One of the largest crypto exchanges
  • Fee discount for using native BNB

With Polkadot being among the top 20 crypto in the world, most crypto exchanges list the crypto. To buy Polkadot, you can, for example, use one of the following three crypto exchange platforms: 

  • Binance: The Binance exchange is the world leader. In addition to offering the exchange of cryptos, the platform offers a whole range of crypto services such as Binance Earn, Binance Academy, Binance Card, etc. Furthermore, the exchange has its blockchain, BNB.
  • Coinbase: The platform is a big name in crypto. Coinbase has nearly 89 million users worldwide. The exchange was established in 2012 and went public in April 2021.
  • Kraken: The platform has more than 6 million users worldwide and has a capitalization of 10 billion dollars. The exchange was created in 2011 and is located in San Francisco. In addition to providing crypto exchange services, Kraken offers the possibility of staking.

Coinbase

  • Regulated exchange
  • An easy-to-use platform
  • Free crypto training offered

These three platforms are equal in terms of services. If you are new to the crypto ecosystem, we advise using the Binance exchange. The interface is very well done, and the exchange has many services that allow you to explain the fundamentals of crypto.

Polkadot Fear and Greed Index

Updated:: 24 February 2024

Now: 78 Extreme Greed

Now: 78 Extreme Greed

Yesterday: 78 Extreme Greed

Last Week: 70 Greed

Polkadot is the epitome of modern blockchain technologies and presents a valuable investment into the future of the industry. As such, it is crucial to identify the right moment to invest in the token and when to take a step back. This is a difficult decision because the crypto market has many moving parts, all of which can affect prices. 

The Fear and Greed Index for DOT thus becomes a strategic tool for investors looking to harness market sentiment to their advantage. This index gauges market sentiment, providing insights that can be instrumental in identifying potential trading opportunities in the world of Polkadot.

For those trading the Polkadot market, the Fear and Greed Index acts as a guide, helping investors make more informed decisions amid price fluctuations. When the indicator shows high levels of fear in the market, it means that the market may be oversold and that volatility is high. 

This is a typical indication that a reversal may occur to the upside, and that the opposite is true when the indicator shows extreme levels of greed. Of course, you shall need to confirm this signal using other fundamental and technical analysis strategies, but the Fear and Greed Index becomes a great starting point.

Is Buying Polkadot a Good Investment in 2024?

Polkadot is undoubtedly one of the cryptos with a future. Additionally, the price of DOT is often underestimated. The record price of the DOT coin dates from November 4, 2021, with a price ofmore than fifty dollars. As a reminder, when writing this article, Polkadot’s price in USD is had fallen significantly, as seen on the Polkadot chart on Trading View. 

That being said, what would become of Polkadot’s value? What is the Polkadot forecast saying? Will Polkadot go up? Will Polkadot recover to its former all-time high? Polkadot price predictions are primarily optimistic, with a target of several hundred euros.

Our Final Opinion on Polkadot

Polkadot is a cryptocurrency that deserves to be known. Indeed, as explained in this guide, crypto DOT has real ambition. In fact, its ambition is twofold and corresponds precisely to what the blockchain market needs. The Polkadot network intends to provide a solution in terms of the scalability and interoperability of blockchains.

Currently, many blockchains exist. As with internet search engines in their early days, the future will tell which players will remain in the race for the long term. For many specialists, several blockchains will be essential. The challenge will then be to make them communicate with each other. Polkadot is, therefore, a promising coin.
Additionally, Polkadot is a robust crypto. The developers behind Polkadot come from the Ethereum network, a blockchain that dominates the market head and shoulders regarding decentralized applications (dApps). Polkadot is, therefore, not the same coin, with a price that soars then disappears. The Polkadot crypto is here to stay, and its price is expected to increase as it is adopted.

Binance

  • Low fees
  • One of the largest crypto exchanges
  • Fee discount for using native BNB
  • It is a crypto of the future
  • It is a blockchain that allows the interoperability of chains.;
  • It is a blockchain that is based on cutting-edge technology..
  • It faces intense competition with Cosmos and Algorand

FAQs about Polkadot

What is Polkadot?

Polkadot is a layer 0 blockchain that allows blockchains to communicate with each other.

How to invest in Polkadot crypto?

To buy Polkadot, the easiest way is to use a crypto exchange like Binance, Coinbase, or Kraken.

Why invest in Polkadot?

The Polkadot crypto is based on robust technology. In addition, it positions itself in the critical sector of blockchain interoperability.

What is DOT?

DOT is the crypto that allows the operation of the Polkadot blockchain.

Is Polkadot a layer one blockchain?

No, the Polkadot blockchain is a layer 0 blockchain like Cosmos or Algorand.  

What is the value of Polkadot stock price?

Polkadot is not a stock, so it has no stock price. Instead, it is a cryptocurrency.

Is Polkadot good for staking?

Polkadot’s unique Nominated Proof-of-Stake (NPoS) mechanism enables its users to stake DOT and secure and advance the blockchain network as validators.

About the author

Tobi Amure

Tobi began his career in 2017 as a crypto writer, where he focused on producing educational content. He worked with Stockbossup, an investment platform dedicated to educating black people. Prior to that, he worked as a copywriter with Turboxbt, a crypto trading platform. In 2021, Tobi joined Watcher Guru as a crypto news editor. He was recognized as one of the top 333 web3 creators on LinkedIn for crypto in 2022.