Even though there is no cryptocurrency-related legislation in Mississippi at the moment, that might change very soon. Mississippi State Senator Josh Harkins, a chairman of the Senate Finance Committee, has filed a set of bills to address this emerging digital currency, bring it into state law, and define how it will be recognized in Mississippi.
Nevertheless, Mississippians have been investing in various cryptocurrencies, including Polkadot. This new, innovative crypto has shown tremendous potential and is attracting users worldwide by offering something unique.
If you are interested in purchasing Polkadot, we will share how you can acquire it, how it works, and whether it is a good investment. So, make sure to stay with us until the end.
Polkadot (DOT) Explained
Polkadot (DOT) was founded by one of Ethereum’s co-founders, Gavin Wood, Peter Czaban, and Robert Habermeiner in 2016. It is an open-source protocol designed to facilitate the exchange of assets or data safely over any connected blockchain, be it Polkadot or a different one. The DOT coin is the internal token of the Polkadot network.
Inspired by polka dot fabric, this network aims to join the dots of all other networks operating on their own. That is why it is often referred to as a multi-chain network. Blockchains that are connected to the Polkadot network and working simultaneously are referred to as parachains.
How Does Polkadot Work?
There are three types of blockchains that can be created on the Polkadot network. They are also its main components:
- The Relay Chain — The main chain is responsible for finalizing and validating transactions. Polkadot does this at a very high speed by keeping the validation and the addition of new transactions separate.
- Parachains — The Polkadot network can process parallel transactions thanks to parachains. Every parachain can work independently with its native cryptos. They can even have their own parachains, which is called sharding. Consequently, a large number of transactions can be completed without causing excessive strain or pressure on the Relay Chain. This makes Polkadot an impressively scalable system.
- Bridges — Polkadot uses bridges — the blockchains that make sure transactions with other cryptocurrencies are secure and uninterrupted.
The Relay Chain uses a system (a nominated proof-of-stake/NPoS) that allows anyone who stakes DOT tokens to lock this cryptocurrency into a special contract in order to perform one or more of the following roles:
- Validators — They validate data within blocks of parachains. Additionally, they participate in consensus decisions and vote on network-proposed changes. Their role is also to monitor the security of the network.
- Nominators — Nominators ensure the Relay Chain is secure by selecting trustworthy validators. They entrust their DOT tokens to validators, who are then granted their votes this way.
- Collators — These are the DOT holders who are in charge of the complete history of every parachain and the main chain.
- Fishermen — These DOT holders monitor the Polkadot network and report invalid transactions and suspicious behavior to validators.
DOT rewards are also available to those users who stake DOT and perform the roles mentioned above.
Polkadot (DOT) in Numbers
At the moment of writing this (March 2022), Polkadot ranked 12th in terms of popularity and market cap. DOT coin’s price was $17, while the market cap was around $17.4 billion. Its total circulating supply was over 987 million coins. Compared to other cryptos, its value has fluctuated only slightly.
On November 4, 2021, DOT reached its highest value of $53.88. The lowest amount you could pay for a DOT coin was $2.9 — but that was only in the beginning.
Although the number of tokens that are in supply is not limited, the network has a predetermined inflation rate to prevent the currency from ever losing its total value.
Why Invest in Polkadot?
Here are a few reasons why we believe you should invest in this cryptocurrency:
- The DOT network aims to make as many blockchains as possible work together, thus improving their interoperability. Its goal is to enable more efficient data sharing between different ecosystems. It attempts to do so by providing tools that will allow blockchains from multiple networks to exchange data easily.
- Polkadot allows its users to stake their DOT tokens. The number of staked tokens determines the amount of passive income that DOT owners can earn.
- Discussions about improvements are also a part of this blockchain’s governance, and DOT holders have a say in platform decisions. Polkadot intends to make its stakeholders the center of ecosystem development, with the most decentralized governance possible.
- In contrast to Bitcoin or Ethereum, Polkadot places a greater emphasis on its solution’s scalability. Polkadot’s fragmented network prevents network congestion, which is a problem with Ethereum. Thanks to this, Polkadot can constantly offer a fast and inexpensive transaction flow. That is also the reason why this network deploys parachains, which operate alongside the main network.
- Interoperability and security can be combined with Substrate — the primary blockchain that the developers use to create parachains. As well as benefiting from Polkadot’s security protocols, the Substrate allows companies to develop their own blockchains.
Despite this, you still need to consider Polkadot’s downsides. Cryptocurrencies are extremely volatile, so it’s impossible to predict where the price will go.
Where to Buy Polkadot in Mississippi
If you are a Mississippi resident, you can acquire Polkadot via a centralized cryptocurrency exchange or buy it from another owner directly. We’ll discuss both of these options, but since the former is more trusted and popular, we’ll focus on it more.
Centralized Cryptocurrency Exchanges
Centralized cryptocurrency exchanges are the essential transacting vehicle that investors use for purchasing, selling, or trading cryptocurrencies. The reputable ones tend to support more than 20 currencies.
Centralization means that these transactions are conducted with the help of a third party. Such a system offers higher security and closer supervision, which an individual cannot accomplish on their own.
A centralized exchange can conduct transactions both between fiat and cryptocurrencies and between two different cryptos. Gemini, Kraken, Coinbase, and Binance are the most popular centralized exchange platforms.
It is important to mention that there are also decentralized crypto exchanges. The only difference is that there is no middle man. They function as peer-to-peer exchanges, and an escrow service never holds the digital assets.
We have compiled a list of the most important aspects to consider when selecting the right centralized exchange:
- Availability in Mississippi — Even though most exchanges are accessible throughout the US, the one you like might not be available in Mississippi due to state regulations. Visit the exchange’s official website to find out for sure.
- Accepted cryptocurrencies — Popular exchanges trade with different cryptocurrencies. However, that doesn’t mean each of them features Polkadot. Find out if the one you are interested in supports it.
- User interface — A complicated-looking interface might put off new investors. Therefore, make sure to select the one that is newbie-friendly.
- Reputation — Don’t forget to do a little background search and read online reviews related to the chosen exchange. This way, you’ll know whether to go for it or pass.
- Security — It is of the utmost importance to ensure an exchange employs state-of-the-art encryption technology and the latest firewalls to secure your tokens. You should also check its history to be sure there were no security breaches or hacker attacks. Moreover, check whether an exchange features cold storage and a multi-signature wallet.
- Liquidity — You should pick the one with many users who trade assets regularly. More importantly, the exchange of your choice should have a high trading volume of DOT coins. This way, the transactions will be faster, and prices will be reasonable.
- Fees and limits — You should be aware that exchanges impose various fees, including transaction and conversion costs. Although most of them don’t have the minimum deposit requirement, some will put a cap on how much money you can withdraw in a given timeframe.
- Payment methods — Exchanges offer various payment methods, including credit/debit cards, bank transfers, Paypal, and other cryptocurrencies. Before choosing one, make sure it features your preferred paying option.
If, for some reason, buying the DOT tokens via an exchange is too complicated for you, you can purchase them from another DOT holder directly. This way, there is no third party involved, and you won’t be paying any transaction and conversion fees.
However, since this is a bit riskier, make sure to find a person you trust to make the safe trade. Always do it in a public place, and verify who you are trading with. There are many scammers, and you want to avoid them at any cost.
How to Buy Polkadot: Step-by-Step Guide
Buying DOT from a centralized cryptocurrency exchange is a simple process. Still, if you have never done it, here is a step-by-step guide you can follow on almost every exchange:
- Set up a wallet — It is much safer to keep your DOT coins in a wallet than on an exchange. Visit the official website of the preferred wallet, find out if it supports DOT, and create an account.
- Pick an exchange — You can either go for one of the exchanges we recommended above or find another one that fits your preferences. If you choose the latter, it is crucial to check whether a platform covers all the aspects we have discussed. Find a reputable one that offers enough DOT tokens.
- Visit the website and register — Set up an account to complete the KYC procedure by providing all the necessary documents.
- Make a deposit — Select one of the available payment methods to fund your account with USD. Make sure you have enough money to cover all the potential fees.
- Buy DOT — Pick USD to DOT and type in the amount you want to buy.
- Transfer DOT to your wallet — You can transfer your DOT tokens to your wallet, as this is a much safer storage method or leave them on the exchange if you plan to further trade with them.
Since you are now familiar with what it takes to buy the DOT coins in Mississippi, you just need to head over to an exchange and start purchasing. As you have seen, the process is pretty straightforward. We only suggest researching on your own and following the crypto market before you start investing. Be sure to understand all the risks involved since Polkadot’s worth constantly fluctuates.