Polkadot wallet: How to buy DOT Coin

To buy Polkadot coins (DOT), you’ll need access to an exchange that supports trading in DOT as well as a Polkadot-compatible wallet. We cover where you can purchase DOT, which wallets you can store it in, and how DOT might fare as an investment.

Is Polkadot a good investment?

At the time of this writing, Polkadot remains in its early development phase; investing in DOT coins should therefore be viewed as a highly-speculative investment.

The Polkadot blockchain is a relatively new technological endeavor and is much younger than its older and more established compatriots, Bitcoin and Ethereum. Polkadot coin (DOT) is the native cryptocurrency of the Polkadot blockchain founded in 2016 by Gavin Wood, one of the co-founders of the Ethereum blockchain. The blockchain itself was formally launched in 2020.

The Polkadot blockchain was created as a medium to secure and facilitate the transfer of data and communication between disparate blockchains via a hub and spoke system of parachains. The Polkadot blockchain is meant to act as the hub “relay chain,” which other blockchains can connect to via the relay chain as participant “parachain” nodes.

While it has already rolled out features like Nominated Proof-of-Stake and balance transfers, some of its core features are still under development and do not yet exist on the blockchain. This includes the rollout of parachains and XCMP (Cross-chain message passing), which are meant to allow for the hosting of separate blockchains and cross-communication between blockchains, respectively. 

At the time of this writing, Polkadot remains in its early development phase; investing in DOT coins should therefore be viewed as a highly-speculative investment. 

As with all speculative investments, DOT coins offer the opportunity for asymmetric returns if the blockchain’s development community is able to achieve their goals and market reception is favorable. 

However, investors should be prepared to lose some or all of their investment if development goals are not reached or market response is not favorable. We encourage investors to always conduct their own due diligence before purchasing a significant stake in any investment.

How to buy Polkadot (DOT)

Both beginners and seasoned investors can purchase DOT cryptocurrency using the following steps:

1. Find an exchange that allows you to trade Polkadot (DOT)

You can purchase DOT through any exchange that supports the purchase and sale of Polkadot cryptocurrency. Depending on the exchange you choose, you can convert other cryptocurrency into DOT or deposit fiat currencies via electronic fund transfer to purchase DOT.

As of the day of this writing, the following popular exchanges support the purchase and sale of DOT:

Note that these are not your only options, but represent the most popular and widely trusted exchanges on the market that support Polkadot trading.

2. Open a cryptocurrency wallet that supports Polkadot (DOT)

If you’re a first-time investor in cryptocurrency, you’ll also want to open a crypto wallet so that you’ll have a location to send and store any DOT you acquire.

What wallets hold Polkadot (DOT) crypto?

Depending on your preferences and trading habits, you can choose between three main types of wallets:

We generally recommend hardware wallets for large quantities of cryptocurrency in excess of $500 for security reasons. 

Software wallets generally offer the most convenient access to your cryptocurrency while paper wallets offer a secure option for long-term storage, but rely on the user to maintain the integrity and security of their private key.

Pro Tip: Exchange Security
It’s generally best practice to store your cryptocurrencies in a secure cryptocurrency wallet rather than leave them on an exchange. Exchanges can be vulnerable to cybersecurity attacks and rely on you to trust their servers to protect your private keys and account information. 

While not a concern for small amounts of cryptocurrency ($500 or less), it’s a good idea to obtain a trustworthy cryptocurrency wallet when storing larger amounts for extended periods.

Does Polkadot have a wallet?

Parity Technologies, the lead developers on Polkadot, does not explicitly endorse but provides technical and user support for the following wallets:

Each of the wallets mentioned above supports staking and are non-custodial when it comes to your private keys. 

This means that users will be able to stake their DOT to support the Polkadot blockchain and retain exclusive access to their private key as well as full control over their holdings.

3. Set up your Polkadot wallet and transfer your DOT

To set up a Polkadot wallet, all users will be required to pay a minimum of 1 DOT to establish an active account on the blockchain. This is meant to deter junk accounts from being established on the blockchain thereby minimizing processing power.

You can either purchase DOT outright using fiat currency or by converting any existing cryptocurrency holdings within your compatible exchange into DOT.

After you’ve acquired your desired amount of DOT. Set up a crypto wallet that’s capable of supporting DOT cryptocurrency. You can check with your wallet’s provider to confirm whether it supports DOT. 

Once you’ve created a Polkadot compatible wallet, make sure you store your wallet’s seed phrase in a safe and secure location to backup your holdings in the event you lose your account. This will allow you to recover your cryptocurrency should your application be lost.

Now that your crypto wallet contains the desired amount of DOT, obtain the address for your wallet from your wallet’s settings and enter it within your designated exchange. You can set up a direct transfer of DOT from the exchange to your wallet using this method. Make sure you verify that your target address is correct before initiating a transfer.

Following the transfer of DOT to your new polkadot wallet, the DOT balance should show up within your wallet and the process will be complete. Remember to keep a balance of 1 DOT in your wallet at all times so that it remains active.

What do I gain by investing in DOT?

In addition to the possible value appreciation coveted by most cryptocurrency speculators, owning DOT cryptocurrency affords you the following privileges:

  • Right to delegate DOT to staking pools in exchange for a regular rate of return
  • Right to vote on all future upgrades to the Polkadot blockchain
  • Potential for capital appreciation gained from their investment in DOT

Note that in addition to capital appreciation, investors in DOT are also exposed to any potential losses that the cryptocurrency may suffer for any reason. Always conduct your own due diligence and limit your investment exposure to an amount that you can afford to lose.