The total market value of all cryptocurrencies is currently CAD $3.119 trillion! That’s a massive leap from 2019 where the market cap was just CAD $175.30 billion. Experts estimate it could reach as high as CAD $14 trillion by 2023.
Given that there are over 10,000 different cryptocurrencies, it can seem a bit overwhelming when you first begin to invest. Most people are familiar with Bitcoin (BTC), Ethereum (ETH), and Doge (DOGE), but what about the others, such as Polkadot (DOT)?
What is Polkadot? Do you know how to buy Polkadot? What are some Polkadot tips when investing in this crypto? Keep reading to discover the answers to these questions and more as we explore this complete Polkadot guide!
What Is Polkadot?
Gavin Wood, Peter Czaban, and Robert Habermeier created Polkadot in 2016. Gavin Wood was a co-founder of Ethereum, and he is the inventor of Solidity – the language that developers use when writing decentralized apps on Ethereum.
But what is Polkadot?
Some will know Polkadot by its native cryptocurrency: DOT. But it’s the Polkadot blockchain that is particularly fascinating.
A blockchain is a system for recording information through what is essentially a digital ledger. The system duplicates and distributes records of transactions across the network to minimize fraud.
The Polkadot Blockchain
Polkadot has been described as the “blockchain of blockchains” because it operates two types of blockchains: the main network and user-created networks.
The main network is called a relay chain, and this is where permanent transactions are made, recorded, and shared. The user-created networks are called parachains. They are custom, project-specific blockchains that can be customized for use cases and then fed into the relay chain.
Polkadot aims to tackle the problems faced by existing blockchains, known as the ‘Blockchain Trilemma’. Every blockchain deals with security, speed, and decentralization but most only focus on one or two out of the three.
By using the relay chain and the parachains together, Polkadot offers a previously unseen level of scalability and speed.
It’s estimated that once fully operational, the Polkadot network will be able to process up to 1 million transactions per second. All while remaining completely secure and decentralized.
Cryptocurrencies struggling with the blockchain dilemma (such as Bitcoin and Ethereum) may join the Polkadot network via bridges.
How to Buy Polkadot
Buying Polkadot is simpler than you might imagine. You can use a cryptocurrency exchange to trade Canadian dollars for Polkadot in just three steps:
- Register an account using a website or app
- Get verified by providing some basic information
- Fund your account and buy Polkadot
But you should consider exploring some Polkadot advice before diving into the world of cryptocurrency trading.
Cryptocurrency trading comes with risk, just like any other financial venture. No matter how much research you do, there’s never a guarantee that you won’t lose your investment. The future looks bright for the Polkadot crypto but consider these Polkadot tips:
- Develop an investment strategy
- Manage risk
- Diversify your portfolio
- Be patient with long-term investments
- Don’t panic if there’s a dip
Some people view cryptocurrency as easy money but it’s always a gamble. Make sure you understand the risks and strategies before purchasing. And only spend what you can afford to lose!
Polkadot Guide Final Thoughts
So, what is Polkadot? Polkadot refers to a blockchain system and a native cryptocurrency (DOT). It aims to conquer the blockchain dilemma by providing decentralization, speed, and security all in one.
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