Polkadot (symbol: DOT) is a cryptocurrency token built on the Ethereum network. It is part of a larger project called Polkadot, which aims to allow interoperability between various types of blockchains, allowing them to connect and exchange data with each other seamlessly.
Polkadot is a network that connects different types of blockchains using ‘relays’. Relays relay messages between the chains (or nodes) they are connected to, allowing them to communicate. Relays are also known as bridges or parachains. There are several things to consider before you buy DOT in Australia.
Step by Step Guide to Buy DOT in Australia
Choose a Reliable Exchange
There are around 312 registered crypto exchanges in Australia. Many exchanges sell DOT, but it is highly recommended to exchange with some form of insurance against hacks or losses. However, they offer significantly less liquidity compared to their centralised counterparts.
Create an Account to Trade DOT
Enable 2FA (two-factor authentication), which provides an additional layer of security to protect your funds. After enabling 2FA, you must also give the exchange your email to send a code to verify it.
Deposit Funds to Buy DOT
In the case of most exchanges, you must deposit coins from another exchange or wallet into your account before you can trade it on your chosen exchange. If you use an ETH-based token, then choose a good option that supports USD and Australian dollars.
Buy DOT Tokens
Select your preferred token to trade, then select a market to buy/sell it on. If you did not yet deposit funds into your account, then do that before buying any tokens. It is also possible to exchange BTC for ETH, and vice-versa, instead of buying from fiat currencies.
When you want to buy DOT in Australia, there are a couple of options you can select. Buy Limit allows you to set the price you want to buy at. Buy Market is an option that buys from the lowest current sell offer compared to Buy Limit, which buys from the highest current sell offer.
Withdraw Your DOT Tokens
Once your token has been deposited into your account, you must withdraw it to your wallet. Select the quantity you want to withdraw and press ‘withdraw’. You may have to give an email address or make a verification deposit if the exchange requires it before allowing withdrawal.
Key Factors to Consider When Buying DOT in Australia
It is essential not to skip the registration step on exchanges, as this allows you to manage your account and recover any funds it holds should something happen. Be wary of exchanges that are known for being hacked or have had security breaches in the past.
Deposit funds that you are willing to lose into an exchange account. If something bad were to happen, there might be no way of recovering the lost funds.
If it is possible, then using a decentralised exchange is the best option. However, liquidity is significantly lower than centralised exchanges, making it harder for someone to buy it.
What Determines its price in Australia?
Polkadot tokens are not mined, meaning that the only way to obtain them is by buying from an exchange or someone else. However, it may be possible to generate a sell order for any price.
Since you can acquire various ways, there is no single price point to determine the market value.
Marketing and Buyer Sentiment
PolkaDot has a strong following on social media with over 60k followers on Twitter and an active community on Reddit. Determine if there is a lot of interest in the project at any given time.
Availability on Exchanges
Buyer or seller volume can also affect price, as with more buyers, it will cost less, and with more sellers, it will cost more.
Dot tokens are defined as protocol tokens. This means purchasing DOT tokens for fiat currencies may be possible, but it will depend on the exchange. Buyers should be wary of exchanges that do not follow AML and KYC regulations and ensure their funds are safe and secure before making any purchases.