Polkadot IRAs have many advantages, including tax-saving benefits, 24/7 trading, and diversification.
Polkadot is a network protocol that supports blockchain interoperability. In other words, it facilitates the transfer of data — including both off-chain and on-chain data — to be transferred from one blockchain to another, whether it’s a public or private blockchain. In a world where new blockchains are continuously emerging, the concept of interoperability is becoming increasingly relevant, strengthening the use case for protocols like Polkadot. If the question “Is Polkadot a good investment” is running through your mind, then keep reading to pick up enough information needed for you to determine what’s best for your portfolio.
Polkadot was founded by Gavin Wood, a computer scientist who is also a co-founder of Ethereum. He wrote the whitepaper for Polkadot in 2016, and the protocol launched in May 2020. Wood is famous in decentralized circles for writing the Ethereum Yellow Paper, inventing the Solidity programming language for writing smart contracts on Ethereum, and founding Parity Technologies.
In 2017, Polkadot raised $145 million in Ethereum in its maiden token sale in a couple of weeks. Perhaps, this may have been why many investors seemed to believe Polkadot to be a good investment at that time. In an unfortunate twist, most of those proceeds were frozen in a smart contract across Parity wallets due to a vulnerability and subsequent attack. In the meantime, however, they appear to be well funded.
In October 2021, Wood announced a new development fund comprising nearly 19 million DOT tokens. Based on the latest DOT price, the fund is worth more than $800 million. The funds will be directed to the community’s “ideas for building, improving, educating and … anything else that the Polkadot governance believes valuable,” noted Wood.
Wood came up with the idea for Polkadot while building core technology to help Ethereum gain scale through sharding, the process by which a single dataset is split and stored across numerous databases. It was then that it dawned on him that sharding would present hurdles to blockchains, in response to which he dreamt up the Polkadot protocol, a “heterogeneous multi-chain framework,” to solve those pain points.
Polkadot’s vision is much bigger than helping Ethereum or any single blockchain gain scale. Wood has his sights set on a completely decentralized internet, known as Web 3.0. The internet is currently in the Web 2.0 phase. Web 3.0 is an upgrade that will transform applications into decentralized protocols, ultimately giving users more control over their own data rather than Big Tech companies like Google and Facebook controlling it.
So, you can think of Polkadot as a uniter of blockchains that are both public and private in nature so that they are connected in a similar way that computer networks access the internet. In doing so, blockchains have a greater chance of reaching wide-scale adoption. Another way to think of Polkadot is as the “internet of blockchains,” as explained by Dan Reecer, VP of Growth at Acala and Karura, which are deployments of Polkadot.
While Polkadot can be seen as a project that brings cryptocurrency investors deep into the proverbial rabbit hole, it’s important to note that it was founded by one of the industry’s few blockchain pioneers, Dr. Gavin Wood.
Also, if Web 3.0 is truly the next iteration of the web, then Polkadot is positioned right in the middle of it. These are just a couple of reasons to explore to answer the looming question, “Is Polkadot a good investment” to determine whether it should have a place in your retirement portfolio.
After starting as a Proof of Authority (PoA) network, Polkadot has since transitioned to what’s known as a Nominated Proof-of-Stake (NPoS) consensus mechanism consisting of nominators and validators. As the name suggests, nominators “nominate” potential validators, the latter of which do most of the leg work when it comes to securing the Relay Chain via staking DOT tokens.
Polkadot might be high-tech, but the high-level view of the project’s role is rather simple — to make blockchains more functional by allowing them to communicate with one another in a secure way. As a result, blockchains won’t need to function in silos, the way Bitcoin and Ethereum currently do, which may make them more practical in the real world.
In addition, blockchains can continue to optimize for their specific use cases, whether it’s for identity management or file storage, for example, and continue to get better at what they do. The beauty for users is they may be able to maintain control of their own information rather than being limited by the borders of a single network.
Now that you are familiar with the Polkadot protocol, you might be wondering how to buy Polkadot coin. Polkadot (DOT) is the native cryptocurrency of the Polkadot project, like the way Ether fuels the Ethereum network, and can be bought and traded like other cryptos. And if you want to know where to buy Polkadot coin, you won’t have to look too far. DOT ranks among the leading tokens based on market capitalization and is traded on some of the world’s largest cryptocurrency exchanges, including Binance, Huobi, Coinbase, Kraken and many others. In about the first 10 months of 2021, the DOT token soared more than 350%. For investors who believe in Web 3.0, Polkadot is poised to be front-and-center in this decentralized web and therefore could have a place in a long-term investment strategy such as a crypto IRA.
Polkadot’s unique model involving a scarcity of auction slots creates demand among projects to be included as a parachain and drums up excitement around the protocol itself. As these auctions, which are a key part of the project’s roadmap, ramp up, the DOT price could benefit from the increased demand and attention. If it comes down to where to buy Polkadot coin, you won’t have to look any further than our platform.
Even though Polkadot’s creator, Gavin Wood, was also a co-founder of Ethereum, the two projects still compete. In fact, Polkadot, Ethereum and Binance Smart Chain (BSC) are all competing for the top developers to build decentralized applications (Dapps) on their respective platforms.
While Polkadot and BSC have been touted as possible ‘Ethereum Killers,’ they are more like alternatives to the second biggest cryptocurrency. They offer a reprieve from Ethereum’s lofty gas fees and address some of its scaling issues. BSC, for example, says it offers speedy confirmation times and cheap fees and that it is the blockchain of choice for users who move funds on a regular basis.
Wood believes that Polkadot will attract innovative products that were constrained by Ethereum in verticals such as gaming. Polkadot is said to be able to gain scale better than its larger rival Ethereum thanks to its parachain technology. Parachain is still a relatively young project compared to Ethereum, and its future hinges on the emergence and success of other blockchains.
Ethereum boasts more than 2,800 Dapps on the network compared to just over 800 for BSC and about 3,500 on Polkadot. And while Ethereum is the clear leader, Polkadot and BSC are younger projects and are no slouches, either.
Source: CryptoRank Platform
You may still be asking, ‘Is Polkadot a good investment?’ The answer is, if you are looking for an alternative to Ethereum in your crypto IRA or to gain more exposure to the developer side of the blockchain industry, Polkadot may be just the thing to do the trick.
A bet on Polkadot in your Bitcoin IRA is a potential bet on the rise of a decentralized web. For adventurous investors desiring to capture the growth of this market at an early stage, investing in DOT in your Bitcoin IRA could be a way to see your retirement savings grow over the long term. Rather than trying to figure out how to buy Polkadot coin on your own, you can allow our team of experts to help you invest in it with your Bitcoin IRA.
Now that you know about parachains, blockchains and a decentralized web, you might be curious to learn how to buy Polkadot coin with BitcoinIRA.com. By doing so, you are on your way to accessing one of the hottest emerging cryptocurrencies on the biggest and most secure platform1 for cryptocurrency retirement accounts available. Start by completing an application. Next, fund your account. And finally, start trading!
Now that Polkadot trades among the leading cryptocurrencies, crypto bulls seem to be convinced the DOT price is poised to go higher for the foreseeable future.
1Security may vary based on asset chosen and custody solution available.