Polkadot is an ambitious project that essentially aims to to become the internet of blockchains. In this new internet, blockchains will be able to communicate with each other seamlessly, the number of transactions blockchains can process will increase, and the impact that these blockchains will have on the environment will be significantly reduced.
Polkadot provides a simple, user-friendly way for anyone to develop blockchains using their state-of-the-art technology.
Polkadot’s coin is DOT and has seen significant growth over since it was launched in May 2020.
Let’s now take a look at how to buy Polkadot in South Africa.
How to buy Polkadot in South Africa
The best exchange to buy Polkadot on in South Africa is Binance:
However, you can’t just buy Polkadot directly using Rand – an extra step is required. To buy Polkadot on Binance, follow these steps:
- Deposit funds on Binance
- Purchase Bitcoin
- Purchase Polkadot (DOT) with your Bitcoin
1. Deposit funds on Binance
In order to purchase Polkadot, you will first need to deposit Rand onto the platform to purchase the cryptocurrency with.
You can deposit funds by either making a bank transfer to the Binance platform, or send Bitcoin or any other cryptocurrency that you already own to the Binance platform.
2. Purchase Bitcoin
Once you have made the deposit and your funds are visible in your Binance account, you then need to purchase Bitcoin. This step is necessary since there is no option to trade Rand directly with DOT. You can only trade BTC for DOT.
Note: if you made the deposit to Binance with cryptocurrency, then you can skip this step. Just make sure that the cryptocurrency that you deposited can be traded directly for DOT. Otherwise you’ll need to trade into a cryptocurrency that can be traded directly for DOT first.
3. Purchase Polkadot (DOT) with your Bitcoin
The last step is to trade your Bitcoin, or the cryptocurrency that you’re using, for DOT.
And there you have it! You have successfully purchased Polkadot (DOT)!
If you want to cash out your Polkadot
If you want to cash out of DOT, you can trade it back to a cryptocurrency of your choosing. However, if you don’t want to hold the money in cryptocurrency, or want to withdraw the funds into your bank account then you will need to trade your DOT for Bitcoin. Afterwhich, you need to then trade your Bitcoin for Rand. You will then be able to withdraw the Rand into your bank account.
Why Polkadot is important
Since the introduction of Bitcoin in 2009, problems with blockchain and cryptocurrency technology have become evident. These problems are serving as obstacles preventing Bitcoin and other cryptocurrencies from becoming the new global payment system.
Problems like the interoperability, sustainability, and scalability are technical limitations which are preventing cryptocurrencies from becoming mainstream and achieving their potential.
These are the problems that Polkadot is trying to solve.
Interoperability refers to the ability for blockchains to share information between each other. Currently, blockchains aren’t able to talk to each other, which means that each person transacting on a blockchain can only do so one blockchain at a time.
Allowing for cross-chain communication between blockchains will enable the true decentralisation of blockchains and cryptocurrency, as well as make it significantly easier for people on blockchains to utilise the power and abilities that blockchain technology allows.
Why is interoperability important?
Similar to the real world, if you are a cryptocurrency investor you can have more than one “bank account” in the blockchain and cryptocurrency ecosystem.
Investors do this to diversify their portfolio and to reduce the risk of keeping all of your money in one account. Spreading the money around into different accounts which all have different returns also means that investors can ensure they are more less likely to miss out on gains from individual coins.
As with regular bank accounts, if you have a number of accounts that you are in control of, it can start to get difficult to remember where all of these accounts are, how much money is in them, etc.
Wouldn’t it be great if you could watch, access, and control all of your accounts from one place?
This is exactly what solving the interoperability, or rather the cross-chain communication, in the blockchain ecosystem will enable you to do.
Blockchains and cryptocurrencies, especially the most well-established ones, are taking their toll on the environment. This is solely due to the amount of computing power and electricity required to maintain and run these blockchains.
This negative impact on the environment is making some blockchains not sustainable for the future. As the amount of people using the cryptocurrency increases, so too will the negative impact on the environment as more computers and electricity will be needed to facilitate the increase in transactions on the blockchain.
Apart from the growing negative impact that blockchain technology will have on the environment as usage grows, there is another problem when discussing the scalability of blockchain and cryptocurrency: the number of transactions that a blockchain or cryptocurrency will be able to process at a time.
Currently, the average blockchain processing speed is anywhere between 7 and 27 transactions per second. Compared to Visa who processes around 1500 transactions per second, the large deficit in processing capability becomes evident.
Why is scalability important?
One of the things that makes cryptocurrency so exciting is the ability to send payments anywhere in the world quickly, with an average wait time around 45 minutes for a global payment in cryptocurrency. With traditional banks typically taking around 3-5 business days to make an international payment, the advantages of cryptocurrency are obvious.
However, if blockchain doesn’t increase the amount of transactions it can process in a second, then transacting on the blockchain will be a delayed process as a backlog of transactions will form.
This could result in a transaction taking longer on blockchain or cryptocurrency than it would at a traditional bank, negating cryptocurrencies’ performance advantage.
These three issues: interoperability, sustainability and scalability are what Polkadot is looking to solve.