Polkadot helps to connect decentralized blockchain technologies. For example, the value of data from Ethereum can be transferred to Bitcoin blockchain without any intermediaries. It increases the speed and scalability of blockchain networks. DOT is the native token of this crypto network which is mainly used for governance. DOT allows the holder to vote for proposals on the network. Besides that, DOT is also used for staking and verifying transactions.
It includes the mainnet called a relay chain, which helps to connect blockchains that allow the transfer of value and data between two blockchains. However, it can also be connected with non-blockchain databases.
The Polkadot network is faster than many other popular blockchain networks like Bitcoin and Ethereum because it has a higher TPM. Polkadot can process 1000 transactions per second, whereas Bitcoin can process only seven transactions, and Ethereum only 30 transactions per second. Developers are working on the scalability of Polkadot networks that will achieve a million transactions per second in the future.
Like Ethereum, Polkadot also uses a Proof of Stake consensus mechanism to secure the network and verify transactions. In this protocol, validators play a vital role, and they need commitment and technical knowledge to run the system.
Validators are nodes that run 24/7 without downtime, and the validators have to stake a substantial amount of DOT tokens on the network pool. The validators get the right to verify legitimate transactions and block fraudulent transactions on the network, and they get rewards for their commitment. If you are interested in DOT token, please read our technical analysis.
At the time of writing this post, DOT was trading around $5.87, which has broken the support of $6. Today’s daily candle is forming outside of the lower Bollinger Bands, suggesting extreme bearishness.
All other technical indicators of Polkadot are neutral. We can speculate a change in momentum, and it may turn bullish within a few days. However, if it breaks the support decisively, then we think it is not an ideal time to invest for the short term. Want a detailed analysis of expected DOT projections? Read our Polkadot forecast now!
On the weekly chart, DOT has been in a downtrend, and $5.5 could be a support for the long term, but candlesticks are forming in the lower Bollinger Bands. So, the Polkadot price may break the support. We think it is not an ideal time for long-term investment.
Besides that, the volume has been decreasing in the last one year, which suggests investors are not interested in trading DOT, so you should prefer a less risky altcoin for long-term investment.
Source by www.cryptonewsz.com