Cryptocurrency Articles

Cheat Sheet / Updated 03-08-2023

So, you’ve heard about Bitcoin and other cryptocurrencies, and you’re ready to add these new kids on the block to your investment portfolio — that’s great! To make the best decisions for your portfolio, educate yourself on the basics of cryptocurrencies and what you need to get started. Also, be sure to do your homework on a crypto’s fundamentals before adding any new assets to your portfolio.

Article / Updated 02-14-2023

Listen to the article:Download audio The decentralized finance (DeFi) sector is an alternative to traditional financial services with applications in cryptocurrency or blockchain technology. The modern DeFi era truly began with Bitcoin, the first widespread implementation of a decentralized method of record-keeping that is permissionless yet reliable and secure. Bitcoin effectively provides a currency that doesn’t rely on the stability of a central authority. The implications of such a technology are huge for developing economies where faith in central government is low and bank runs are a serious risk, if not a reality. Moreover, much of the world’s population is, at most, one generation removed from being forcibly chased from their homes. Consider these events: Just 70 years ago, Seoul, the capital of Korea, was captured and recaptured four times, and families were permanently separated in a war that ultimately resulted in two separate nations. The fall of Saigon 50 years ago resulted in a mass exodus of Vietnamese refugees seeking asylum. More recently, the fall of Kabul in 2021 and the Russian invasion of Ukraine in 2022 led to more waves of emigrants who found themselves in sudden exile. But aside from more dire circumstances — like the collapse of a banking system or the fall of your government — it’s natural to question what true value Bitcoin’s underlying technology adds in a stable and wealthy nation. After all, I trust that Bank of America won’t maliciously siphon funds from my account, and despite the infamous Wells Fargo fake account scandal (for which it was ultimately fined $3 billion), I would even entrust my money to a Wells Fargo checking account. Nonetheless, reliable economies still have submarkets that are inherently rife with distrust of the central operator, with dark pools (securities exchanges in which participants can trade anonymously and with less transparency) being a case in point. (Try Googling “dark pool lawsuit”!) The trust issue naturally goes away if there is no central operator to distrust, and with the advent of Bitcoin, a proven technology now exists to implement modern DeFi processes across many use cases in finance. Demystifying DeFi The idea of decentralized processes is certainly not new. After all, before centralized finance (CeFi) arose to establish trusted intermediaries, primitive DeFi was the status quo. Transactions were all peer-to-peer, and you were constrained by your local neighborhood to gain access to capital and to obtain goods by bartering one item for another. Record-keeping was minimal, and ownership was determined by physical possession. In modern markets, transactions require confidence in the validity of the agreement, which is provided by reliable and secure record-keeping systems. After all, when you sell your car, you are really transferring the legal right to access the car. Without a reliable record-keeping system in place, chaos would ensue. (Imagine the return of finders keepers as a rule of law!) What’s truly exciting now is the distributed-ledger technology that provides a reliable and secure method of record-keeping that is not maintained by a trusted intermediary, such as Bank of America or the DMV. Behold the dawn of the modern DeFi era! From autonomous collectives to trillion-dollar DAOs Well-functioning, leaderless communities are all around us, and in each circumstance, an inherent governance mechanism incentivizes and gels the group to act in concert — all without an elected official to assign roles and lead the process. From homework teams to neighborhoods to informal potlucks, small groups can effectively and efficiently self-govern when there are grades to maintain, property prices to protect, or reputational concerns at stake. These small-scale examples probably feel reasonable and natural. But what if I told you that a trillion-dollar organization could autonomously validate, execute, secure, and provide ongoing updates to an entire system without an elected leader to assign tasks? The concept sounds naïve at best, and possibly crazy. And yet, Bitcoin has provided a battle-tested case in point for the underlying technology that enables it to function in a decentralized and autonomous fashion. Yes, Bitcoin is indeed a trillion-dollar decentralized autonomous organization (DAO)! Of course, at this scale and with the value at stake, a DAO can’t rely solely on simple mechanisms like reputational concerns to incentivize participants to behave honestly and in a way that upholds the values of the system. Instead, the underlying protocol must be protected against malicious players who may work hard to cheat the system. Transacting in DeFi versus CeFi Borrowing assets Suppose you want to borrow money. How would this transaction be implemented in primitive DeFi versus modern CeFi versus modern DeFi? Under a primitive DeFi process: You hit up everyone you know within reasonable geographic proximity — a neighbor, a friend, a family member — and hope that someone will lend you something that you can barter with at your local marketplace. Under a modern CeFi process: People have checking accounts, savings accounts, CDs, and so on with the bank, which means that all these people have lent money to the bank. In turn, the bank lends some of this money to you. Under a modern DeFi process: People lock up funds in a smart-contract account, which is a software program on a public blockchain that automatically enforces and executes the rules in the smart-contract code. This smart-contract account is programmed to function as a lending pool from which you can borrow funds. Selling assets Suppose that instead of borrowing assets, you have assets that you want to sell. Comparing the three types of processes again, here’s how this transaction would be implemented: Under a primitive DeFi process: You again hit up everyone you know within reasonable geographic proximity — a neighbor, friend, family member — and attempt to barter by trial and error. Under a modern CeFi process: Liquidity providers stand by, waiting to buy the asset from those who want to sell and to sell the asset to those who want to buy. These liquidity providers commit to buy and sell a certain quantity of assets at varying prices on designated exchanges that serve as official marketplaces for the assets in question. In turn, you place an order to sell the asset through your brokerage firm (who has custody of the asset). Under a modern DeFi process: Liquidity providers lock up assets and funds in a smart-contract account. This smart-contract account serves as a liquidity pool and is programmed to function as an automated market maker. In turn, you can swap your assets for funds from this smart-contract account.

Article / Updated 01-27-2023

Cryptocurrency tokens are virtual currency representing fungible (non-unique) and tradable assets and utilities that reside on their own blockchains. There are two main categories of tokens: native and non-native. Native tokens Native tokens share the common characteristic of serving as the base token or inherent currency of their own proprietary blockchains. Some native tokens, such as Bitcoin (BTC), were designed to serve as disintermediated currencies. The purpose of a disintermediated currency is to provide a global medium of exchange that is independent of a central authority, such as a bank or a government. Other examples in this category include Litecoin (LTC) and Bitcoin Cash (BCH). Most other native tokens were designed to serve as utility tokens. A utility token provides access to a service or good within a given platform. For instance, ether (ETH) serves as the native token that fuels transactions on the Ethereum smart-contract platform. You need to pay ETH to transfer funds, deploy smart contracts, or access functions in an existing smart contract. Other examples in the utility category include ada (ADA) for Cardano and TRONIX (TRX), often simply called TRON, for the TRON Protocol. Coins can shift categories and even straddle more than one category. For instance, ETH became so popular that it’s also used as a disintermediated currency outside the Ethereum platform. Think of Walmart gift certificates, which are like utility tokens. The gift certificates are designed to be used to access goods and services within the Walmart platform. However, if Walmart becomes so popular that restaurants and movie theaters begin to accept Walmart gift certificates in place of cash, these gift certificates will have become a global medium of exchange that is now accepted outside the Walmart platform. Figures 1 and 2 present examples of online vendors that accept BTC, LTC, and ETH, among other crypto, as forms of payment. Non-native tokens Close to 21,000 exchange-traded cryptocurrencies were listed on CoinMarketCap as of the end of August 2022. Most crypto assets are not native tokens. Instead, they are built on and secured by an existing blockchain. After all, we really don’t need 20,000 different blockchains that essentially provide the same recordkeeping function. Also, having so many distinct blockchains would compromise the safety of each system, which depends on the size of the network. Although there are now many serious contenders to be the number-one. smart-contract platform, Ethereum remains the predominant blockchain on which to issue crypto assets, either as ERC-20 fungible tokens or as ERC-721 non-fungible tokens. Much like how you can have numerous tabs in an Excel spreadsheet to keep records of different things, Ethereum allows developers to carve out their own recordkeeping systems on a reliable and tamper-proof platform. The following sections, from Stablecoins to Meme coins, provide examples of non-native fungible tokens. Stablecoins So-called stablecoins derive their name from the soft one-to-one peg they seek to maintain with a chosen fiat currency, such as the U.S. dollar. (A soft peg allows some flexibility in the exchange rate, whereas a hard peg requires strict one-to-one adherence.) Some stablecoins, such as Tether (USDT), are centrally controlled by a trusted party that controls the supply and is responsible for holding sufficient collateral — such as U.S. dollars or gold — to maintain the public’s faith in its stablecoin. With a total market cap in excess of $180 billion, USDT is the largest stablecoin and the third largest cryptocurrency. It began as an ERC-20 token for use on Ethereum and later expanded to other blockchain platforms, such as TRON, Solana, and EOS. The stability of a stablecoin depends critically on the management (or mismanagement) of the stablecoin and ongoing public faith in the system. Whether the stablecoin is centrally managed and backed by traditional collateral or is algorithmically maintained by a nexus of smart contracts, stablecoins are not immune to a classic run on the bank. Regulators are increasingly concerned about the seeming Wild West environment in which stablecoins have been operating. Their concerns were heightened by the recent catastrophic implosion of TerraUSD (UST), an algorithmic stablecoin that plummeted to just a few cents and has remained de-pegged from the U.S. dollar since May 2022. Overall, lawmakers are in favor of imposing capital requirements on stablecoin issuers like Tether Limited Inc. (for USDT) and Circle (for USDC). Perhaps the next move will be to require algorithmic stablecoins to undergo a formal credit rating process! Wrapped tokens Wrapped tokens allow for the synthetic use and trading of a native token from another blockchain. Much like how stablecoins are pegged to a fiat currency, wrapped tokens are pegged to a particular token. For instance, you can’t swap ETH for actual Bitcoins (BTC) on the Ethereum blockchain, but you may have noticed that you can swap ETH for Wrapped Bitcoin (WBTC), which is issued as an ERC-20 token, via a DEX like Uniswap, as shown in Figure 3. Governance tokens Governance tokens have become a popular way for development teams to elicit community participation in the ongoing management of a DeFi protocol after it has been deployed. For instance, the Uniswap token (UNI) is an ERC-20 token that allows its holders to vote on various features of the Uniswap DEX protocols. Similarly, the SushiSwap token (SUSHI) is an ERC-20 token that allows its holders to vote on various features of the SushiSwap DEX protocols. Note that UNI and SUSHI are purely governance tokens and do not serve as utility tokens on the respective protocols: Specifically, you don’t need UNI to execute a trade on a Uniswap liquidity pool, and you don’t need SUSHI to execute a trade on a SushiSwap liquidity pool (unless, of course, you are planning to swap UNI or SUSHI). The Uniswap and SushiSwap protocols are built on the Ethereum blockchain, and thus, you need ETH, the native utility token of Ethereum, to transact on these DEXs. In addition to voting rights, governance token holders also receive a portion of the fees earned on the protocol. SUSHI holders receive a portion of the 0.30 percent swap fee charged for trading in the SushiSwap liquidity pools, and UNI holders are expected to soon begin receiving a portion of the 0.30 percent swap fee charged for trading in the Uniswap liquidity pools. Despite their uncanny resemblance to equity securities (which also provide voting and cash-flow rights), governance tokens have thus far managed to stay out of the SEC’s crosshairs. The implications, though, would be huge — requiring their removal from any crypto exchange not registered as an Alternative Trading System (ATS). Security tokens Security tokens are tokenized securities, which represent equity ownership or other types of cash-flow claims in tokenized form. BCAP, an ERC-20 token issued by Blockchain Capital in 2017, is reportedly the first security token offering (STO) and was used to raise funds for its Blockchain Capital III Digital Liquid Venture Fund. Other examples of security tokens include OSTKO, an ERC-20 token representing preferred equity shares in Overstock.com, and ArCoin, an ERC-20 token representing shares in the Arca U.S. Treasury Fund. Meme coins Some coins are simply meme coins that have no explicit monetary value or practical use associated with the coin at creation. Dogecoin (DOGE), the most famous meme coin, is actually a native token with its own blockchain that was originally designed as a joke. DOGE is the largest meme coin and tenth largest cryptocurrency, with a total market cap close to $8.5 billion as of the end of August 2022. Inspired by the success of DOGE, other meme coins followed in its wake. Shiba Inu (SHIB), launched as an ERC-20 token on Ethereum, is another runaway success with a total market cap in excess of $6.5 billion, making it the second largest meme coin and 14th largest cryptocurrency. Of course, meme coins can also shift or straddle other categories. Refer to Figures 1 and 2 (above) to see that both DOGE and SHIB are also accepted as forms of payment on CheapAir.com and Newegg.com. Other intriguing (though far less successful) meme coins include FOMO Coin (shown in Figure 4), and Jesus Coin (shown in Figure 5), both of which were also launched as ERC-20 tokens on the Ethereum blockchain. Much like the rise (and fall) of Beanie Babies in the 1990s, it’s hard to predict whether a meme coin is destined for DOGE-like greatness (though, it certainly helps if vendors adopt the meme as a form of payment and Elon Musk tweets about it!). Differentiating non-fungible tokens Finally, I would be remiss to ignore the category of non-fungible tokens (NFTs)! Although NFTs also fall under the category of non-native tokens, I’ve assigned this group its own header to clearly demarcate it from the tokens covered previously, which are all fungible tokens. NFTs are still relatively young, and thus far have mostly been designed to represent ownership of digital collectibles and gaming assets. However, many nascent projects are in various stages of planning and development. From NFT-izing the ownership records of luxury goods to event tickets to real estate, the possibilities are seemingly endless. Already, NFTs are being used to secure ownership and transaction records of digital property in decentralized metaverses, such as Decentraland and Sandbox. Perhaps more real-world analogues will soon follow!

Article / Updated 01-27-2023

To meaningfully navigate the world of decentralized finance (DeFi), you first need to set up a Web3 wallet that can submit transactions and access smart contracts on a public blockchain. Because so much of the DeFi ecosystem has been built on Ethereum, this article shows you how to get started with MetaMask, an application that connects you to the Ethereum blockchain. MetaMask is one of the most well-known and widely supported noncustodial crypto wallets connecting you to the Ethereum blockchain. Other popular contenders include WalletConnect and the Coinbase Wallet (not to be confused with the custodial Coinbase.com wallet). Unmasking MetaMask MetaMask is an amazingly simple, yet powerful, application that allows you to manage your Ethereum accounts and to interact with the Ethereum network. With this wallet app, you can create new accounts, import existing accounts, and submit transactions. In addition to handling ether (ETH), the token native to Ethereum, this wallet application is also compatible with ERC-20 fungible tokens and ERC-721 non-fungible tokens (NFTs). MetaMask operates as a browser extension, which makes it easy for you to connect to web-based Ethereum dApps (decentralized applications), the vast majority of which have integrated MetaMask functionality in their websites. More ambitious readers may be glad to discover that Remix — a web-based integrated development environment (IDE) — is integrated with MetaMask to allow you to seamlessly launch smart contracts on Ethereum without having to download additional software or run a full node on your computer. Exercise caution when interacting with dApps, just as you would when engaging with any application coming from an unknown or untrusted source. Installing MetaMask MetaMask currently supports the Chrome, Firefox, Brave, and Edge browsers. I’ve chosen to proceed in Chrome because it’s the most commonly used desktop Internet browser in the U.S. If you’re feeling a bit adventurous and want a full DeFi immersion, I recommend getting comfortable with the Brave browser. Keep in mind that your visual and textual prompts may differ slightly from what’s shown in the following steps, depending on your chosen browser. You can use these steps to download and install the MetaMask browser extension: Go to www.metamask.io and click the Download Now button, as shown in Figure 1. Click the Install MetaMask for Chrome button, as shown in Figure 2. You’re rerouted to the MetaMask page of the Chrome web store, as shown in Figure 3. Of course, if you’re using a different browser, the prompts will look slightly different, as shown in Figure 4. Click the Add to Chrome button.A pop-up window appears, as shown in Figure 5. Click the Add Extension button. After the installation is complete, a pop-up window momentarily appears to inform you that MetaMask has been added to your browser. You should now see a small fox icon in the upper-right corner of your browser window (to the right of the address bar), as shown in Figure 6. If the fox icon doesn’t automatically appear in your browser’s toolbar, follow these additional steps: Click the puzzle-piece-shaped icon in the upper-right corner of your browser window (to the right of the address bar). A drop-down menu appears, as shown in Figure 7. Click the pin icon to the right of the MetaMask fox icon. The pin icon turns blue, and you see the fox icon pinned to your browser’s toolbar. Yay, you’re now ready to set up your MetaMask wallet! Setting up MetaMask After you’ve successfully installed the MetaMask browser extension, you can follow these steps to set up your wallet: Click the MetaMask fox icon in your browser’s toolbar. (In my case, I am continuing to use the Chrome browser.)A new browser window appears, with a Get Started button displayed at the bottom of the page. Click the Get Started button. The page that opens shows an Import Wallet and a Create a Wallet button, as shown in Figure 8. The Import Wallet button on this page is what you’ll use if you ever need to reinstall MetaMask and recover a MetaMask wallet that you’ve already set up. Click the Create a Wallet button. On the Help Us Improve MetaMask page that opens, you can click either the No Thanks or I Agree button, depending on whether you want to share your usage data with the MetaMask development team. The next page opens, prompting you to create a password, as shown in Figure 9. Create and confirm your new password. Click the check box to confirm that you’ve read and agree to the terms of usage, and then click the Create button. A page appears that features instructions and a brief video explaining the importance of your Secret Recovery Phrase. Watch this video and read the instructions carefully. When you’re ready, click the Next button, which takes you to your Secret Recovery Phrase. Click the lock icon to reveal your private 12-word phrase, as shown in Figure 10. Write down this phrase and store it for safe keeping. This Secret Recovery Phrase represents the digital keys that provide access to your crypto wallet and its contents. Do not share this phrase with anyone. Do not skip this critical step! You’ll need your Secret Recovery Phrase if you ever need to reinstall the MetaMask browser extension or if you want to access your MetaMask wallet on a different browser or different computer. In fact, even the MetaMask Support team cannot recover your MetaMask account for you. Specifically, MetaMask’s “Basic Safety and Security Tips” state that: “MetaMask is not a cloud-based solution. If your device breaks, is lost, or has data corruption, there is no way for the MetaMask Support Team to recover this for you. This Secret Recovery Phrase is the only way to recover your MetaMask accounts.” After you’ve secured your Secret Recovery Phrase, click the Next button. The next page requires you to confirm your Secret Recovery Phrase by selecting the correct words in the correct order, as shown in Figure 11. Do not share this unordered word matrix with anyone, as I’ve (foolishly!) done here for demonstrative purposes. Using this word matrix, a hacker can easily create a program to regenerate my Secret Recovery Phrase. In fact, this hypothetical hacker could guess my secret phrase within 12! = 12 x 11 x 10 x …. X 2 x 1 = 479,001,600 attempts, which represents the total number of possible permutations of the words presented in Figure 11. Although 479,001,600 distinct guesses would be quite onerous to attempt manually, a computerized algorithm can glide through this guessing game. After you've clicked each word in the correct order to produce the correct word sequence, click the Confirm button. Congratulations! Your browser takes you to your initial MetaMask Account 1 Page, as shown in Figure 12. Going forward, you can simply access your MetaMask wallet by clicking the MetaMask fox icon in your browser’s toolbar, which reveals a drop-down window, as shown in Figure 13. (Revisit Steps 5 and 6 from the previous “Installing MetaMask” section if you need to re-pin the MetaMask fox icon to your browser’s toolbar.)

Article / Updated 12-14-2022

Simply stated, a cryptocurrency is a form of digital money. You can transfer your traditional, non-cryptocurrency money like the U.S. dollar digitally, but that’s not quite the same as how cryptocurrencies work. If cryptocurrencies become mainstream, you may be able to use them to pay for stuff electronically, just like you do with traditional currencies. However, what sets cryptocurrencies apart is the technology behind them. You may say, “Who cares about the technology behind my money? I only care about how much of it there is in my wallet!” The issue is that the world’s current money systems have a bunch of problems. Here are some examples: Payment systems such as credit cards and wire transfers are outdated. In most cases, a bunch of middlemen like banks and brokers take a cut in the process, making transactions expensive and slow. Financial inequality is growing around the globe. Around 3 billion unbanked or underbanked people can’t access financial services. That’s approximately half the population on the planet! Cryptocurrency enthusiasts say it could solve some of these problems, if not more. The basics of cryptocurrencies You know how your everyday, government-based currency is reserved in banks? And that you need an ATM or a connection to a bank to get more of it or transfer it to other people? Well, with cryptocurrencies, you may be able to get rid of banks and other centralized middlemen altogether. That’s because cryptocurrencies rely on a technology called blockchain, which is decentralized (meaning no single entity is in charge of it). Instead, every computer in the network confirms the transactions. The definition of money Before getting into the nitty-gritty of cryptocurrencies, you need to understand the definition of money itself. The philosophy behind money is a bit like the whole “which came first: the chicken or the egg?” thing. In order for money to be valuable, it must have a number of characteristics, such as the following: Enough people must have it. Merchants must accept it as a form of payment. Society must trust that it’s valuable and that it will remain valuable in the future. Of course, in the old days, when you traded your chicken for shoes, the values of the exchanged materials were inherent to their nature. But when coins, cash, and credit cards came into play, the definition of money and, more importantly, the trust model of money changed. Another key change in money has been its ease of transaction. The hassle of carrying a ton of gold bars from one country to another was one of the main reasons cash was invented. Then, when people got even lazier, credit cards were invented. But credit cards carry the money that your government controls. As the world becomes more interconnected and more concerned about authorities who may or may not have people’s best interests in mind, the idea is that cryptocurrencies may offer a valuable alternative. Here’s a fun fact: Your normal, government-backed currency, such as the U.S. dollar, must go by its fancy name, fiat currency, now that cryptocurrencies are around. Fiat is described as a legal tender like coins and banknotes that have value only because the government says so. Some cryptocurrency history In late 2022, the fate of cryptocurrency wasn't looking great. During the first half of 2022, prices fell after the collapse of some cryptocurrencies and by late 2022, many crypto-related companies were facing serious financial problems, if not insolvency. In November 2022, well-known crypto exchanges FTX and FTX.US filed for bankruptcy and their founder, Sam Bankman-Fried, was arrested in December 2022 for fraud. Yet, even after these events, many financial analysts expected cryptocurrency to recover and endure. Crypto's beginnings The first ever cryptocurrency was (drumroll please) Bitcoin! You probably have heard of Bitcoin more than any other thing in the crypto industry. Bitcoin was the first product of the first blockchain developed by some anonymous entity who went by the name Satoshi Nakamoto. Satoshi released the idea of Bitcoin in 2008 and described it as a “purely peer-to-peer version” of electronic money. Bitcoin was the first established cryptocurrency, but many attempts at creating digital currencies occurred years before Bitcoin was formally introduced. Cryptocurrencies like Bitcoin are created through a process called mining. Very different than mining ore, mining cryptocurrencies involves powerful computers solving complicated problems. Bitcoin remained the only cryptocurrency until 2011. Then Bitcoin enthusiasts started noticing flaws in it, so they decided to create alternative coins, also known as altcoins, to improve Bitcoin’s design for things like speed, security, anonymity, and more. Among the first altcoins was Litecoin, which aimed to become the silver to Bitcoin’s gold. As of 2022, the number of cryptocurrencies had soared to more than 19,000, although many of these were not expected to survive. Key cryptocurrency benefits If cryptocurrency endures, there are a number of solutions they may be able to provide through their decentralized nature: Reducing corruption: With great power comes great responsibility. But when you give a ton of power to only one person or entity, the chances of their abusing that power increase. The 19th-century British politician Lord Acton said it best: “Power tends to corrupt, and absolute power corrupts absolutely.”Cryptocurrencies aim to resolve the issue of absolute power by distributing power among many people or, better yet, among all the members of the network. That’s the key idea behind blockchain technology anyway. Eliminating extreme money printing: Governments have central banks, and central banks have the ability to simply print money when they’re faced with a serious economic problem. This process is also called quantitative easing. By printing more money, a government may be able to bail out debt or devalue its currency.However, this approach is like putting a bandage on a broken leg. Not only does it rarely solve the problem, but the negative side effects also can sometimes surpass the original issue.For example, when a country like Iran or Venezuela prints too much money, the value of its currency drops so much that inflation skyrockets and people can’t even afford to buy everyday goods and services. Their cash becomes barely as valuable as rolls of toilet paper.Most cryptocurrencies have a limited, set amount of coins available. When all those coins are in circulation, a central entity or the company behind the blockchain has no easy way to simply create more coins or add on to its supply. Giving people charge of their own money: With traditional cash, you’re basically giving away all your control to central banks and the government. If you trust your government, that’s great, but keep in mind that at any point, your government is able to simply freeze your bank account and deny your access to your funds.For example, in the United States, if you don’t have a legal will and own a business, the government has the right to all your assets if you pass away. Some governments can even simply abolish bank notes the way India did in 2016. With cryptocurrencies, you and only you can access your funds. Cutting out the middleman: With traditional money, every time you make a transfer, a middleman like your bank or a digital payment service takes a cut. With cryptocurrencies, all the network members in the blockchain are that middleman; their compensation is formulated differently from that of fiat money middlemen’s and therefore is minimal in comparison. Serving the unbanked: A vast portion of the world’s citizens has no access or limited access to payment systems like banks. Cryptocurrencies aim to resolve this issue by spreading digital commerce around the globe so that anyone with a mobile phone can start making payments. And yes, more people have access to mobile phones than to banks. In fact, more people have mobile phones than have toilets, but at this point the blockchain technology may not be able to resolve the latter issue. Common crypto and blockchain myths During the 2017 Bitcoin hype, a lot of misconceptions about the whole industry started to circulate. These myths may have played a role in the cryptocurrency crash that followed the surge. The important thing to remember is that both the blockchain technology and its byproduct, the cryptocurrency market, are still in their infancy, and things are rapidly changing. Let me get some of the most common misunderstandings out of the way: Cryptocurrencies are good only for criminals. Some cryptocurrencies boast anonymity as one of their key features. That means your identity isn’t revealed when you’re making transactions. Other cryptocurrencies are based on a decentralized blockchain, meaning a central government isn’t the sole power behind them.These features do make such cryptocurrencies attractive for criminals; however, law-abiding citizens in corrupt countries can also benefit from them. For example, if you don’t trust your local bank or country because of corruption and political instability, the best way to store your money may be through the blockchain and cryptocurrency assets. You can make anonymous transactions using all cryptocurrencies. For some reason, many people equate Bitcoin with anonymity. But Bitcoin, along with many other cryptocurrencies, doesn’t incorporate anonymity at all. All transactions made using such cryptocurrencies are made on public blockchain.Some cryptocurrencies, such as Monero, do prioritize privacy, meaning no outsider can find the source, amount, or destination of transactions. However, most other cryptocurrencies, including Bitcoin, don’t operate that way. The only application of blockchain is Bitcoin. This idea couldn’t be further from the truth. Bitcoin and other cryptocurrencies are a tiny byproduct of the blockchain revolution. Many believe Satoshi created Bitcoin simply to provide an example of how the blockchain technology can work. All blockchain activity is private. Many people falsely believe that the blockchain technology isn’t open to the public and is accessible only to its network of common users.Although some companies create their own private blockchains to be used only among employees and business partners, the majority of the blockchains behind famous cryptocurrencies such as Bitcoin are accessible by the public. Literally anyone with a computer can access the transactions in real time. For example, you can view the real-time Bitcoin transactions. Risks of cryptocurrency Just like anything else in life, cryptocurrencies come with their own baggage of risk. Whether you trade cryptos, invest in them, or simply hold on to them for the future, you must assess and understand the risks beforehand. Some of the most talked-about cryptocurrency risks include their volatility and lack of regulation. Volatility got especially out of hand in 2017, when the price of most major cryptocurrencies, including Bitcoin, skyrocketed above 1,000 percent and then came crashing down. However, as the cryptocurrency hype has calmed down, the price fluctuations have become more predictable and followed similar patterns of stocks and other financial assets. Regulations are another major topic in the industry. The funny thing is that both lack of regulation and exposure to regulations can turn into risk events for cryptocurrency investors. Gear up to make transactions Cryptocurrencies are here to make transactions easier and faster. But before you take advantage of these benefits, you must gear up with crypto gadgets, discover where you can get your hands on different cryptocurrencies, and get to know the cryptocurrency community. Some of the essentials include cryptocurrency wallets and exchanges. Cryptocurrency wallets Some cryptocurrency wallets, which hold your purchased cryptos, are similar to digital payment services like Apple Pay and PayPal. But generally, they’re different from traditional wallets and come in different formats and levels of security. You can’t get involved in the cryptocurrency market without a crypto wallet. Get the most secure type of wallet, such as hardware or paper wallets, instead of using the convenient online ones. Cryptocurrency exchanges After you get yourself a crypto wallet, you’re ready to go crypto shopping, and one of the best destinations is a cryptocurrency exchange. These online web services are where you can transfer your traditional money to buy cryptocurrencies, exchange different types of cryptocurrencies, or even store your cryptocurrencies. Storing your cryptocurrencies on an exchange is considered high risk because many such exchanges have been exposed to hacking attacks and scams in the past. When you’re done with your transactions, your best bet is to move your new digital assets to your personal, secure wallet. Exchanges come in different shapes and forms. Some are like traditional stock exchanges and act as a middleman — something crypto enthusiasts believe is a slap in the face of the cryptocurrency market, which is trying to remove a centralized middleman. Others are decentralized and provide a service where buyers and sellers come together and transact in a peer-to-peer manner, but they come with their own sets of problems, like the risk of locking yourself out. A third type of crypto exchange is called hybrid, and it merges the benefits of the other two types to create a better, more secure experience for users. Cryptocurrency communities Getting to know the crypto community can be the next step as you’re finding your way in the market. The web has plenty of chat rooms and support groups to give you a sense of the market and what people are talking about. Here are some ways to get involved: Crypto-specific Telegram groups. Many cryptocurrencies have their very own channels on the Telegram app. To join them, you first need to download the Telegram messenger app on your smartphone or computer; it’s available for iOS and Android. Crypto chat rooms on Reddit or BitcoinTalk: BitcoinTalk and Reddit have some of the oldest crypto chat rooms around. You can view some topics without signing up, but if you want to get involved, you need to log in. (Of course, Reddit isn’t exclusive to cryptos, but you can search for a variety of cryptocurrency topics.) TradingView chat room: One of the best trading platforms out there, TradingView also has a social service where traders and investors of all sorts come together and share their thoughts, questions, and ideas. Invest Diva’s Premium Investing Group: If you’re looking for a less crowded and more investment/trading-focused place to get support, you can join our investment group (and chat directly with me as a perk too). On the flip side, many scammers also target these kinds of platforms to advertise and lure members into trouble. Keep your wits about you.

Article / Updated 07-25-2022

If you plan to do any Ethereum development, you’ll likely be using Solidity, one of the most popular programming languages for smart contracts. Let’s take a look at some basic Solidity syntax. When you write Solidity source code, you save that code in a file with the extension .sol. A Solidity program has several main sections, as follows: Pragma: This tells Solidity what versions of the compiler are valid to compile this file. Comments: Developers should use comments for documenting code. Import: An import defines an external file that contains code that your smart contract needs. Contract(s): This section is where the body of your smart contract code resides. Declaring valid compiler version in Ethereum smart contracts The pragma directive should be the first line of code in a Solidity file. Because the Solidity language is still maturing, it is common for new compiler versions to include changes that would fail to compile older programs. The pragma directive helps avoid compiler failures due to using a newer compiler. Here is the syntax for the pragma directive: pragma Solidity <<version number>>; Here is a sample pragma directive: pragma Solidity ^0.4.24; All statements in Solidity end with a semicolon. The version number starts with a 0, followed by a major build number and a minor build number. For example, the version number 0.4.24 refers to major build 4 and minor build 24. The caret symbol (^) before the version number tells Solidity that it can use the latest build in a major version range. In the preceding example, Solidity can use a compiler from any build in the version 4 build range. This is a way to tell readers that your program was written for 0.4.24 but will still compile for subsequent version 4 builds. Although using the caret in the pragma directive provides flexibility, it is a better practice to drop the caret and tell Solidity exactly what compiler version you expect. Commenting your Solidity code Adding comments to your code is an extra step that adds a professional look and feel to your Solidity code. A well-commented source code file is easier to read and understand and helps other developers quickly understand what your code is supposed to do. Even simple comments can cut down on the time required to fix bugs or add new functionality. Comments can also provide input for utilities to generate documentation for your smart contracts. You can use single-line or multiline regular comments. Single-line comments start with two forward slashes. Multiline comments start with the /* characters and end with the */ characters. Here is an example of Solidity comments: // Here is a single line Solidity comment /* I have a lot more to say with this comment, so I’ll use a multiline comment. The compiler will ignore everything after the opening comment characters, until it sees the closing comment characters. */ A third type of Solidity comment is called the Ethereum Natural Specification (NatSpec) directive. You can use NatSpec to provide information about your code for documentation generators to use to create formatted documentation the describes your smart contracts. NatSpec directives start with three forward slashes and include special tags with data for the documentation. Here is an example of using NatSpec directives: /// @title Greeter smart contract /// @author Joe Programmer /// @notice This code takes a person's name and says hello /// @param name The name of the caller /// @return greeting The greeting with the caller's name Check out NatSpec documentation for additional information. Importing external code into your Ethereum smart contract The import section is optional but can be powerful when used correctly in your Ethereum smart contract. If your smart contract needs to refer to code in other files, you’ll have to import those other files first. Importing files makes it as though you copied the other code into the current file. Using imports helps you avoid actually copying code from one place to another. If you need to access code, just import the Solidity file that contains it. The syntax for importing other files is simple. You use the import keyword and then provide the filename for the file you want to import. For example, to import the file myToken.sol, use this syntax: Import 'myToken.sol'; Defining your Ethereum smart contracts In the last main section of Solidity, you define the contents of your smart contract. It starts with the keyword contract and contains all of the functional code in your smart contract. You can have multiple contract sections in Solidity. That means a single .sol file can define multiple contracts. Here is an example contract section: contract HelloWorld { string private helloMessage = "Hello world"; function getHelloMessage() public view returns (string) { return helloMessage; } } Inside the contract section is where you define all of your variables, structures, events, and functions. There's a lot more to the contract section of your code, but for now, you know how to set up a Solidity smart contract. Once you master the basics of Solidity, you can continue to develop more complex code and the sky's the limit.

Article / Updated 07-25-2022

Originally, blockchain was just the computer science term for how to structure and share data. Today, blockchains are hailed the "fifth evolution" of computing. Blockchains are a novel approach to the distributed database. The innovation comes from incorporating old technology in new ways. You can think of blockchains as distributed databases that a group of individuals controls and that store and share information. There are many different types of blockchains and blockchain applications. Blockchain is an all-encompassing technology that is integrating across platforms and hardware all over the world. A blockchain is a data structure that makes it possible to create a digital ledger of data and share it among a network of independent parties. There are many different types of blockchains. Public blockchains: Public blockchains, such as Bitcoin, are large distributed networks that are run through a native token. They're open for anyone to participate at any level and have open-source code that their community maintains. Permissioned blockchains: Permissioned blockchains, such as Ripple, control roles that individuals can play within the network. They're still large and distributed systems that use a native token. Their core code may or may not be open source. Private blockchains: Private blockchains tend to be smaller and do not utilize a token. Their membership is closely controlled. These types of blockchains are favored by consortiums that have trusted members and trade confidential information. All three types of blockchains use cryptography to allow each participant on any given network to manage the ledger in a secure way without the need for a central authority to enforce the rules. The removal of central authority from database structure is one of the most important and powerful aspects of blockchains. The figure shows the concept of how blockchains come to agreement. Blockchains create permanent records and histories of transactions, but nothing is really permanent. The permanence of the record is based on the permanence of the network. In the context of blockchains, this means that a large portion of a blockchain community would all have to agree to change the information and are incentivized not to change the data. When data is recorded in a blockchain, it's extremely difficult to change or remove it. When someone wants to add a record to a blockchain, also called a transaction or an entry, users in the network who have validation control verify the proposed transaction. This is where things get tricky because every blockchain has a slightly different spin on how this should work and who can validate a transaction.

Article / Updated 07-19-2022

Cryptocurrency miners need to keep an eye on the latest mining info to be successful. The best method of checking the pulse of the burgeoning cryptocurrency mining industry is to stay up to date using online resources, such as social media and specific online forums covering the topic. Due to the infancy of the cryptocurrency mining space, many news sources in the space can be misleading, downright inaccurate, or even propagate bought-and-paid-for content without a sponsored label. A recent study found that many of the top cryptocurrency news sites were posting sponsored content — essentially ads — under the guise of news. This kind of misinformation makes it important to stay plugged into the community and various other peer-based resources: don’t trust, verify. Check out the following list of resources to stay up with current cryptocurrency mining events: Bitcoin Talk: Use Bitcoin Talk to inquire into almost any cryptocurrency topic, including (but definitely not limited to) mining. Despite the name, it’s not just for bitcoin anymore. You’ll find many different cryptocurrencies being discussed. For example, it is where most popular alternative cryptocurrencies were announced prior to launch. Bitcoin subReddit: The bitcoin subreddit provides a great forum for lots of breaking news and current events and provides a window into the current sentiment in the community. It’s not all serious stuff, though; you’ll find plenty of memes, jokes, and other nonmining content, so do surf lightly. Bitcoin Beginners subreddit: The bitcoin beginners subreddit is an even better resource for recent entrants into the ecosystem, providing plenty of great information for newbies. CoinDesk: CoinDesk is a decent news source in an industry riddled with faulty cryptocurrency news outlets. It also provides exchange rate data from a variety of different cryptocurrencies. CoinJournal: CoinJournal is also a good source for cryptocurrency-related news, but clearly separates press releases from news articles so users can differentiate public relations from journalism. Bitcoin Magazine: Bitcoin Magazine has long been a reliable news outlet in the cryptocurrency space. Although print releases of the magazine stopped years ago, it still provides good and consistent news coverage on its website. Merkle Report: The Merkle Report curates a wide variety of relevant content from various news sources in the cryptocurrency space. It offers a good one-stop shop for news across the industry. Messari: Messari has a ton of cryptocurrency-focused data, research, and news from across the industry. It also offers a periodic daily newsletter to stay up-to-date on current trends. Block Digest: Block Digest is an excellent source of news in the form of a weekly podcast that features various community members discussing and digesting news and headlines from the Bitcoin space. Stack Exchange: The Bitcoin Stack Exchange has a large trove of questions answered by other cryptocurrency enthusiasts. Anyone can post a question or an answer. If you are looking for specific insight, chances are someone has already answered the question you may have. Why current events are important for cryptocurrency mining Cryptocurrencies and blockchains act as an immutable record of data, indisputable information that is accessible to anyone with the tools and knowledge to look for it. This isn’t the case with off-chain data, such as current events and news in the space, which is why it is very important to stay up-to-date on accurate information from reliable sources if you intend to mine cryptocurrency. Current events affect what’s going on in the mining space. They can affect the value of the cryptocurrency, and thus, in response to fluctuation in the value, the network hash rate, your percentage of the network hash rate, the amount of blocks you’ll mine, and ultimately your loss or profit. There is plethora of news sources in the cryptocurrency mining space, but not all can be trusted. Some peddle misinformation with the intent of misleading you. Staying up to date on the latest and greatest in the cryptocurrency mining industry is crucial to your continued success in the space. Reliable content is the best defense against spin and distortion from those that would lead you astray. Without information, you may find yourself mining a cryptocurrency without much future value, or on the uneconomical side of a blockchain fork. In any event, as a cryptocurrency miner, you will will have the best chance of success if you stay current with developing information.

Cheat Sheet / Updated 05-17-2022

Cryptocurrency mining is a relatively new concept that started slowly and has, over about a decade, developed into an entire industry with a wild-west-gold-rush reputation. The mining of “digital gold” in the form of cryptocurrencies is often painted as a get-rich-quick scam, with comparisons to tulip mania and the gold rushes of years past. Indeed, the industry is rife with hype, scams, and misleading promotions, and there’s a lot of room for error. However, there are profitable mining ventures, and there is still room for you, as a new miner, to profit from cryptocurrency mining if you do your research, do your homework, and plan carefully.

Cheat Sheet / Updated 03-28-2022

Ethereum is much more than just another blockchain implementation. It is a complete dApp (decentralized app) development and runtime environment. To best leverage all that Ethereum offers, become familiar with what blockchain technology can do for you and the extras that Ethereum offers. Learn the main language of smart contracts, Solidity, and how you can use its syntax to make your dApps provide value to its users. And establish a healthy respect for each of the steps in the Ethereum dApp development process so you will have more effective software.