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Top 5 Bitcoin Myths Debunked

Top 5 Bitcoin Myths Debunked

June Katz 4 min read
Despite the fact that Bitcoin has been around for over eleven years and has gained numerous supporters over the course of its existence, there are still multiple misconceptions associated with it, further endorsed even by notorious financial institutions like Golden Sachs. They are based on faulty analysis, irrelevant arguments, and outdatedinformation. The ultimate goal of understanding Bitcoin can be achieved by providing every one of such questionable statements with facts and explanations. Myth #1: Bitcoin’s volatility obstructs it to be a trustworthy financial asset In reality: It actually proves the credibility of its monetary policy People criticize Bitcoin for its fluctuations in price and see this as an obstacle to being stable or a favorable unit for storing and investing. There’s a microeconomic politics trilemma called The Impossible Trinity which explains why it can’t be any other way. Simplified, you can only have two of the three factors in a monetary unit: fixed exchange rate, independent monetary policy, and free capital movement. Any one of these factors would contradict the other two. For Bitcoin, the odd one is the fixed exchange rate. Fiat money follows the principle as well and Bitcoin’s volatility is nothing but the logical outcome based on this trilemma. Moreover, Bitcoin’s volatility declines over time. The more it is adapted, the less the fluctuations in price will be in their amplitude. Bitcoin’s purchasing power, as a result, has also shown growth despite all the volatility. Its price has been increasing by roughly 200 percent every year since 2011 despite the fluctuations within the year itself. Since 2014 it has also shown growth as demonstrated by the lowest price each year. Myth #2: Bitcoin is an isolated form of payment that is used by a small number of people In reality: Bitcoin has full potential to become the payment instrument of the future People question Bitcoin’s capabilities of being a proper investment active that won’t disappear and lose its worth one day. Another argument is that it doesn’t hold any value in it. Contrary to these arguments, Bitcoin possesses positive characteristics which can make it the equivalent of gold but in the digital world. It is transparent, divisible, safe to use, and verifiable. Experts expect continuous growing demand for Bitcoin. Currently, its market capitalization is 2 percent of that of gold.  Myth #3: Continuous forks and copies will eventually lead Bitcoin to lose its value In reality: Bitcoin’s value can’t be duplicated by software alone Bitcoin’s software is free and open-code and technically, anyone could copy it, just like users can make copies of digital files. However, this won’t necessarily increase the number of Bitcoins themselves in circulation and the new networks still comply with the same sets of rules and principles. Instead, it stimulates the market and gives the opportunity to create new projects and coins. Bitcoin still stays deficit and the number of new coins created doesn't equal in value to the original Bitcoins. It was proven that forks still couldn’t influence Bitcoin’s number of active users, hashpower, and liquidity. Myth #4: Bitcoin is mainly used for performing criminal and illegal operations In reality: It is against any form of censorship Everything that people don’t completely understand they generally label as bad or dangerous. This is the case with Bitcoin which is criticized for financing criminal and illegal operations. At its inception, it was accused of hosting a black market platform. In reality, Bitcoin is negative towards any case of censorship and puts this principle among its core values. The platform itself is as helpful to criminals as any asset in the real world, be it the Internet or mobile phones. The percentage of Bitcoin operations connected to illegal activity is actually less than 1 percent, so it is surely not used exclusively to fund crimes. Moreover, most illicit activity still happens with fiat as demonstrated by both absolute and relative terms. Myth #5: Bitcoin is a waste of energy In reality: It uses more resources than gold or banks but for the sake of safer transactions The hefty sums of money accumulated as a result of mining Bitcoin are posed as a guarantee that the transaction was made. Bitcoin’s supporters see this as its fundamental difference of the cryptocurrency from other forms of using energy. They claim that there’s a balance between the calculations made and the safety of the transaction. While Bitcoin spends more in one place, it uses less in other aspects. The estimated dollar cost of Bitcoin mining per GJ spent is 40 times more efficient than traditional banking, and 10 times more efficient than gold mining. It also uses renewable energy and has the intention to solve the problem of regions that have unused power.  Conclusion While Bitcoin is relatively complicated and new, it shouldn’t discourage its critics from doing proper research based on facts and logic rather than indulging in urban legends about it. There should be a constructive debate between its supporters and protestors. So far, Bitcoin has proven to be a good candidate for the role of the digital money of the future, to use power effectively, to have credible monetary policy, to be censorship-resistant, and independent of fork and copies.
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How to Create an NFT Token?

How to Create an NFT Token?

June Katz 5 min read
The NFT craze There probably isn’t a hotter trend in crypto right now than the NFT surge of the last few weeks. Just like in many other trends, a significant amount of celebrities and billionaires have jumped on the boat that’s taken it to the mainstream, driving overall sales by over 55% with respect to last year. This might be the new crypto gold rush, as it turns out to be an asset that can be created by anyone regardless of their following community or income level. But, what exactly is an NFT, and why should you care about it?Let’s talk about fungibility first. If I have $10 in quarter-dollar coins in my pockets, I can comfortably go to the market and get a $10 bill in exchange for my quarters, because fiat currency is very fungible. By the same token, if I have a portrait from Picasso sitting in my living room, I cannot go to the market and have it exchanged by any other item, because Picassos, unlike fiat currency, are each unique and irreplaceable, and therefore non-fungible. Around this concept, non-fungible tokens (NFTs) are created as the tokenization of a collectible digital object or art piece. All of us can google Banksy and freely download virtually all of his artwork because the Internet is flooded with pictures of his creations. These, however, are gonna be as unique as the quarters in your pocket. A very different thing is to have Banksy sign each of his paintings and mint them onto the blockchain so that there can only be one authentic copy for every piece of art that he has ever produced. That’s exactly how NFTs work. Everyone can create a piece of digital art, mint it, and sell it as the unique creation that it is. These creations are held in wallets, which also happen to be unique. Every token ID is associated with a wallet on the publicly available blockchain, meaning digital ownership is verifiable, and the authenticity of the NFT is strictly not replicable.  How to create your own NFT There are different blockchains that support different NFT token standards, with Ethereum being the largest one by far. It is important to note that there are other options like the Binance Smart Chain and Polkadot, which have their own wallet services and marketplaces that are increasing in popularity. However, the tokens you create will only be sold on the blockchain that they were minted at. The largest marketplaces at the time of writing are OpenSea , Rarible , and Mintable , all of them Ethereum-based. Since OpenSea is currently the largest, let’s use it as an example to dissect the process of creating and selling your first NFT.The first thing you’ll need to do is setting up an Ethereum wallet that supports ERC-721 standard tokens, which can be easily made at Coinbase , MetaMask , or Trust Wallet at no cost. Once you’re there, you will need to fund your wallet with around $100 worth of Ethereum that will be later required for gas fees. While Coinbase allows you to transfer fiat money to your wallet and then exchange it for Ethereum, MetaMask and Trust Wallet will both require you to transfer your ETH directly from another cryptocurrency exchange. As your wallet is connected to OpenSea and your Ethereum funds have successfully made it there, you’ll be ready to create your NFT. To do so, you’ll first need to go to the top right corner of OpenSea and click on the “Create” option, which will directly ask you to connect your wallet. After that, you’ll be requested to digitally sign a proof of ownership over your wallet, which is merely a transactional requirement that doesn’t incur any fees. That marks the end of the bureaucratic part of the process and the very beginning of your own creative digital business.Next, you should go to the “Create” option once again and click on the “My Collections” button. You’ll be shown a window where you can name your NFT collection and it will give you access to uploading your creations with their corresponding names and descriptions. This is the part of the process where you can include special features of your NFT that can increase its scarcity and make it more attractive for buyers. After that, you can proceed to determine the number of copies you want to issue and the retail price at which you want to sell.  How to list and sell your NFT The next step is to take your creation to the marketplace. It is important to know that while creating an NFT is free of charge, OpenSea and other platforms will charge you with a gas fee to list your creations on the marketplace. This is why you needed some Ethereum on your wallet, to begin with. Once you’ve decided your selling conditions, that is, whether you’d like to sell it at a fixed price or you’d prefer to run an auction, you’ll be asked to establish a seller’s fee, otherwise known as a royalty. This will give you a percentage of each sale that involves your NFT in the secondary markets, creating an attractive source of passive income that you’ll be able to enjoy all your life thanks to the self-executing nature of smart contracts.The first time you list an article on the marketplace, the gas fee will likely be high. That is because you’ll be establishing a personal trading smart contract for your wallet, which is a step of the process that only needs to be done once. Everything you want to sell after your first creation will be free of charge unless you decide to list your items in a different currency than ETH. In that case, there will be much smaller gas fees than the one you’ll have to pay on your first listing.  Is it a good time to enter the NFT market? The hype around the NFT space is real, as every day more and more artists and celebrities decide to take part in what might be the future of art and collectibles. NBA’s Topshot has made over $230 million in gross sales of highlight videos of their top stars. Grimes has sold over $6 million among images and short videos related to her music. Beeple had never sold a piece of his artwork for more than $100, until he sold $69 million worth of art over the last weeks. While it does help to have a large community of followers or a large audience that you can easily target, the price to pay as an artist is simply the initial gas fee and the amount of time it takes you to create the next work of art. So, now that you know how to sell your creations, are you ready to see how much your creativity can be worth?
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Which Cryptocurrencies Have the Lowest Transaction Fees?

Which Cryptocurrencies Have the Lowest Transaction Fees?

June Katz 7 min read
While cryptocurrencies have been around for a long time, they are still confusing for many people. The less obvious and common concern about cryptocurrencies is the so-called transaction fees that differ from one coin to another and how to find the cheapest of them.  What is a crypto transaction fee? A crypto transaction fee is essentially a fee that is charged to users when transferring coins from one account to another. In order for the transaction to pass and be recorded in the blockchain, a certain transaction fee is taken. It varies from coin to coin and depends on multiple factors which we will analyze in this article. The main purpose of a transaction fee is to make sure the transaction is validated to keep the corresponding platform running and developing – thus, to secure transactions.  Types of transaction fees While we usually think of a transaction fee as the network commission of a certain cryptocurrency, that is, one operational transfer of its coins to another address, it’s also worth considering other types of fees that currently exist.  Blockchain transaction fee, or network fee Blockchain transaction fee is a kind of fee used as an incentive for the miners on the network. Mining (and staking as well) commissions or transaction fees are small amounts of cryptocurrencies assigned to miners to process a transaction. These small payments reward the miners and stakers for the work done. All new transactions on the blockchain are recorded in blocks at regular intervals. The first record of all new transactions is made by the miner who managed to get the next coin. In addition, he also receives a reward for this operation.  Crypto exchange fees Apart from mining commissions, there are also exchange fees. All cryptocurrency exchanges charge fees from their users, it’s one of the ways they make money along with selling advertising space and charging listing fees from ICO teams that want to see their token at an exchange.  Wallet fees Another kind of commission is wallet fees that are charged for using a particular wallet. The money goes towards software development and maintenance of a digital wallet. There can also be withdrawal fees for when you want to take out a certain amount of coins.Notably, the more confirmations there are by most crypto wallets and exchanges, the better. This follows the general logic, according to which, with such a number of confirmations, the probability of this transaction being fake becomes rather low. Due to safety purposes, this number can be further extended in cases of network overload and 51% attacks. Cryptocurrency with lowest transaction fees Naturally, people are interested in finding the lowest fees. Cryptocurrencies are already tricky and complicated enough, so a common concern is not losing money due to the fluctuations in the market and the hefty fees as well. Generally, the medium crypto transaction fee on the market is about $0.15-0.25 (and up to $25 for Bitcoin and Ethereum in a busy time like now). Here’s a list of the cheapest cryptocurrency transaction fees of the most popular coins according to the data of BitInfoCharts (March 2021). This data is approximate and can change after the time of the article being published so it’s worth double-checking on the official sources before making transactions. The list goes as follows: Ethereum Classic : transaction fee is so low that starts from $0.00023 Bitcoin SV : has an average transaction fee starting from $0.0005 Bitcoin Gold : at the moment, the cheapest transaction fee for BTG coin is about $0.00063 Reddcoin : RDD's transaction fee is $0.00089 Vertcoin : 0.002 dollars fee in average Bitcoin Cash : 0.0025 USD fee per transaction Dash : exchange fee equals $0.0051 Litecoin's fee is $0.042 DOGE : while Doge itself costs less than a dollar, its transaction fee of $0.242 remains extremely low, What are the lowest fee cryptocurrencies? Zero-fee cryptocurrencies Nano: cryptocurrency without transaction fees Surprisingly, zero-fee cryptocurrency exists, and this is Nano. Except the lowest crypto fee in our list, the coin masters claim near-instant transactions. Nano works by utilizing Delegated Proof-of-Stake consensus mechanism with a block lattice architecture where accounts have their own blockchains. It essentially means no need to incentivize miners for keeping the network secure using selected representatives instead. It ensures the cheapest transaction fee comparing to a traditional blockchain. Dash: cryptocurrency almost without fees Well, almost zero-fee, though it’s usually called feeless. The very point of Dash cryptocurrency is to be a fast and near feeless means of payment among people and businesses. On the official website, it is promised that with the help of Dash you can “say goodbye to chargebacks” – indeed, it’s quite profitable compared to other money transfer methods. Just check, any size transaction’s fee is less than $0.01, let alone they will remain anonymous!  IOTA: tech novelty to ensure transactions without fees One more cryptocurrency without blockchain in the list! IOTA literally charges no fee, demanding to validate two more transactions while creating one instead. You don’t need to incentivize miners if you as a user are a small miner yourself, huh? Parameters that influence cryptocurrency fees? While deciding on such parameters, it’s important to consider several factors. The amount of the fee charged can depend on how busy the native network of the coin is . For example, Ethereum currently has an average transaction value of 0.011 ETH equal to 19.41 USD which is much bigger than the average transaction value. This can also be explained by the fact that the system needs to run complicated decentralized apps. Following the previous example, a good rule of thumb when analyzing the peculiarities of the coins that influence their fees is also calculating how much is charged compared to the current value of the coin or token on the market. For example, Dash trades at $161.66, while its average transaction value is $0.0051. Transaction speed also influences the transaction fee. It can be standard, which is currently the most relevant case for the networks, and you can also set a custom option if you want your transaction to go faster. Bitcoin is a good example of this since its volatility results in exchange rate fluctuations and time becomes the defining factor in this case. Traders are willing to pay an increased commission so they don’t lose on such fluctuations.The fees charged also depend on the amount of crypto you are intended to transfer, how abundant it is, how much of the total amount of the coins is currently in circulation. The amount of the fee also depends on its native network. For example, Bitcoin, Bitcoin Cash, and Bitcoin SV all have different transaction values. On several blockchains like Ethereum and in the case of Ethereum-based coins, the amount of the transaction can also depend on how busy the network is. In some cases, no transaction fees are charged, as is the case of IOTA. You need to take multiple factors into account when analyzing the fees. When in doubt, it’s also worth comparing the fees to those of other cryptocurrencies, similar in price, purpose, and popularity. Where can you find current low cryptocurrency fees? When you want to find the lowest cryptocurrency fees, consider that such fees change dramatically over time. You can get this info online: check the websites like Bitinfocharts to find current network fees for old but gold cryptocurrencies and keep an eye on the brand new developments – probably one day it will be possible to invest without fees entirely. To find the data about exchange or wallet fees, just check the FAQs of the exchange service you use. It won’t be complicated to imagine the final numbers since you know the difference we described above. Check the compilations of exchanges with the lowest fees if you are interested in trading as well – for example, on SwapSpace you can see the difference in various exchanges’ rates onscreen, and this helps to find a good deal. Exchange crypto with best rates SwapSpace provides exchange options for more than 420 cryptocurrencies and tokens and 150,000 exchange pairs, including zero and low-fee coins. Here you can find the rates based on 12 different exchanges and choose the lowest-fee cryptocurrency exchange. Exchange Nano and Dash and without extra fee added.
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What Is NFT? Non-fungible Tokens Explained

What Is NFT? Non-fungible Tokens Explained

June Katz 7 min read
Many call 2021 the year of NFT. We see the evidence of this even outside the crypto world when we hear news about NyanCat being sold or music artists promoting their work and using NFT to monetize it. Even though there’s an undoubtable influence of NFT on people and pop culture, many still don’t know what it is and whether it’s worth paying attention to. Let’s have a look at the definition of NFT, whether it has value and what projects are associated with it.  What is NFT? NFT is a so-called non-fungible token. Any item that is unique due to its characteristics and cannot be formally replaced with the exact same one is considered non-fungible. In contrast, any fiat currency is a classic example of an interchangeable, fungible asset since any dollar bill is equal to another dollar. In the crypto world, there are also fungible kinds of coins like Bitcoin or utility tokens, that can be exchanged one for another. NFT, on its own, is an indivisible token that represents a unique item, digital or existing in real life. It is typically used for digital art, games, and collectibles. Despite all the differences, NFT still runs on the blockchain network and there are two types of new standards created specifically for NFT: ERC-721 and ERC-1155. There are quite a lot of opinions about this type of token in the crypto community. Some say that NFT is the next big thing in the world of cryptocurrencies, but others say that the scale of the NFT market and its user base is limited and that the hype around NFT will eventually cease. Undoubtedly, 2021 has marked a boom in NFT so let’s analyze why exactly it is trending and what are the reasons behind people saying that it will soon overperform DeFi. Why are NFTs important? Fundamentally, an NFT is a digital certificate that represents a unique object. The token will already contain all the information about the given object, as well as an exclusive right to it. When we own, buy, sell, or exchange a token, we perform all these operations with the product itself. Since the tokens are stored in an open and distributed blockchain, information about this product, its owner, and the history of transactions with this product will always be available and reliable. We can always know who made what product and who it currently belongs to. NFT technology potentially allows you to tokenize, that is, transfer any product to the blockchain. One can attach NFT to any digital product like images, videos, audios, or GIFs. The tokens can also be used to prove the ownership of a given item like virtual land and to validate the authenticity of the crypto asset. NFT allows you to digitize the interaction with any virtual and physical goods like digital art, weapons, skins, characters. There are numerous NFT marketplaces, such as SuperRare, Nifty Gateway, Rarible, where users trade collectible items. Why do NFTs have value? Tokenization adds many useful properties to any digital product that increase the value of this product. Firstly, they present ownership and inviolability. When your digital asset is decentralized, it does not depend on the system in which it is located. This is especially true for game items. You buy them, but you own them as long as the developer company allows you to. With NFT, you have a certificate of ownership of a given product. During the transaction, all computers connected to the cryptocurrency network enter data about it in the general chain. Such public records serve as evidence of authenticity, and they cannot be changed or erased. The tokens are also unique and scarce which adds value to the product. On NFT-based platforms collectors can build a network and content creators can express themselves freely and find new audiences and markets. They can be sure that their art won’t be distributed illegally without their consent. The tokens also have liquidity. One can check the originality of a digital work which makes it easier to sell. Another advantage of the tokens is their interoperability. A given item can be used within different platforms, as long as the developers allow users to do that. The tokens are also programmable which means that the items can possess complicated characteristics within themselves.  NFT and digital art The history of NFT started mainly with digital art. On the Internet technically anyone can save a copy of your work and NFT solves the “right-click problem” associated with art. Thanks to the programmability of NFT, it allows the artists to have full control over what happens with their work. By making royalties automatic, for example, artists can receive a percentage of each resale of their work. The commission is registered in the smart contract and goes to the artist’s crypto wallet automatically. This ensures that they get credit for the work and doesn’t depend on the person reselling the work.  Best NFT artists and art projects Currently, these are the most famous and recognizable artists on the NFT network: Beeple, Coldie, MBSJQ, Muratpak, Hackatao, and Fewocius. Many of them operate on platforms for publishing and exploring digital art like SuperRare, Nifty Gateway, Rarible, OpenSea. Some artists like JOY and Josie have used their smart contracts to create real brands. Cent, a social network with a unique micropayment system, has become a relatively popular community where people can share and discuss crypto creations.  SuperRare is one of the first platforms used for rare editions of digital works. It has strict pre-moderation, as well as high quality of work and prices. Nifty Gateway as a popular platform for crypto art has mass drops when one work is sold in several copies. The largest sales in terms of revenue are organized on this platform. For example, Beeple sold $3.5 million worth of works on Nifty Gateway in one weekend. OpenSea is the largest marketplace for NFTs in general and crypto art in particular. Most secondary sales are made on OpenSea.  Rarible is the most democratic platform. Anyone can tokenize their work. In general terms, Rarible is not only for crypto-art but rather a marketplace for any NFT. Other popular NFT projects CryptoKitties Many attribute NFT’s popularity to CryptoKitties , a collectible blockchain game created by Canadian-American studio Axiom Zen. It has built a bridge between blockchain and entertainment. One can nurture a virtual kitten and cross it with another one in order to get a new pet with unique characteristics and sell it.Despite the simple idea, the platform possesses complicated technology. Information about animals is stored in the Ethereum network, and the rules of the game are spelled out in a smart contract. Being programmable, the items in the game possess different characteristics. Each crypto cat has a combination of different properties, such as age, breed, or color. After the crossing of two unique kittens, there is one new cat with a unique 256-bit DNA, derived from a mixture of the parents' DNA and from random mutations. The DNA of a new cat sets its appearance according to the rules defined by the developers. The game also has a commercial component. You can put kittens up for sale, offer them for mating for the desired price and get the money by giving the kitten, or buy one. The virtual animal can only be purchased for Ether. Now, 11% of all transactions in the Ethereum network account for the purchase of these pets. СryptoPunks CryptoPunks , another NFT token project, was launched even before CryptoKitties. Tokens represent the heads of punks made in pixel art. Each punk has different attributes, such as background color, accessories, or an unusual appearance of an alien or a zombie. There are currently 10,000 cryptopunks in circulation, all with unique features. At its inception, CryptoPunks weren't separate tokens, but rather a trading platform that could be used with wallets like Metamask. This certainly simplified interactions and lowered the NFT entry threshold. Moreover, these tokens are compatible with wallets and platforms on Ethereum, although they are based on the usual ERC20, and not on the more modern ERC721 and ERC1155. Сrypto Stamps  Crypto Stamps is another project connected to NFT. Essentially, these are stamps issued by the Austrian postal service. Like any others, they are used to mark postal items, but the main feature is that they are stored as digital images on the Ethereum blockchain, making them available for sale as digital collectibles. This project has connected the digital world with the real world. Conclusion NFT is called the main trend in the blockchain in 2021. There are many use cases for such tokens, and it is likely that many developers will soon offer new, exciting innovations for this promising technology.This technology has already revolutionized the art of the game in particular. There are quite a lot of advantages of blockchain gaming. For users, this is an opportunity to easily exchange in-game assets without the participation of intermediaries. Developers can use the blockchain to generate additional revenue from the sale of game items and tokens, as well as attract new users. The development of the NFT market allows content creators to sell works of art directly to the audience, without intermediaries. Digital collectibles are opening up blockchain technology to completely new industries beyond traditional financial management applications. Representing physical assets in the digital world, NFT tokens can become an important part not only of the blockchain ecosystem but also of the economy as a whole. NFTs have investment value as a popular area that can help blockchain technology achieve mass adoption.
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Wrapped Tokens Explained: What Are Wrapped Tokens and How They Work

Wrapped Tokens Explained: What Are Wrapped Tokens and How They Work

June Katz 4 min read
Ever wondered whether you can perform operations with cryptocurrency outside of its native blockchain? Unfortunately, you can't, at least not directly. This inability to migrate crypto assets from one blockchain to another can be considered by some among the most frustrating problems facing the crypto community. And while there currently is no direct way that would allow using Bitcoin on the Ethereum blockchain, a wrapped crypto token is the next best thing to a completely seamless transition between blockchains. Wrapped tokens explained Wrapped tokens are designed to allow the use of cryptocurrencies across blockchains, without forcing users to resort to selling crypto assets when they wish to trade on a platform utilizing a different blockchain. Essentially, a wrapped crypto token is a special cryptocurrency the value of which is tied to the value of another currency (similarly to stablecoins, the value of which is tied to fiat money like USD). The token is best imagined as a stand-in for a currency that is non-native to some blockchain. Using wrapped tokens allows the holder to preserve their original assets by securing them in a special digital vault. The original asset, however, remains inaccessible to the original owner while the token is in circulation. Though one can still retrieve their original assets, this will require a special notification to be given, which would pull the token out of circulation and destroy it. After this is done, the original crypto asset is released from the vault and given back to the holder.To explain in more detail, let’s look at the process of how wrapped tokens operate. In order for a wrapped token to be created, it requires a custodian – someone or something holding a certain amount of crypto assets. The value of the created wrapped tokens needs to be equivalent to the value of these assets. A custodian is usually a merchant, a multisig wallet (a type of wallet that requires several signatures for access), a DAO (Decentralized Autonomous Organization – an automated and crowd-sourced investment organization, which operates similarly to a venture fund), or a smart contract. A custodian receives a certain amount of crypto, let's say 1 BTC, from someone who wants to trade on an Ethereum-based platform. The transferred BTC is then placed to a digital vault, “wrapped”, while an equal amount – 1 WBTC – is minted on the Ethereum blockchain. The value of the WBTC is tied to the value of BTC and changes in real time accordingly thanks to a smart contract algorithm. In case the client wants to exchange WBTC back to BTC, or “unwrap” it, he or she issues a request to the custodian, who burns the WBTC and releases the BTC back from the vault. Proof of the transactions is stored on the blockchain. It is important to note that there is a fee (gas) involved in wrapping and unwrapping the cryptocurrency. Wrapped tokens on Ethereum and the Binance Smart Chain (BSC) You can use wrapped tokens on both Ethereum and Binance Smart Chain. In the case of Ethereum, such tokens can be utilized instead of non-native Ethereum assets – tokens that originate on other platforms – in order for them to be compatible with ERC-20 (the standard that is used on Ethereum to issue tokens). Similarly, on Binance Smart Chain various cryptocurrencies such as Bitcoin (BTC), Ether (ETH), USDT, and others can be wrapped with the help of Binance Bridge into BEP-20 tokens. They can then be bought or sold, or used for different purposes, such as yield farming (lending your funds in exchange or fees in crypto).Interestingly enough, ETH (or Ether), which is needed to pay for transactions on the Ethereum blockchain, predates the ERC-20 standard. This means that Ether needs to be converted into the ERC-20 token, despite being native to the blockchain. To do so, you need to wrap Ether (ETH) into wETH, thus creating a tokenized version of Ether. Pros and cons of using wrapped tokens The most obvious advantage of wrapped tokens is based on the fact that various standards differ across various blockchains, and these standards aren’t compatible with one another. Wrapped tokens help overcome this problem, allowing you to use tokens on a blockchain without them being originally non-native to it.Secondly, wrapped tokens help build connections and contribute to increasing liquidity. Capital efficiency is increased by the proliferation of wrapped tokens as idle and disconnected assets are “put to work”: tokens allow for more assets to potentially become traded and utilized in transactions, while also building bridges between different platforms.Finally, wrapped tokens can help avoid extra fees and increase transaction speed.However, as with everything else, wrapped tokens are not without disadvantages. Tokens do not allow genuine blockchain-to-blockchain migration, and therefore require the presence of a trustworthy third party. This, of course, means extra fees to pay for the user.Conclusively, while wrapped tokens are not ideal and do not allow for true blockchain-to-blockchain transactions, they nevertheless help connect different blockchains to one another bridging the gaps in decentralized finance and making crypto-capital more efficient.
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What Are DeFi Liquidity Pools and How Do They Work?

What Are DeFi Liquidity Pools and How Do They Work?

June Katz 4 min read
Gone are the days where trading was exclusively done by the order book model, where someone willing to sell would have to find someone willing to buy at the same price for the trade to become successful. The presence of market makers willing to buy and sell at any given time would eliminate the liquidity problem. In a world with no transaction fees this would be the optimal solution, although that’s not particularly the case for crypto markets, where gas fees have been steadily increasing for the past months. DeFi liquidity pools have become the solution to this problem, and here’s exactly why.Let’s say you put a single pair of different tokens into a pool and you lock them in a smart contract. That single transaction creates a market at which the price of a token depends upon the price of the other, which is why the first liquidity provider (LP) sets the initial price of the assets. This incentivizes the LP to supply an equal value of the two tokens, given that if they decide to diverge from the current global price of any of the tokens, an opportunity for arbitrage will be created and the LP might suffer a capital loss. Consequently, all the following LPs that decide to add more tokens to a liquidity pool, must follow the rule of equal value among both tokens. Each token swap occurring in a liquidity pool is followed by a price adjustment set by an algorithm known as the Automated Market Maker (AMM), the mechanism through which the product of tokens can be held constant. For instance, if someone buys ETH from a DAI-ETH pool, the quantity of ETH will decrease, which will then push the price upwards. At the same time, the relative price of DAI will decrease as the AMM will force the quantity of DAI to increase to compensate for the loss of ETH on the pool. A large trade on a small pool will affect the relative prices significantly. Hence, the larger the pool, the bigger the size of trades it can accommodate without seeing big fluctuations in prices.  What are examples of major DeFi liquidity pools? Uniswap Uniswap is a decentralized token exchange that operates with a 50% reserve of Ethereum contracts, and another 50% reserve of ERC-20 tokens, such as Maker (MKR), or Tether (USDT). Trading ETH for any of the ERC-20 standard tokens can be done through this open-source platform, which also allows you to provide liquidity to the pool by simply depositing any pair of the supported tokens at a 50/50 ratio. In exchange, you’ll receive an equivalent amount of Uniswap tokens that will entitle you to collect the proportional amount of a 0.3% fee distributed among all Uniswap token holders, for every trade taking place at the pool. The most popular pools on Uniswap include DAI-ETH, ETH-USDT, and WBTC-ETH. Balancer  Initially a digital exchange platform, Balancer has transitioned into one of the most exciting DeFi liquidity pools of the moment. In this non-custodial portfolio manager, users create funds based on the cryptocurrencies in their portfolios. These do not need to follow the standard 50/50 proportion that helps keep the AMM constant, as Balancer supports pools with up to 8 different tokens. Moreover, providing liquidity to a Balancer pool is rewarded with their own BAL tokens and a portion of the trading fees whenever the network uses their liquidity to trade. MKR-WETH, BAL-WETH, and WETH-DAI-USDC are among the most popular pools of Balancer. Bancor Based on Ethereum, Bancor is a liquidity pool platform with some interesting features that make it stand out against other competitors. It uses similar AMM mechanisms as Uniswap or Balancer, although it has a varying transaction fee that usually oscillates between 0.1 and 0.5%. Furthermore, its pooling system allows Ethereum, EOS tokens, its own BNT token, and its stable coin USDB. The most popular pools on Bancor include USDT-BNT and USDC/BNT. What are the risks of DeFi liquidity pools?  One of the most common risks associated with DeFi liquidity pools is a phenomenon known as impermanent loss. When someone is holding a digital asset in their wallet, their market value may increase or decrease as the markets determine their price. However, when a digital asset held at a liquidity pool appreciates with respect to its pairing token, there is room for arbitrage. Outsiders may come to the pool and buy that same asset for a cheaper price, and then sell it in the global markets to gain a profit. If the liquidity provider decides to withdraw their assets at this point, their loss will become permanent, whereas if they leave it on the pool and wait for the prices to match again, their loss will have just been temporary, and therefore impermanent. Another risk that has been faced previously is smart contracts failure. This usually happens when the platforms are not audited or their coding security isn’t secure enough to resist data attacks.  What are the benefits of DeFi liquidity pools? Becoming a liquidity provider has proven to be a profitable activity that has led to the expansion of platforms like Uniswap. Easing the problem of liquidity for a rapidly growing community not only strengthens the network and facilitates trading, but it also allows liquidity providers to earn transaction fees from each trade that happens on their pool. Additionally, rewards in the form of platform tokens are a standard incentive for liquidity providers, as the platforms want their token pools to preserve their size and increase it more than anything else. These tokens usually increase their market value as the project unfolds successfully, which has happened over the last month with Uniswap and SushiSwap tokens. How can I join DeFi liquidity pools? Each platform keeps its own procedure to gain access to its pools, although, for the most part, a standard Ethereum wallet will need to be connected to your new account on the desired platform, and after the corresponding verification processes you will be able to start depositing tokens on the pool of your choice. While it is never a difficult procedure to carry out, it is important to keep an eye on the returns, transaction fees, and the exchange rates.
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8 Platforms for Earning Tokens: How to Get Crypto Without Investments?

8 Platforms for Earning Tokens: How to Get Crypto Without Investments?

June Katz 3 min read
Unknown to many, there are numerous other ways to get cryptocurrencies, apart from trading and mining which are the most common and straight-forward ones. In any case, it should be clear that no method, however ubiquitous or unique it is, guarantees instant money. Profiting off crypto or getting gratification for using a particular service always requires some investment from your end, whether it be learning about complicated nuances of the world of crypto, having a basic theoretical base, or putting in money and time. Even less complicated methods like a Bounty or Airdrop where you get a certain number of tokens for free require some degree of preliminary research about the project associated with the token as to not spend resources in vain. It’s also worth learning about less common and not so obvious ways of making gains with crypto which don’t necessarily involve financial investment or special equipment. Tokens for publishing and reading articles There are services that reward people for publishing articles or spending time reading them, as well as inviting new readers and authors to the platform.  Publish0x For example, on Publish0x , you can earn Ethereum, Ampleforth, and Harvest Finance (FARM) tokens either for writing or reading articles. By the way, join our blog to get the news first – and, of course, get paid for reading. Steemit Steemit , the first and largest platform for publishing and reading content, is also positioned as the largest social network on the blockchain. The platform has multiple means of reward: STEEM, Steem Power, and Steem Dollars. The amount of token gratification depends on the number of views, likes, and comments received. Tokens for uploading videos There are alternatives to traditional YouTube in the crypto world as well. They are decentralized and involve no third parties.  D.tube One of such services is D.tube – a platform where users can get tokens for uploading videos. The amount of financial gratitude may vary. LBRY and Odysee On a similar platform, LBRY , which claims to be the first digital market ruled by the people, it is paid in the form of LBC, currently equivalent to 0.013 USD. The developers of LBRY have also created another similar platform called Odysee at the end of 2020. The website is built on top of the LBRY blockchain protocol and has a couple of community guidelines regarding the content of the videos posted. Tokens for online shopping Dealbit One can also get cashback for online purchases in the form of crypto coins. For example, on Dealbit one can get Bitcoin and Ethereum. The platform gives up to 20 percent of the amount spent on a purchase in the next few days. However, this method might not work in a specific country and might require installing additional software.  Tokens for contributing to science BOINC An open-source project called BOINC brings together the computing power of individual users for scientific research. Individuals who provide unused power from their computers are rewarded with Gridcoin tokens. Conclusion  As demonstrated, there are numerous alternative ways to get tokens, clearly not limited to the ones discussed in this article. When choosing a particular method, pay attention to the kind of service provided by the platform associated with the token and choose the most suitable for you. It’s also worth paying attention to what kind of activity you are interested in and how doing it contributes to a particular platform while you get gratification for providing this.
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How to Choose a Crypto Loan Platform

How to Choose a Crypto Loan Platform

June Katz 4 min read
Crypto lending platforms allow us to take out a loan usually in fiat money or stablecoins and back it up with cryptocurrency. The borrower of the loan has to put up an amount of cryptocurrency higher than the loan as collateral. Some of the platforms connect lenders with borrowers directly, while others act as lenders themselves.Crypto lending is an attractive investment opportunity to get your crypto assets working for you. Investing in a crypto loan platform can produce continuous passive income from your assets. Conversely, in the case that you need liquid funds, but do not want to part with your crypto assets, you can use them as collateral to get a loan in fiat money or stablecoins for additional investments in cryptocurrency while keeping your initial investment.Currently, there is a large market of multiple crypto lending platforms and in this article, we present some of the main ones to help you get acquainted with the possible choices. CoinLoan CoinLoan is an Estonian platform that is compliant with EU regulation. It is based on a P2P system and works with both fiat money, several cryptocurrencies, and stablecoins. Borrowers choose the loan amount, repayment term up to two years, and loan-to-value ratio or LTV (the ratio of the loan amount to collateral) up to 70%, depositing the preferable currency as collateral. The interest rate is dependent on the chosen LTV, with an LTV of 20% corresponding to an interest rate of 4.5%.The investing period is unlimited and investors who hold 2500 CLT can earn as much as 10.3% interest when depositing stablecoins or fiat money (EUR). If you do not hold the necessary amount of CLT the rate is 2% lower. The minimum investment is 100 EUR.  Interest rates for lenders: ETH 6.4% TUSD 10.3% BTC 6.4% BlockFi BlockFi is a company based in New York. It offers to take up loans in USD by putting up collateral in Bitcoin, Ethereum, Litecoin, or PAXG. On BlockFi the interest rates are relative to LTV, with the lowest LTV 20% corresponding to a rate of 4.5%. This platform does not connect users directly, so investors do not need to worry about their funds not being put to use immediately.  For lenders, BlockFi offers to open an interest account with rates going up to 8.6% relative to the investment period. Furthermore, you can get your funds back at any moment as you are not bound by a contract.  Interest rates for investors: USDC 8.6% USDT 7% ETH 5.25% YouHodler YouHodler is a fintech company working with fiat money, crypto, and stablecoins. Borrowers can use any of the top 20 coins as collateral. The company works with its own fiat-funds and guarantees that borrowers receive instant cash. YouHodler offers high LTV ratios going up to 90%, with LTV depending on the loan period – 90% for 30 days, 70% for 60 days, and 50% for 180 days. Additionally, you only need to repay your loan in full to get back your collateral. Otherwise, YouHodler will use part of your collateral for repayment and deposit the rest to your account. Investors can earn passive income by depositing their funds to YouHodler multicurrency wallet, so you can invest in more than one cryptocurrency.  Interest rates for investors:  ETH 4.5% LINK 6.2% TUSD 12% Celsius Celsius is a UK-based platform that offers loans in USD with several cryptocurrencies used as collateral. At the moment the annual percentage rate for a loan starts at a meager 1% when paid in cash or 0.7% when paid in Celsius tokens (CEL), with the highest percentage being 7.95%. The annual percentage is dependent on the LTV ratio at 25%, 33%, and 50%. The loan repayment period is fairly flexible from 3 to 36 months.  For investors Celsius offers attractive rates for some of the biggest cryptocurrencies: ETH 7.06% or 9.65% in CEL TUSD 11.55% or 15.89% in CEL USDT 11.55% or 15.89% in CEL Squilla Loans Squilla Loans is another Estonian P2P platform. It is suitable for both lending and taking out loans in USDT with ETH and BTC used as collateral. The peculiar thing about Squilla Loans is the extent of flexibility, such as setting your own interest rates. The lowest possible rate that you can set is 6%, LTV is extremely adjustable, though going up only to 65%, and there is no minimum loan amount. The procedure of connecting lenders with borrowers is quite straightforward: the borrower creates a request with their own conditions stated and the lender has the choice to accept the request. Another advantage of Squilla Loans is low fees for both sides. At Squilla Loans regular security conditions are in place: invested funds are kept safe by overcollaterization and additionally with cold storage.  SALT Lending SALT is a crypto lending US company registered in 2016, which was one of the first of its kind. Users taking out loans can use an array of different cryptocurrencies as collateral, such as Bitcoin, Ethereum, Litecoin, Dogecoin, and many others. SALT offers flexible LTV ratios at 30% to 70% and an annual percentage rate from 5.95% to 11.95% relative to LTV. The minimum loan amount is higher than average sitting at 5000 USD and the period for repayment is 3 to 12 months. In contrast to its competitors, SALT functions exclusively as a lending platform and does not allow investors to earn interest by contributing to the company’s liquid funds. As for security, SALT offers cold storage and a multi-signature process.
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What Is DeFi: Decentralized Finance Explained. Part 2

What Is DeFi: Decentralized Finance Explained. Part 2

June Katz 8 min read
In the first part of this article, we laid the groundwork for better understanding what DeFi fundamentally is and what it is made up of. Now it’s time we went further and examined the actual pearls that it offers at the most practical level, warts and all. So buckle up and enjoy this quest for DeFi’s treasures with us! Decentralized exchanges Decentralized exchanges, or DEXes, came before the notion of DeFi as such has emerged. More correctly, DEXes were the DeFi back in the day for the sole reason that there was nothing else that would truly qualify as DeFi beyond them. This is not to say that the field has been stagnating all these years. On the contrary, with the emergence of automated market makers, it has become one of the cornerstones of the entire space. That’s another reason (besides purely chronological) why we start off with decentralized exchanges here.Earlier implementations of DEXes followed the traditional design where buy and sell orders are matched against each other in the so-called order book. The order book database itself can be off-chain or on-chain. But what sets these exchanges apart from centralized trading places like Binance or Bitfinex is how the user’s assets are stored. With Ethereum-based exchanges, such as IDEX or EtherDelta , users maintain the sole custody of their private keys, and all trades must be authorized by them, while an exchange smart contract trustlessly stores the assets. That was a huge step forward from custodial exchanges fraught with way too many hacks, scams, and third party risks like funds arbitrarily blocked or confiscated. But in terms of popularity, which translates into trading volumes, order book-based decentralized exchanges failed to set the world on fire. What really ignited the fire of DeFi, though, and made this idea actually popular among the trading public and beyond was the invention of reserve-based trading aka automated market makers (AMMs) and the advent of DEXes featuring this model. Uniswap is the new king on the block, and as of this writing, according to Dune Analytics its market share surged to over 60% in the 7-day trading volume among all decentralized exchanges, irrespective of the order matching engine. But it is not the only fish in the sea as with anything popular the space quickly gets crowded. The top dogs like Curve , Balancer , 0x , dYdX , to name but just a few, can take over the packmaster any moment. But what’s even more important, they are now starting to compete with regular exchanges, and that’s a big deal. Decentralized stablecoins As we highlighted in the first part of this article, initially, the idea of stablecoins was to allow crypto traders and investors to store the value of their accumulated wealth in cryptocurrencies without falling victim to volatility, especially on exchanges that didn’t offer the so-called on-ramps and off-ramps (fiat gateways). Today, their usage has massively extended to DEXes where trading plain crypto-to-fiat pairs is still impossible due to the nature of these exchanges. Decentralized stablecoins pegged to fiat currencies easily solve this problem.The decentralized sector of this space is largely dominated by MakerDAO and its flagship product – the stablecoin DAI, the primary provider of the on-chain financial stability. To maintain its peg to the US dollar, it utilizes the so-called collateralized debt position. In layman terms, the currency peg is kept through the balance of the available supply of DAI and the market value of its collateral. The higher the value, the more DAI can be created, and vice versa. At the outset, it only used Ether as collateral, but today it uses a select crypto portfolio. There are several other projects relying on this model, for example, Augmint with its A-EUR token pegged to the euro, and EOSDT featuring an EOS blockchain-based USD stablecoin. However, most other projects in this realm go with different, more flexible approaches such as elastic supply aka dynamic peg ( Ampleforth ), where the supply expands and contracts algorithmically based on demand, and self-collateralized models used by, for example, BitShares , with its BitAssets like BitUSD, BitEUR, BitGold, and similar digital assets.  Decentralized lending & borrowing Lending & borrowing are like the two sides of the same coin – one is not poss4ible without the other. Decentralized variety of it is no particularly different: lenders provide loans to borrowers taking crypto assets as collateral, who, in turn, enable the lenders to earn interest on their digital assets. It’s very similar to a loan from a bank, with borrowers and depositors on both sides but without the bank as an intermediary in between. A pretty simple setup. So let’s now check what makes it actually work and which services are available to us in the wild. As with virtually everything in DeFi, decentralized lending & borrowing is done via smart contracts which make both parties stick to their ends of the bargain. But what’s in it for the lenders and borrowers, you may ask? Given that lending requires overcollateralization at the bare minimum of 150%, with an average ratio well over 300% across the market, lenders are more inclined to loan out their assets at an agreed interest rate instead of selling them. This is a winning strategy as long as the market is on the rise, which was the case recently.For borrowers, loans work as a hedge against sudden price drops like short squeezes. If their collateralization ratio is at 200%, the loan turns into an effective stop-loss order at 50% of the price of the provided collateral should it plunge dramatically, no matter how much below that mark. In the worst-case scenario, they can only lose their collateral and still have the borrowed cryptocurrency on hand, without suffering the negative consequences and ramifications like bad credit histories if they were to borrow from a commercial bank. Then rinse, repeat.This space is mostly taken by three major players, which is Aave , already mentioned MakerDAO , and Compound , with dozens of smaller players. In terms of DeFi, they all leverage the same smart contract tech applied through decentralized applications (dApps) that offer market participants dynamic interest rates based on supply and demand. Aave boasts most advanced lending services which include uncollateralized loans aka flash loans, immensely popular among arbitrageurs, along with an impressive list of possible collateral types. DeFi in other domains DeFi is making inroads into very diverse fields of application, and it is hard to keep track of all the dimensions along which it rapidly evolves, let alone being able to tell what avenues it is going to take in the future. In this part, we will briefly outline other uses which are worthy of mention. These include cryptocurrency staking, ecommerce marketplaces, insurance services, blockchain oracles.Cryptocurrency staking is as old as PoS cryptocurrencies are, where it is used for transaction confirmation similar to mining in Bitcoin. DeFi breathed new life into this space in the form of staking pools that set up cryptocurrency staking on your behalf, freeing you from the hassle of running the nodes yourself. There are many pools available for staking your coins offered by Staking-as-a-Service providers, but you should probably stick with Staked if you want the staking to be done in a non-custodial, DeFi way, that is to say, your way.With Amazon and its likes around the world stubbornly refusing to accept cryptocurrencies as a legit means of payment, DeFi also brought forth the idea of decentralized ecommerce marketplaces, and it didn’t take long to materialize as peer-to-peer platforms like OpenBazaar , district0x , and Particl . The latter is particularly noteworthy as it features its own privacy-oriented cryptocurrency, PART, and decentralized escrow in the form of the so-called MAD contracts, which fully deserve their name standing for Mutually Assured Destruction . In the first part, we referenced insurance as an example of a service that can be decentralized. Believe it or not, someone has already done just that, namely Nexus Mutual , a blockchain-based alternative to insurance built on risk-sharing pools. Right now it only provides cover against the theft of funds from smart contracts, for example, due to hacks, but in the future it hopes to come up with more mainstream products.In the end, we should also mention a unique decentralized service that has no parallel in traditional finance. Smart contracts that the entirety of DeFi is built around called for the rise and advance of blockchain oracles – services that bridge together off-chain data sources and on-chain smart contracts. Dedicated blockchain platforms like Chainlink  and Provable which offer such services can thus be rightfully considered part of the DeFi world. The DeFi problem The truth about DeFi is that it actually lives up to its promise of a decentralized, trustless environment free from scores of intermediaries and levels of authority. Put shortly, decentralized application is your intermediary and smart contract is your authority. However, this environment has its downside too, which is in fact the evil twin of its upside. Lack of centralized governance to set apart the good and the bad makes this space a rich feeding ground for all kinds of fraudsters. In a sense, it is a Wild West where everyone is for himself, without trade-offs or compromises. In practice, it may mean losing money, so at all times everyone should do their own research before stepping into these deep waters. To sum it up, DeFi is far from being as simple as it might look to you after reading the piece.
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What Is DeFi: Decentralized Finance Explained 

What Is DeFi: Decentralized Finance Explained 

June Katz 6 min read
With the increasing interest in stablecoins offered by platforms like MakerDAO and Ampleforth , recently followed by the explosive growth in popularity of such lending services as Aave and Compound, to name a few, decentralized finance, or simply DeFi, stole the show and got into the limelight of the cryptocurrency arena in the last few months.However, the idea of DeFi is not altogether new as it had been lurking in the shadows of crypto space for quite some time. How it snatched the spotlight, what makes it tick, and why it is possible in the first place are the topics that may be of interest to our readers. So let’s look deeper into it and see what precious pearls are hidden beneath. Decentralized finance, explained  As the name suggests, decentralized finance refers to financial services offered and delivered in a decentralized, trustless way. This is the key value proposition of the entire DeFi space, inheriting it from the blockchain tech on which it is based. On the other hand, what particular financial services are rendered this way is not very relevant to the point in question as they can be any, the more the merrier. The traditional financial industry is made up of and encompasses a wide range ofinstitutions such as commercial banks and insurance companies, investment and hedge funds, money markets and stock exchanges, etc. Ultimately, they all act as intermediaries, that is to say, third parties standing between you and someone like you at the other end of the bargain. In fact, it is hard to come up with a service that couldn’t be administered and delivered directly.To be sure, when you need a loan, a bank can give you one. On the other hand, you yourself can give a loan to the bank in the form of money in your savings account opened there. However, you can loan money to other people as well as borrow from them on your own, without a bank between you and your lender or borrower. Banks just make it more convenient overall by craftily hiding the minutiae and technicalities from you.DeFi does essentially the same but removes the bank from the process altogether. This is a big deal because you no longer have to trust the third party, in this case, the bank, and a fundamental difference between traditional and decentralized finance. In a nutshell, DeFi seeks to offer conventional financial services in a trustless way by removing intermediaries and central authorities, which also happen to be single points of failure. The term bankruptcy should tell you something. How is DeFi possible in the first place?  Financial services, whether traditional or decentralized, deal with money based on some logic triggered by the outcome of external events. To illustrate this, let’s take the following situation. You are a happy homeowner (good for you) and want to cover theft and break-ins should they occur. You buy an insurance policy and pay some monies called an insurance premium. If things turn from good to bad and your house gets robbed, you contact your agent and the damages incurred will be, well, may be reimbursed by your insurance provider.There are three key elements to this business that we must examine for understanding how a very ordinary and common financial service can be organized as a DeFi one. The first element is indeed money which gets moved around. There is some logic, or rules, in all of this, and it is the second element describing a specific service, in our case, home insurance. And then there are external events or triggers that set the entire scheme in motion. Those would be the homeowner applying for insurance and then him filing a claim in case of burglary. So how can such a service be decentralized? If you haven’t figured it out yet, we need to decentralize the components we have just identified. Decentralized money? We already have it, actually, all manners. Business logic? That's what smart contracts are for. Things get a little tricky with reliable and authentic reports of the external events that would activate the smart contract execution and its fulfilment. But we have that covered too as this is what blockchain oracles have been specifically designed for. And the utmost irony is that we can now take the insurance company, the “third party”, out of the insurance business without losing its core function. We will look into concrete implementations of decentralizing insurance in the second part of this exposition but for now, let’s check what other fields DeFi has proved to be a huge success in. What fields does the DeFi space currently embrace? Historically, decentralized exchanges (DEX) were the first use case of decentralized finance even before the term itself, DeFi, has been coined. The story of DEXes started off with BitShares in summer 2014 and has been unfolding ever since. On-chain exchanges allow you to trade crypto assets in a decentralized way without losing the ownership of the private keys to your coins, with trades being executed on-chain, as was the case with BitShares or is the case with modern general-purpose blockchains that support smart contracts. However, there is still a lot of debate going on regarding how truly decentralized these exchanges are. In many cases, to make such an exchange actually usable, trades are still conducted on third-party servers, mostly the servers of the exchange. Aside from that, the exchange developers typically retain control over the blockchain used as a trade vehicle. And we are not talking about the exchanges that only claim to be decentralized while in reality being a far cry from the main ethos of DEX, that of users maintaining the ownership of their keys. Cryptocurrencies are often accused of extreme volatility, and for a good reason, even though for short-term traders regular and powerful price swings are a godsend. So the need for keeping the dollar value of cryptocurrency capital without cashing out called for a financial product that would do the job, and that pushed the effort toward creating stablecoins. Basically, there are two varieties of stablecoins, centralized ones such as Tether or TrueUsd, on the one hand, and decentralized ones like DAI, on the other. Decentralized stablecoins maintain their peg to an asset, say, the US dollar, not directly, but via another cryptocurrency used as collateral. It works because there is always a push toward parity either from above, by creating and selling more stablecoins at a premium, or from below, by buying and liquidating them at a discount. If a given unit of the stablecoin becomes undercollateralized, it is liquidated via the smart contract governing it, and the price gets pushed back to parity again. This is a textbook example of the smart contract tech at work.While decentralized exchanges and stablecoins are tremendously important on their own, DeFI came to prominence thanks to the application of smart contracts in another field, namely lending and borrowing. The truth is, the term DeFi was first referring to this use alone and only later got extended to other fields. Decentralized cryptocurrency borrowing and lending are easily the most widespread and capital-intensive uses in the entire DeFI space today.But we wouldn’t be telling the whole truth if DeFI was just about the three use cases described above. It is a very active field with numerous dimensions along which its development goes. As we have already mentioned in the preceding section, DeFi can be used in insurance. Besides that, it is now used for staking and alternative savings, prediction markets, and even in such a surprising field of application as decentralized courts, among others. To be continued This was the first part of our two-part exposition about decentralized finance. In this part we briefly discussed what DeFi is, how it works, and where it can be used. In the second part we will dive extra deep into specific products now available on the market, expanding our knowledge of this incredibly fascinating subject with more concrete examples. Don’t miss it!
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How to Find the Best Crypto Rates?

How to Find the Best Crypto Rates?

June Katz 3 min read
Looking for the best crypto rates? The number of exchange platforms scattered around the net is on a steady rise. With the crypto market constantly fluctuating and the exchanges offering endless new perks and bonuses (while still trying to get their share of every transaction), figuring out how to get the best deal is pretty hard both for novice users and seasoned professionals.Not all exchanges are made equal: some are better than others in terms of privacy, trustworthiness, rates, and consistency. But even then, you can never be sure that you’re getting great deals for all the coins you’re looking to trade. Figuring this out on your own requires passing numerous Know Your Customer (KYC) procedures, going through identity verification, and setting up various in-exchange wallets.Working your way through shady websites and convoluted registration processes time and time again while still having to switch platforms to get the most out of every pair can leave you frustrated and looking for an easier solution. Is there a way to always get the best rates with prices changing all the time? Crypto rates are notoriously volatile, meaning that the prices for the same tokens will fluctuate between one exchange platform to the next. There’s a great option for those who don’t want to engage with countless different exchanges to find the best price. Cryptocurrency exchange aggregators (or “marketplaces”) provide comparable listings for both crypto-to-crypto purchases and fiat-to-crypto exchanges. Users can compare real-time rates to find the cheapest platform to buy Bitcoin, Ethereum, Monero, and other major cryptocurrencies.The hands-on approach proves to be incredibly useful for both new and experienced traders: the aggregator acts as a gateway to many tried and true exchanges while providing a fixed rate for a limited amount of time. This allows users to compare and contrast competing exchanges while figuring out the rate that makes the most sense for them. SwapSpace provides the best instant cryptocurrency exchange deals SwapSpace is an exchange marketplace that lists more than 300 coins with over 50 thousand exchange pairs for users to browse and choose from. Traders can choose a coin pairing and compare the available offers based on the current network transaction rates and purchase prices. This model eliminates the need for using multiple accounts across various exchange platforms and switching between websites or apps in search of a better deal. Holders of SwapSpace accounts have access to all of our partnering exchanges. Additionally, the service allows users to transfer crypto to their own wallets for safekeeping without storing any assets within the exchange, which offers an extra layer of protection against the hacks and leaks that many other exchanges suffer from.Being an aggregator of online exchanges, the platform can provide users that wish to stay anonymous with access to exchanges that skip user information gathering and KYC procedures, that strip away the element of privacy favored by most crypto traders. Get the best Bitcoin rates and great deals on altcoins Our goal is simple: to streamline and enhance the process of exchanging crypto. No more browsing through countless websites or logging into shady marketplaces – we have the best rates all in one place. Can’t wait to get started? Here’s how easy it is to get the best rates on any coins you can think of: Select the coins you need to trade — no registration required. Choose your pair from over 300 coins and tokens by selecting them from drop-down menus. Specify the amounts you want to swap. Compare features to find your best rate. Compare cryptocurrency exchanges and brokers based on their rates, payment methods, and privacy features to find the one that suits you best. Initiate the transaction. Send your crypto to the provided address and get the equivalent dropped directly into your wallet. Reach out to SwapSpace support for any help or information. Our team of crypto professionals will help you navigate the website, find the perfect wallet for your tokens, and explain the ins and outs of swapping crypto.
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What Are Altcoins?

What Are Altcoins?

June Katz 4 min read
The term “altcoin” is a combination of two words — “alternative” and “coin”. Altcoins were created to overcome all the technical limitations that Bitcoin has. Each cryptocurrency modification release was an attempt to provide users with a more convenient digital currency with a lower coin price. And today there are thousands of altcoins all over the world. Thus, “altcoin” is the name of all currencies except for Bitcoin. What altcoins are, what they are needed for, and how to create your own altcoin is considered in detail below. Altcoins vs Bitcoin Many altcoins are built on the basic structure provided by the Bitcoin blockchain and are its forks. Thus, most altcoins are peer-to-peer, include the mining process, and offer efficient and cheap ways to conduct transactions over the Internet. The issue of altcoins was due to solving the inconvenience of using Bitcoin.  Bitcoin disadvantages: Low-speed Bitcoin transactions. For altcoins, other algorithms are used to speed up transaction time. Cryptocurrencies with a smaller volume of blocks carry out operations faster. Lack of anonymity. Although the crypto transactions are considered encrypted, it’s still possible to track the sender or the receiver of data. To avoid the information leak, some altcoins use additional encryption methods. Difficult and expensive mining. The constant complication of Bitcoin mining requires more and more resources to create new blocks in the blockchain. Altcoins offer alternative mining protocols that allow users to mine crypto without special equipment.  Lack of functionality. The main task of Bitcoin is to be a tool for settlement operations. Altcoins have additional functionality, for example, the creation of smart contracts (tokens), etc. Each new project is the introduction of a technological innovation that can solve specific problems.So, the goal of altcoin developers is to update the code and remove the technical limitations of a cryptocurrency, as well as create new options for electronic payments and adapt it for a particular field of activity.  The first altcoin in history  The first altcoin was NMC (Namecoin). It was released in 2011 as a digital monetary unit, but the original intention of the developer was to create decentralized domain names. Such a structure can be used in creating various completely independent online resources. The firstborn one continues to exist, although it is not included in the top rates of cryptocurrencies now.  Top altcoins ever issued Current leading examples of altcoins include Litecoin, Ethereum (the second to Bitcoin in market capitalization), Dash, Monero, Ripple, and other currencies. Each cryptocurrency is an internal coin of a project based on blockchain technology. The essence of the project is limited solely by the imagination of the developers. Among the projects already created, there is the coin of the agronomic company Kolion (KLN), the coin dedicated to the dental industry (Dentacoin), the coin of the cannabis industry (Potcoin), etc. Nowadays, there are more than two thousand altcoins in the crypto market.The most popular and relevant altcoins for investment are the following: Litecoin . Introduced shortly after Namecoin, Litecoin was named as the silver to Bitcoin's gold. It is considered to be the closest competitor to Bitcoin. While fundamentally similar in code and functionality to Bitcoin, Litecoin differs from Bitcoin in several essential ways. Monero . Cryptocurrency with an additional level of encryption. It is the most popular means of payment on the Darknet, and that’s why XMR is often criticized and was even accused of servicing crime. Dash . Another altcoin aimed at anonymity. It was launched in January 2014. Ripple . A platform for payment systems focused on operations with currency exchange. The Ripple protocol, developed by the company of the same name in 2012, is popular in the banking sector.  And there are other currencies, the top list is constantly changing on CMC (Coin Market Cap). Is it possible to create your own cryptocurrency? Creating your cryptocurrency is available to any advanced computer user. To develop a cryptocurrency on your own, you do not even need knowledge in programming and it will be enough just to edit the program code of an existing cryptocurrency. Of course, such a coin has little chance of getting to the top. The creation of a good one will require knowledge in cryptography and software development. There are two ways to create a cryptocurrency – to make a fork of a well-known project or create a token for Initial Coin Offering (ICO).Using platforms like Ethereum requires only minimal expenses and it is well suited for beginners who want to try the implementation of a new coin. Creating decentralized digital currency is not as difficult as it might seem at first. There are already many ways on the Internet that allow you to do this with minimal investment and do not require special technical knowledge. Of course, cryptocurrencies created in such a way couldn’t become major players on the market, but it can be used in small communities or projects that require an internal settlement system. Conclusion This article should help cryptocurrency enthusiasts to figure out what altcoin is, what its difference with Bitcoin is, and how to create a new currency or a token. Even though Bitcoin is the first one and still considered the most popular cryptocurrency, many altcoins should not be underestimated, cause they have more advantages than Bitcoin in particular cases. Altcoins can be a good investment as well. Also, we remind you that you can exchange 300+ altcoins on SwapSpace .
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