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CBDC vs Cryptocurrency: Are CBDCs a Threat to Crypto?

CBDC vs Cryptocurrency: Are CBDCs a Threat to Crypto?

June Katz 6 min read
The growth of the cryptocurrency market fuels the interest of society and business in the industry and does not allow states to stay on the sidelines. Dozens of countries are developing their digital currencies, and some of them will be launched as early as 2022. In this article, we will help you understand what digital currencies issued by the state are and how their appearance will affect citizens. What is CBDC The CBDC, or central bank digital currency, is a government-issued and government-backed digital analog of fiat money. CBDCs are created using blockchain technology, just like other cryptocurrencies. However, the digital assets of the Central Bank are not the usual cryptocurrency due to the centralized nature of the issue. The CBDC exchange rate is stable and equal to the exchange rate of the state currency in a ratio of 1:1. This is the principle of a stablecoin — a digital analog of the state currency, whose rate is tied to it and secured by it. For example, USDC or USDT are stablecoins tied to the value of USD. The main difference between those coins and CBDC is that the central bank of the country acts as the CBDC’s issuing center, and not a private company or a community of people. Two Ways of Financial Evolution The emergence of CBDC is designed to change the banking systems of all countries and strengthen the role of central banks. There are two points of view on what these changes will be. Supporters of state regulation of crypto believe that all crypto assets, except for the digital currency of the state, should be banned. This is the way that China's central bank cryptocurrency goes. Operations with CBDC will be transparent and will make it possible to track the history of each transaction and each participant in the chain . Banks will only have to work with companies and citizens: to serve customers and improve their products and services. The burden on financial monitoring will disappear. In a sense, the banks even want it. The second option for CBDC development is recognition and regulation. In this model, digital coins and crypto will be equated to shares, considered a digital value or a payment asset. In this case, the cryptocurrency market will develop systematically, and CBDC will be a full participant in the crypto world. This is Singapore's way. How CBDC Works From the point of view of the approach to the issue, the Bank for International Settlements identifies two basic concepts of digital currencies of central banks (combinations are possible): Account-­based (balanced): according to this concept, the creation of a Central securities exchange takes place by opening personalized accounts in the central bank for all economic agents. The features of this concept are the growth of the regulator's costs for maintaining accounts and the risks of disintermediation (reducing the role) of traditional financial intermediaries. Indeed, for commercial banks, the consequences of the emergence of such a retail CBDC can be revolutionary. For example, if individuals and legal entities have the opportunity to receive and store funds in accounts with the central bank, this may provoke a massive outflow of funds from commercial banks. Some European commercial banks are already raising the question of how, in such a system, the central bank will provide funds to banks for lending to the economy. Value token-based concept assumes a digital cash issue (token) distributed through commercial banks, replacing cash. In this case, the central bank relieves itself of a significant part of the costs and risks associated with checking and servicing customers, providing them with additional services, as well as creating and operating technologies. Tokens in such an ecosystem will effectively represent digital versions of cash. However, commercial banks fear that the launch of such digital money may simplify the entry into the financial sphere for large technology companies, which will increase competition in an already low-margin and competitive market, further reducing the industry's revenues. The form in which the Central Securities Exchange will be launched in a particular country can vary greatly from state to state, depending on the specific tasks assigned to the regulator.  When and Where Will the First CBDC Appear If you do not take into account the Sand Dollar issued by the central bank of the Bahamas, no major country in the world has yet reached the stage of launching its own CBDC. As of November 2021, more than 50 countries of the world were developing CBDC. China has come closest to real use, where the digital yuan has been tested for about a year. South Korea, Canada, France, the United Arab Emirates, South Africa, Nigeria, Ghana, and Uruguay are at the pilot testing stage. There is another approach to using crypto as the official currency of the state. This is an example of El Salvador, which in September 2021 recognized bitcoin as a means of payment on a par with the US dollar. Why Do States Need CBDC? One of the main tasks of the Central Bank's digital currencies is the security and transparency of financial transactions. Firstly, the technology underlying CBDC is the most modern means of controlling cash flows. Secondly, central banks strive not to be late for the trend and monitor each other. It is impossible to ignore the development of cryptocurrencies, therefore, to avoid a new round of money flowing into the gray zone, the state needs its digital currency. As they say, if you can't stop them — lead them. For many years, some states have been struggling with the outflow of money to offshore and other jurisdictions that are more favorable from the point of view of taxes and doing business. Previously, this happened with cash, then with non-cash, and now the process has almost entirely switched to cryptocurrencies. There is a threat that people and companies that create stablecoins will control too many processes and resources and will become stronger than some states. Therefore, CBDC for states is also a tool to combat gray financial flows. Are We Moving to Digital Currency? Most likely, a link between CBDC, stablecoins, and crypto will exist and their exchange for cash will be possible for quite a long time. But it is possible that in some countries, cash and digital values, except for their own CBDC, will remain in the gray zone and will be banned. For example, in China. Criticism Writer Dominic Frisby, author of the book "Bitcoin: the Future of Money?", believes that the main disadvantage of CBDC is its programmable capabilities. While fiat currency presupposes certain freedom, digital currency completely excludes it. Governments will also have direct access to users' wallets, which will make it easy to collect taxes or fines — you just need to change a couple of lines of code to do this. The programmable functions of money can be used against certain undesirable persons or as a weapon in an economic war. Integration with social rating systems opens up even wider opportunities for punishments or rewards. Your bank knows almost everything about your spending model, knows where you live, who you work for, and which store you prefer to buy groceries at on Mondays. He is well aware of your financial situation and state of health. Knows what devices you use, and in some cases even has biometric data. All this information opens up great opportunities for analysis, including behavioral analysis. However, information about consumers is of interest not only to the private sector but also to the state. Moreover, central banks are among the first to queue for user data. In the current realities, the introduction of national digital currencies by several countries is a matter of "when", not "if". As with fiat currencies, their strength will be determined by the strength and influence of the central banks behind the issue. A former employee of the NSA and the CIA, Edward Snowden, considers the tool "the newest danger hanging over society."  In a world where CBDCs are a priority means of settlement, including cross-border ones, there will be no room for privacy. After all, a tool that is positioned as a way to increase financial inclusion, in the end, can only tighten the noose around the neck of economic freedom.
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Why Crypto Market Is Down Today: Global Reasons

Why Crypto Market Is Down Today: Global Reasons

June Katz 6 min read
The bitcoin exchange rate has experienced a lot of falls in recent years, but in the end, it has recovered every time and reached new heights. In the last six months, almost all cryptocurrencies have significantly dropped in price. At the end of last month, after a prolonged fall, the first cryptocurrency began to show some positive dynamics, gaining a foothold at $ 32 thousand. Against the background of the rising inflation rate in the United States (almost 9% per year), bitcoin rapidly flew down and reached $ 27 thousand. Then analysts said that with an increase in inflation, the BTC rate would inevitably fall. On Monday, June 13, the bitcoin exchange rate fell to a price of $ 25 thousand, and on June 19, bitcoin collapsed to $18,707 (according to the Binance exchange). The first cryptocurrency pulled other coins along with it. Ethereum has fallen in price and now costs about $ 1.1 thousand, Solana has lost as much as 18.2% in a week, and the exchange rate has dropped to $ 37 (at the time of 06/21/12) Reasons The collapse of the cryptocurrency market will not surprise anyone. Even though the cost of bitcoin and Ethereum has increased dramatically over the past decade, fluctuations in this market have become familiar. Among the reasons for the fall of the cryptocurrency, experts name three — of which Bloomberg considers inflation statistics in the United States to be the main reason: in June, the US Federal Bureau of Statistics reported that the main consumer price index (CPI) increased by 8.6%. Inflation excluding food products increased by 6%. This is a record since 1981, and the statistics turned out to be worse than analysts' expectations, which assumed an increase of 8.3% for the CPI and 5.9% for core inflation. The second reason is the tightening of monetary policy in different countries. First of all, the US Federal Reserve, which in May raised the base rate (according to which the Central Bank issues loans to commercial banks) by 50 basis points, to 0.75-1%. This is the strongest increase since 2000. Because of this, people prefer to invest in assets less risky than cryptocurrency. The cryptocurrency market is also affected by the collapse of the TerraUSD (UST) stablecoin and related proceedings, which undermined investors' faith in such projects, Bloomberg writes. After it lost its binding to the US dollar, the Luna cryptocurrency used for its release collapsed by 76.4%. Luna Foundation Guard, which is behind TerraUSD, spent $2.9 billion in bitcoins to protect the binding of the token to the dollar — almost all of its reserves. On June 10, Bloomberg, citing sources, reported that the US Securities and Exchange Commission had launched an investigation into Terraform Labs and its algorithmic stablecoin TerraUSD. The regulator will examine whether the platform violated the rules for protecting its investors. Shares of Crypto Companies Also Fell The negative dynamics of the cryptocurrency affected the shares of industry-related companies on the stock market. In particular, the value of Coinbase Global Inc. paper has dropped by 13% since the beginning of the year, Marathon Digital Holdings Inc. — by 24.4%, and Riot Blockchain Inc. — by 21.7%. After spending "hundreds of millions of dollars" on campaigns, sponsorship agreements, and advertising at the Super Bowl, most cryptocurrency firms have reduced marketing costs. This is reported by The Wall Street Journal.  Binance CEO Changpeng Zhao said that crypto winter is the right time to hire new employees and further develop the business. Activity in the sphere has been reduced by Crypto.com and Gemini Trust. The first, after spending $40 million in January, allocated $2.1 million in May for commercials on the eve of the Super Bowl. The second one spent $478,000 last month — eight times less than in November ($3.8 million). Terra Crash The Terra incident is undoubtedly one of the highest-profile events in the history of the crypto industry. So far, no DeFi project has reached such gigantic proportions before its collapse. In March 2021, Terra launched an application called Anchor, which offered profitable deposits, which forced people to buy Terra to then deposit it into their account and get a 20% profit. This attracted a lot of new investors. The dizzying growth of Terra USD (UST) and the popularity of algorithmic stable coins have been a crypto trend for a long time and inspired many developers to create similar projects and reserve crypto funds. However, everything changed in a matter of days: on Wednesday, May 11, Terra USD lost its peg to the US dollar — its price fell below $ 0.23. The LUNA cryptocurrency used to issue the stablecoin has fallen by more than 80%. Some market experts believe that the Terra incident, regardless of the outcome, will have serious consequences for the cryptocurrency market. Blogger Dennis Porter noted that regulators use the collapse of UST as the main argument in favor of total regulation of stablecoins and promotion of CBDC. US Treasury Secretary Janet Yellen said that the unbinding of Terra USD exposed the need to "create a regulatory framework for stablecoins aimed at minimizing volatility." According to experts, the main reason for the "death" of LUNA was the weakening of the binding of the UST stablecoin to the US dollar. It was TerraUSD (UST), according to the creators of Luna, that was supposed to become a "bridge" between tokens and fiat, but in practice, it turned into a disaster. The path to the rebirth of Terra, if at all possible, will be long and thorny. After all, the main problem lies not in the technical component or the mechanism of binding to fiat, but in restoring user trust. Mutual Influence of Markets Bitcoin is increasingly tied to the world market. And, accordingly, it becomes dependent on its fluctuations. The dynamics of bitcoin this year are almost identical to the fluctuations of the US Nasdaq Composite stock indexes, which are dominated by shares of technology companies. The indicator has dropped by 8.3% since the beginning of the year. Sentiment in traditional markets and cryptocurrency markets can mutually influence their dynamics, analysts at the International Monetary Fund (IMF) say. "A sharp decline in bitcoin prices may increase investors' flight from risk and lead to a reduction in investments in stock markets," experts write. Summary The exchange rate is based not only on promises but also on faith in these promises. The more faith the promisee has, the more stable the course. Recently, more and more analysts are predicting a collapse of Bitcoin almost to zero. According to Guggenheim Partners director Scott Meinerd, bitcoin will fall to $8 thousand, bitcoin critic Peter Schiff admits a rate of $10 thousand, and Galaxy Digital founder Mike Novogratz is confident that the "crypt" will fall further. However, such prophecies in no smaller quantities accompanied every protracted decline in the cryptocurrency market which each time regained its position. Against the background of the fall of cryptocurrencies, the founder of the world's largest crypto exchange Binance Changpeng Zhao has repeatedly said that digital money cannot be evaluated by its falls. He wrote: from a historical point of view, "if you bought bitcoin every time the headlines "bitcoin is dead" appear, you would have succeeded." Zhao backed up this statement with the fact that in 2011 bitcoin fell below $ 20, in 2015 - below $200, and in 2017 — below $ 2000. And in 2022, bitcoin fell below $ 20 thousand. Zhao does not doubt that the leading cryptocurrency will begin to rise in price at auction. But it is worth understanding: when exactly bitcoin or ether will go up, no one can predict now.
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How Big Is the 2022 Crypto Crash? A Historical Perspective

How Big Is the 2022 Crypto Crash? A Historical Perspective

Ruth Kise 5 min read
This year started with a significant decline in the cryptocurrency market, which did intensify because of the geopolitical situation. Since the fall of 2021, crypto has been passing through the bear market and this trend continues to this day. And over the past one and a half to two months the main cryptocurrency has collapsed in price by almost 60%. Are Crypto Market Crashes Really Bitcoin Crashes? The correlation between cryptocurrencies has always existed to various extent. Altcoins depend upon Bitcoin because of the formation of primary demand for digital currency around it. Almost half of all coin investments are in BTC. Large investment portfolios include Bitcoin as a core asset. All large exchanges hold the bulk of liquidity in Bitcoin, as the largest volumes of transactions occur in trading pairs with BTC. Although the dominance index has shown steady growth in altcoins investment since 2017, Bitcoin still holds 40% of the entire market. The closest competitor, Ethereum , is 2 times behind it. Thus, when Bitcoin collapsed from $48.2 thousand to $28.9 thousand, it dragged down all the altсoins. Ether is down 52% since January 2022 and now costs $1,800, Solana is down 74% to $45.87, Cardano is down over 64% and costs $0.4909. If you're a newbie, then you might feel like it's a complete collapse of cryptocurrency. And seemingly with a good reason, because such a sharp and long drop in prices was a long time ago. However, the market has already faced crashes more than once. So we will look at the most important cases of bitcoin drops: The Largest Bitcoin Drops to Date It should be mentioned that any drop in prices is associated with their growth, and vice versa: a kind of swing that leaves no investor indifferent. 1: The Rollercoaster of 2011 The very first shock caused an unexpected rise of Bitcoin from $1 to $30 in early 2011. However, this wave of growth was followed by a staggering drop in the asset price in June 2011. During the period from June 8 to 11, the price of BTC fell by almost 50%, reaching $14.65. Such a sharp jump is explained by the sudden increase in the hashrate to unprecedented values. Also, mentions in some mainstream media played their role. On June 19, 2011, the Mt.Gox exchange was hacked , bringing down the price of Bitcoin to $0.01. It affected the accounts of 60 thousand users totaling more than $8.7 million. One week later, trade on Mt.Gox recovered, and the fall in prices after the hack became the largest in the history of Bitcoin. 2: The New Heights of 2013 The next shattering experience awaited investors for two whole years. In 2013, the volatility of major cryptocurrencies set new records. BTC set a new historical high of $1,147. Against the background of general euphoria among crypto investors, the coin did not stay above $1000 for long - very soon a bear trend began, during which the BTC fell to $694. The next time the cryptocurrency was able to overcome resistance again at the level of a thousand dollars only in January 2017. 3: The Final Misadventure for Mt. Gox In February 2014, the Mt.Gox site was hacked again, this time 744 thousand bitcoins were stolen. It is an absolute record and the biggest hack in the trade to date. As a result of the hack, Mt.Gox filed for bankruptcy and closed, creating panic in the bitcoin market. From that time on, the first prolonged fall of Bitcoin began, which is commonly known as the "cryptocurrency winter." 4: The Time When Even Your Grandma Learned About Crypto The end of 2017 is remembered for euphoria due to the achievement of a new peak in the price of Bitcoin. True, in the same month, the value of the main digital asset began to fall rapidly - a week after the formation of the historical maximum on the line of $20.000, BTC dropped to $13.000. 5: The Comedown of 2018 The fall continued into 2018 and marked a new crypto winter. In January, the coin fell to $9,800. The lack of centralized regulation left the question of safety open. In the first nine months of 2018, $927 million worth of cryptocurrencies was stolen from platforms of different countries, according to a CipherTrace report. Also at the beginning of the year, phishing mobile applications of larger exchanges were distributed, which stole customer data.  Great interest in cryptocurrency and the ICO market has led to the emergence of many scam projects. It all ended with the biggest social networks - Facebook, Instagram, Google, Twitter, Snapchat, Baidu, Weibo - rolling out a ban on any ICO ad, no doubt a blow across the industry. So on the 14th of November, BTC cost $6,359, and already on November 25, the rate was $3,729. 6: The Great Expectations (vs Reality) Another memorable crypto drop took place in late 2019. The main topic in the community was legal issues, the struggle of the US Securities and Exchange Commission (SEC) with bitcoin-ETF, and hopes for the launch of the institutional bitcoin service Bakkt.  In September, Bakkt finally launched but did not attract much attention among institutional investors, triggering a drop from $10,036 to $6,657 in just a couple of months. To Sum Up High inflation in the US stock market and general global economic instability were naturally reflected in a decrease in risk interest among investors. In addition to the situational panic against the background of the fall of UST, the tightening of the monetary policy of the FRS and the end of the "bull" trend in the technology sector, which includes cryptocurrencies - the main current reasons for the fall of the market. The current market crash is not the largest in history, although due to large capitalization, absolute numbers are really large. The price of Bitcoin has been able to increase by several hundred to 60 thousand dollars, so you should not worry about short-term calendar cancellations.  On the other hand, there are some coins that have less correlation to BTC and it could be a fine new trend. For example, BNB with a well-built all-in-one ecosystem and Launchpad. BNB began to actively master one of the largest markets - the American one. As a result, the position of the currency will only strengthen, which makes it extremely promising for investment.  Clearly, the cryptocurrency will deal with all fluctuations - both minor changes during the day and severe monthly collapses.
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Investing in Crypto: Things to Do in a Crypto Winter

Investing in Crypto: Things to Do in a Crypto Winter

June Katz 13 min read
The first crypto winter was registered in 2014-2015 and lasted 427 days. At that time, the bitcoin exchange rate decreased by 87%, which negatively affected altcoin quotes. The situation was repeated in 2017-2018, when the growth of the bitcoin exchange rate, which began in the fall, was replaced by a sharp decline — from 20 thousand dollars per coin to 8 thousand, or even less. For several months now, experts have been speculating about the possible onset of crypto winter. New assumptions appeared almost every week, and the deadlines were constantly pushed back. It looks like it happened after all. However, the market is cyclical — a period of growth is always followed by a fall and vice versa. Any downturn creates enrichment opportunities, so in this article, we will look at the topic of investing in cryptocurrency. I will point out that we are not giving financial advice — we’re just collecting information about the main investment strategies, the main market participants, and patterns that may be useful. Crypto Investment Strategies There are different approaches to making money on investments in digital assets. We offer you to get acquainted with the three most popular strategies. Hodl Hodl is a popular term in the crypto community, which network users employ to denote the purchase of cryptocurrency for its long–term retention. Working under this scheme implies earning on the growth of the asset rate for a long time. For example, investors who purchased 1 bitcoin 6 years ago, as of the time of writing, were able to increase their investments by 17547%. Scalping The term scalping usually means income from short-term changes in the exchange rate of an asset. Most often, the influence of news on the digital asset market is used to make money using the scheme. Here's how it can work: An investor saw that a couple of minutes ago, Tesla published a report stating that the organization invested a large amount in bitcoin. It can be assumed that the news will positively affect the behavior of the cryptocurrency exchange rate. To make money on the market reaction, the investor buys bitcoin. At the moment when the cryptocurrency exchange rate starts to rise, the investor gets the opportunity to sell the asset at a higher price. The difference in the cost of buying and selling will become his profit. Also, for scalping, you can use technical analysis of the behavior of the asset rate according to the schedule. Averaging The essence of the strategy is to purchase an asset for an extended time on a certain day of the week/month (or with other frequency), regardless of the current position of the cryptocurrency. Market participants who choose this strategy believe that this approach allows them to earn money by averaging risks. Staking This term refers to the intentional retention of assets in the account, to organize a source of passive income. In the staking market, you can find offers with high profitability. One of them is available on the ROY Club platform. Within the walls of the site, up to 40% of new coins can be generated monthly on the UMI cryptocurrency staking. At the same time, you can start earning in a few minutes after registering in the system. All the steps that you need to go through to start earning are accompanied by detailed instructions. If necessary, the user will be able to get advice on working in a dialog box on the site. How to Increase the Efficiency of Investments in Cryptocurrency Many investors have their secrets to improving the efficiency of investments in cryptocurrency. Among them, there are several universal tips. Here are some of them: Investments should be diversified. A distributed portfolio of assets reduces the likelihood of losing all investments due to a sudden drop in the exchange rate of one cryptocurrency. There is no need to buy digital assets with the last money. The market can be unpredictable. It is worth investing only what you can afford to lose. Investments need to be planned. It is worth determining in advance how much you are willing to invest in cryptocurrency. Also, experienced market participants are advised to keep records and record all their operations in the market, so that, if necessary, they have information at hand to analyze the effectiveness of solutions. There are different investment strategies for users who want to make money on the movement of the cryptocurrency exchange rate. For those who are not in a hurry, the hodl scheme is suitable. Users who are ready for increased risk for the sake of instant earnings should pay attention to scalping. Those who want to combine the high profitability of different strategies with the security of investments may be interested in staking. Ways to Analyze Digital Assets Technical Analysis Technical analysis is based on historical market data because history develops in a circle and repeats itself. It includes an overview of past pricing trends. Technical analysis aims to identify recurring patterns and make calculated forecasts for the growth or decline of trends. The main assumption here is that prices are not random and they can be foreseen if you look into the past. Although technical analysis performed correctly can be quite useful and effective, it does not always work. In most cases, the success of technical analytics depends on the person conducting the research. That's why some people prefer fundamental analysis of crypto. Fundamental Analysis Fundamental analysis aims to cover a somewhat broader picture compared to technical analysis. It takes into account both qualitative and quantitative factors that can affect the value to understand whether an asset is overvalued or undervalued compared to its current market price. Since there are no public financial statements that can be verified on the cryptocurrency market, it is more difficult to do this type of analysis, especially for beginners. It is necessary to take into account the volume of transactions, user activity, the unique functions of the cryptocurrency, and even some global economic events that can significantly affect the cryptocurrency market. It is better for a beginner to learn how to use both methods. Understanding cryptocurrency fundamentals will help you make smarter decisions, plan your strategy both in the short and long term, and ultimately become a better investor. Choosing the Best Crypto to Invest In Polygon ( MATIC ) This is a level 2 cryptocurrency for Ethereum decentralized application platforms. Polygon is a promising blockchain ecosystem designed to develop infrastructure and help scale the Ethereum network. The Matic Network and the Polygon token also offered a second-level solution — transferring transactions directly on the Ethereum network to another coin platform. This allowed the Matic network to reach a speed of 7,200 transactions per second (TPS). For comparison, the throughput of Ethereum does not exceed 15 transactions per second. In 2021, the network was rebranded — it became known as Polygon. But in addition to the new name, it also has new functions. Now it is a platform for creating interconnected blockchain networks. In other words, with the help of Polygon, everyone can write their blockchain for any purpose. In the future, Polygon will become the basis of web3 networks. Loopring (LRC) A promising cryptocurrency of the decentralized exchange of the same name. To make DEX more scalable and reduce the commission, ZK accumulative packages are used. Loopring gives DEX the ability to choose between storing transactions on-chain or off-chain at any given time. This on-chain data availability (OCDA) combined with ring miners and order rings provides greater scalability of DEX. Loopring offline storage provides 16,400 transactions per second (TPS). Chainlink (LINK) It is the digital currency of the decentralized Oracle programming network. The goal of Chainlink is to solve the problem of securely connecting smart contracts to real events. Smart contracts are code fragments that embody a given business logic (for example, when to pay interest on loans). Ripple ( XRP ) This promising cryptocurrency project from San Francisco has become a truly global crypto intermediary (bridge currency) used in cross-border settlements. We are talking about multibillion-dollar transactions mainly between financial institutions, corporations, banks, and payment systems of all countries of the world ("payment corridors"). The second advantage of XRP is the phenomenal speed of financial transactions conducted in the Ripple ecosystem. It is more than 10 thousand operations per second (in particular, in Ripple Net the hash rate is at least 50,000 TPS). Cardano (ADA) It is a fully decentralized platform operating on the principle of open source. The distinctive features of Cardano are complete anonymity, the absence of restrictions, and other complicating circumstances such as KYC . It was created in 2017 and became one of the first ecosystems operating on the PoS (Proof-of-stake - "proof of ownership") network protocol. It is actively used in the architectonics of smart contracts and Dapps. The recommended investment horizon is from one year. Stellar (XLM) This is a promising cryptocurrency that is used in various systems — from gaming platforms to online stores. It was created in 2014. The main feature is the unification of various ecosystems and blockchains. Stellar is a universal medium of exchange with minimal fees for financial transactions. The cooperation of the platform with IBM and MoneyGram International. Criteria for Selecting Promising Blockchain Projects In 2009, Bitcoin was the only cryptocurrency on the market. Today, the number of digital tokens has exceeded 1000. In such an assortment, it is easy to get lost even for experienced investors, not to mention beginners. When choosing the optimal cryptocurrency for long-term investment or earning on exchange rate fluctuations, we were guided by the following criteria: The fame of the project and its reputation; Capitalization size; The number of exchanges on which the selected cryptocurrency is traded; The number of coins in circulation; The volatility of the exchange rate and the dynamics of quotations; Technical data of the network; Social activity. Cryptocurrencies that are actively discussed on forums and in chat rooms have more prospects for growth. Conclusions It is quite possible to be friends with the risks that the volatility of digital assets carries. By carefully monitoring and analyzing all small price movements, experienced traders have learned to extract income from them by buying and selling coins at the right moment. Such a flair comes with practice, but at the same time, it is backed up by knowledge — studying trading tools, helps not only not to go into negative territory, but also to make a profit. Is crypto a good investment? The cryptocurrency market is volatile and unpredictable, and many experts do not recommend it for long-term investment. But bitcoin has been around for more than 10 years — and this is much longer than the same experts predicted. And although we are seeing periodic ups and downs, in the long term, the crypto market is still expected to grow consistently.
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Ethereum Gas Fees: How to Make Sense of Them

Ethereum Gas Fees: How to Make Sense of Them

June Katz 5 min read
Just as bank customers pay a commission for the transfer, so do cryptocurrency users. And if in the case of, for example, Bitcoin , the commission amount is transparent and manageable by users, then Ethereum gas fees for the transfer are calculated in a more complicated way. The reason for this difference in the principle of collecting fees is that Bitcoin was created to conduct transactions between users. Ethereum was created not as a payment system, but as a tool for developing decentralized applications. The main function of Ethereum is different - maintaining the operation of smart contracts which is used not only inside the Ethereum network but also in the DeFi ecosystem. The Ethereum blockchain has limited bandwidth and is not adapted for conducting financial transactions, which is why any complex structures overheat it. Any major interference in the work of Ethereum will raise commissions, whether it is the work of smart contracts or the purchase of assets.  The growth in the number of users of the DeFi market has increased the complexity of the Ethereum system, which has led to an increase in commissions within the network and made them less predictable. How do transactions work on the Ethereum network? When sending a transaction in the Ethereum blockchain, a fee is charged in the form of "Gas", but what happens if you specify an insufficient amount? There are three scenarios for working with Gas. First: there was more gas than it took for the transfer. Then, all unspent gas will return to the sender at the rate at the time of dispatch. Second: there was exactly as much gas as needed. Then the payment will go through without any problems, nothing will be returned to the account. Third: there was not enough gas. Then the transaction is considered unconfirmed and canceled. Immediately after the cancellation, the Ethereum Blockchain will roll itself back to the state before sending, and the spent gas is not returned. Note that the blockchain cancels only changes made by an unconfirmed transaction. What is Ethereum Gas? Gas is a unit of measurement of computing work performed by miners to conduct transactions or support smart contracts of the Ethereum network. Gases were also introduced to stimulate miners: in the case of blockchain networks, the security of the network is directly proportional to its hash rate, that is, the number of miners. This system allows them to receive a commission commensurate with their resource costs, because the more complex the transaction, the more gas is required to complete it. The term gas can mean two things: gas limit and gas price.  Gas price The price of gas can be set by two authorities, depending on who you are dealing with. The first is the Ethereum blockchain itself, which sets the cost of fuel depending on its load. The higher the load, the higher the commission. The second is a smart contract created by a participant of the blockchain that you are paying for. When creating a smart contract, for example, to raise funds for an ICO or IPO, the contract creator sets the cost of commissions. The Gas price is measured in the minimum part of the Ethereum network – Wei. However, in almost all wallets, this parameter is shown in Gwei. Below is the fragmentation of ETH: 1 ETH = 1 000 finnely = 1 000 000 szabo = 1 000 000 000 gwei = 1 000 000 000 000 000 000 wei The three main units of measurement WEI, GWEI, Szabo and Finnely are named after famous people who influenced the formation and development of cryptocurrencies. WEI is dust from ETH, in reality, it is practically not used. The main area of use of WEI is writing code. Execution of one line of code in the Ethereum blockchain costs 1 WEI, it can be a smart contract code or any other operation. GWEI is used to pay the commission. Finney is something like a pocket change , equal to 0.001 Ether, intended for small transfers. Ether, aka ETH, is used for everything else. Gas limit The minimum amount for the transaction is 21 thousand units. It is recommended to set a higher Gas limit value to be sure that the transaction is completed successfully. If the amount of Gas is not enough for a successful outcome, the transaction will be returned with the status "unsuccessful". Regardless of what the result was, Gas is paid to the miner, since they have already spent resources on processing this operation. Usually, developers fix the value that is written off for the successful implementation of the smart contract. So, if you need to make a transaction, and you have set a Gas limit of 500 thousand Gas, and only 30 thousand Gas is needed to make a transaction, then only 30 thousand Gas will be written off from you. But if, for example, 500 001 Gas is needed to conduct a transaction, then the program will not give a result, and this amount will be spent. How to avoid high ETH gas fees and calculate the right number of Gwei to pay the commission correctly? Use https://ethgasstation.info — this service specifies Ethereum gas price calculation giving you recommended commission values for the transfer so the transaction will pass.  There is also an alternative from Etherchain - https://www.etherchain.org/tools/gasPriceOracle You can find an Ethereum gas tracker at https://ethstats.net When are Ethereum Gas Fees Lowest? There are also general patterns that you can focus on to know what is the best time for low eth gas fees. Even though Ethereum is a network available around the world 24/7 and 365 days a year, since the launch of EIP—1559 in August 2021, the base fees have generally been higher during business hours in the United States. Interestingly, the morning period from midnight to 8 a.m. Eastern time has a lower base commission compared to working hours in the United States (from 9 a.m. to 5 p.m.). In addition, gas is also cheaper on weekends. The cost of gas is also affected by the intensity of use of Tether , USDC, and NFT , which also increases during working hours in the United States. Regardless of the reason, all of this can provide an interesting opportunity for time-independent transaction planning. How will the launch of the new Ethereum 2.0 network reduce the commission? Now Ethereum is a blockchain based on PoW (Proof-of-work) or the computing power of miners. When switching to PoS (Proof-of-stake), the computational load on the network is expected to decrease. For example, in the Ethereum PoS sidechain, validators will take the role of miners mining cryptocurrency. To become a validator, you will need to freeze 32 ETH on the account. The Ethereum 2.0 system should increase the network bandwidth and should allow for more transactions per second. The point is controversial: if the number and speed of transactions increase, then the cost of Gas may also rise. In any case, to know for sure, you should wait for the transition of the Ether from PoW to PoS.
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How to Buy And Trade Crypto (And Why)

How to Buy And Trade Crypto (And Why)

Ruth Kise 14 min read
The world’s recent events are causing more and more people to think about the safety of their savings. More and more of them choose to invest in cryptocurrency. Here, for example, your wallet belongs to you only, and no one can freeze your assets; on the other hand , the responsibility of the safety and all operations rests only with you. Therefore, you should first understand the following points. What You Need to Know Before Going into Crypto Getting acquainted with the world of cryptocurrencies is better to start with a choice of strategy. Investing or trading are the main ones. The first implies the acquisition of an asset and long storage. The second is short-term speculation. A trader makes many transactions with digital assets, trying to benefit in a short period. Strategy 1: Investments There are a few types of investments in crypto: Buy and hodl You can buy Bitcoin , Ether, or any other coin for fiat and wait for its rate to increase. If handled properly, such an investment will bring a big profit after a certain time. However, no one canceled the negative scenario for cryptocurrencies, and their value can fall sharply, up to a complete depreciation. Besides, such an investment method means investing not even for months, but for several years or more. Put in a trust This way, you invest in a trader who makes transactions on a cryptocurrency exchange and receives your interest. But still, there is a high risk of loss of invested funds because no trader is secure from damages. ICO You can invest in a cryptocurrency company and become its “stockholder”. The disadvantage of this method of crypto investing is the choice of a valid company as well. Strategy 2: Exchange Trading Trading cryptocurrency is an extremely risky craft. The price of altcoins is volatile, on a day it can fluctuate by 10-20%, sometimes by 50% or more. For this reason, it is better to try trading cryptocurrency from a training account first. The largest cryptocurrency exchanges, such as Binance, Coinbase, Huobi, OKEx, and others, allow users to open demo accounts for transactions without making a deposit. This will allow you to get acquainted with the market and the structure of the trading platform, and practice. Then you can deposit a small amount on the exchange. This will help the user understand his psychology: is he able to suffer losses and not make panic, erroneous transactions, control himself and decide with a cold head. In addition, it is necessary to study the theory, listen to lectures on this topic, take courses, and get acquainted with technical and fundamental analysis. All this will help not only to see in the charts the ups and downs of assets but also to predict them. Other Considerations: Fees Transaction fees are an integral part of most blockchain systems. They perform two important functions. They reward miners or validators, who help confirm transactions, and protect the network from spam attacks. Depending on the activity of the network, the transaction fee can be small or high. Its size is also derived from market conditions. Getting Ready to Take Part in the Crypto Market When you are ready with the strategy, ‌choose the best altcoins to buy. Today there are 2290 coins. Some of them are junk, but some can be very advanced. To make the right decision first you must make an analysis of it validity. It is best to start with Coinmarketcap – there is a rating of all cryptocurrencies by capitalization and a lot of useful information. No matter how reliable the crypto is, you can't trust it with 100% of the investment. It is better to distribute money to several tools, so you can reduce the risks of loss. For long-term investments, experts often say that you should choose cryptocurrencies that are in the top 30 at least. They are more stable, traded on many exchanges, and the probability of a sudden scam is minimal. Less popular coins also can be considered for investment. But it is worth understanding that, besides the risks of the fall in rate, there is also a risk of the slip-off. Follow all social media and forums, and monitor its activity: the more useful news on the topic, the better. If you see the developers do nothing, there is no news, then this means that they have lost interest in their project. It's better not to buy such a coin. It is also important to know if there is activity from investors. Also, some coins can operate only on one blockchain, and some you can use on different. So if you are going to trade your funds, ‌keep it in mind and learn about the cross-chain process.   Storing Crypto When you are ready to buy crypto, you must choose the type of its storage. Cryptocurrency wallet – an app, program, or separate device for sending, receiving, or storing electronic money. They are also can be “hot” and “cold”. A hot wallet connects to the internet and could be vulnerable to online attacks, but it’s faster and makes it easier to trade or spend crypto. A cold wallet typically has no online connection, so while it may be more secure, it’s less convenient. Below there are five types, with a brief description of their advantages and disadvantages: Software Wallet (Bitcoin Core, Exodus). These wallets store crypto funds right on your computer. And you usually need quite a lot of space for this. For example, for a minimum installation of Bitcoin Core, you need at least 145 GB on your hard drive - and this is for only one currency; Online Wallet (Blockchain, Wirex). These wallets keep your coins in the cloud. You can use them from any device, even from your phone. But you need to choose the wallet carefully. If someone hacks it, you will lose all. Hardware/ Cold Wallet (Trezor, Ledger). These wallets are separate devices, so they are much more difficult to hack than a regular computer. But you need to carry them constantly, as well as remember the PIN. Mobile Application (MyCelium, Breadwallet). An IOS or Android app that allows you to manage your tools. Convenient, easy, and fast storage, but with low security. In addition, if your phone was lost, the finder will get full access to the wallet. Paper Wallet (WalletGenerator.net, MyEtherWallet.com).  A special site generates private and public keys, that can you can print or record. Also, remember that except for a sheet of paper on which the keys are recorded - they are nowhere else, so the loss is equivalent to the loss of all the money. For investment, cold wallets are better. Thus, you can keep cryptocurrency on a computer or flash drive. Plus - security, no one can steal funds without direct access to it. For trading, the exchanges are the best. Using it, the client can sell or buy crypto and use additional options. Crypto Exchanges When choosing a cryptocurrency exchange, a novice investor needs to focus on some indicators. Such as: Financial turnover of the crypto platform. Large financial turnover shows enough money in the closures of the exchange, meaning that many traders use such a platform. So, such an exchange is high quality and the trader will not have any problems with it. The reputation of crypto exchange. Fees, which are not the same everywhere. For residents of different countries, crypto exchanges can also set geographical limits. The number of trading pairs on the cryptocurrency platform and their market rate. Payment options: find out how and how quickly you can transfer money to a crypto exchange account, and then withdraw it to your account or card. All cryptocurrency exchanges are divided into: Centralized Cryptocurrency Exchanges (CEX): Coinbase, Gemini, Kraken Platforms, where users can trade cryptos and ordinary fiat. They coordinate cryptocurrency, trading on a large scale, using a similar business model to traditional stock exchanges. Centralized exchanges usually offer their customers support, various trading pairs, and gateways for receiving and withdrawing, as well as additional services, for example, stealing, storage capabilities, IEO or DeFi services. Decentralized Cryptocurrency Platforms (DEX): WavesDex, Bancor, Besk, Uniswap Unlike traditional CEX, on such platforms, transactions and trades are automated by using smart contracts and decentralized applications. This type of crypto exchange is much safer since a well-written smart contract will not allow hackers to hack it. There are also aggregators like SwapSpace, where you can look at several offers and choose the crypto exchange that suits you best.  Swapping Crypto If your end goal is not just to put the purchased crypto in a stash, then you can exchange it for another coin. Swapping is a similar process to trading but with more flexibility. You can exchange any cryptocurrency for another even if the pair is not live on-the-spot market. This eliminates paying transaction fees more than once. In most cases, if you’re only swapping a small amount, convenience is the bigger concern here. That said, crypto swapping applies to any level of volume. Buying Crypto with a Credit Card The fastest way to buy crypto is to use a credit card. The process for buying crypto with a credit card is fairly straightforward: Find an exchange that allows credit card transactions. Your first step is signing up for a crypto exchange that allows you to use a credit card. And be ready to pass the KYC . Double-check that your card issuer allows crypto purchases. Enter your payment method. Set up your transaction. Pay off your balance as soon as possible. Pros and Cons of Buying Crypto With a Credit Card Pros Investing without cash on hand. Potentially earning rewards on your investment. Cons Purchases are often treated like cash advances. Higher fees. Your credit score could take a hit. Even more risk. Bottom Line Digital asset trading needs to be taken seriously, calculated every step, and thought about possible negative consequences. The beginner should first decide whether to invest or trade. Then study the theory, take some courses, and practice with test mode. Then choose the cryptocurrency to buy and be ready to lose. There is no game of luck. Don’t neglect crypto education. Crypto trading is hard work. It may take years to understand how the price of assets behaves in a particular situation. Don’t trust anyone and don’t hurry – do your own research before deciding. Choose the proven platforms for transactions and do not fall for fraudsters' ploys.
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Where Is the Crypto World Going: Crypto Censorship Resistance

Where Is the Crypto World Going: Crypto Censorship Resistance

June Katz 2 min read
Financial censorship or cutting off access to the global banking system is one of the most powerful tools that government has to punish their enemies. Whether financial censorship is used for the good cause or not the question is - does a global decentralized monetary system takes this weapon away from authorities? Tendencies For now, a government crackdown on crypto might look quite real: the Biden administration introduces a crypto bill and the Canadian court freezes millions in Convoy protestor funds — including Bitcoin . The situation in Canada also shows us methods of crypto tracing the government already has. Bitcoin may be uncensorable but it's also radically transparent and law enforcement has been remarkably successful at connecting bitcoin addresses to their users. Practice Bitcoin only solves the problem of financial censorship when individuals hold the keys to their own coins. When kept on an exchange the companies in charge maintain custody - just like any other bank.  That means that the government can put pressure on exchanges to freeze the bitcoin accounts which is exactly what happened in Canada where protesters' crypto assets were seized. Without an easy off-ramp into cash, spending the funds became a challenge for protesters. Concerns It should be noted that the anonymity of cryptocurrencies such as Bitcoin, Litecoin , Namecoin and others is understood as pseudonymity, in which a single violation of security measures (for example, the purchase of cryptocurrencies through a regular bank transfer) might lead to the disclosure of the owner's identity. Therefore, cryptocurrencies such as Dash and Zerocoin have been developed to enhance anonymity. Although governments can't ban blockchain use they can marginalize it and slow down its growth until the necessary tools for control will appear. The epicenters of the development of cryptocurrencies in the coming years may be some countries where the state and its financial institutions enjoy an extremely low credit of trust among the population.
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What is Pirate Chain (ARRR)? How to Buy Pirate Chain?

What is Pirate Chain (ARRR)? How to Buy Pirate Chain?

June Katz 5 min read
Pirate Chain (ARRR) is the most anonymous and private cryptocurrency, as its developers claim. It’s based on an asset chain on the Komodo platform, which is a fork of ZCash — a privacy-focused chain. Pirate Chain was launched by a group of developers from the Komodo network. Komodo has kept all the privacy features of ZCash, so it makes sense for Pirate Chain to utilize them. However, Pirate Chain developers have built on these features to ensure even higher levels of anonymity. Here’s a short overview of what Pirate Chain can offer its users. Pirate Chain Features Zero-knowledge proof (zk-SNARKS) zk-SNARKS (or Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a zero-knowledge method of constructing cryptographic proofs. Zero-knowledge proofs allow verifiers to check the truth of a statement sent by another party without knowing the details about the statement. Zero-knowledge Proof of Knowledge goes one step further, not only allowing to verify the statement itself but also the fact that the sender has the answer. Being succinct and non-interactive means that the verification takes a short time and doesn’t require exchanging information back and forth several times. zk-SNARKS is a very secure method of anonymizing (shielding) the transactions, as there’s no need to publish the details about the sending and receiving addresses, inputs and outputs. However, the way it’s employed by ZCash which has pioneered it leaves some information unprotected since the shielding on ZCash is optional. Delayed Proof-of-Work Delayed Proof-of-Work (dPow) is a security mechanism built upon the Proof-of-Work consensus protocol. The Pirate Chain periodically makes block-hashes, which are in essence the snapshots of this chain. Those snapshots are then group-signed and inserted by notary nodes into the main Komodo chain and the Litecoin chain through the process called notarization. This way, if an attacker wants to change some information within the block on Pirate Chain, they have to also rearrange blocks on both Komodo and Litecoin chains, which requires enormous power. Tor support In order to obfuscate not only sender and receiver blockchain addresses, but their IP addresses, Pirate Chain developers choose to support the Tor network. This is a proven tool for people wanting to protect their anonymity. Forced shielding As it was said above, the shortcoming of most of the anonymous networks is that anonymity is optional, left for the user to decide. This prevents the total fungibility of the tokens on those networks, as some of the transactions still can be traced and the token’s ‘baggage’ can be seen. Pirate Chain avoids this issue by forcing 100% of the transactions to be shielded. Pirate Chain (ARRR) Pros and Cons Pros The obvious argument for Pirate Chain is its anonymity, as there is a lot of users who value their privacy. The devs claim that ARRR crypto is better than other privacy coins — for example, it would win the comparison of Pirate Chain vs Monero ; The network is secured very well, allowing it to easily withstand the 51% attacks ; There is a strong community on social networks; It’s being actively developed. For example, there is a plan to roll out a wrapped Pirate Chain token (wARRR) on Binance Smart Chain on September 20, 2021, which has got DeFi fans quite excited. Cons The network’s privacy, which is its main selling point for its users, is a concern for some other people: for example, there is no way to know how much ARRR is in the hands of the whales. Where to exchange Pirate Chain (ARRR) Exchanging or buying ARRR is quite easy. Some of the Pirate Chain exchange options are KuCoin, Gate.io, Bitcoin.com Exchange, Changelly PRO, and CoinEx. One can also use SwapSpace as their Pirate Chain coin (ARRR) exchange, following this step-by-step guide: On the SwapSpace homepage, select ARRR in the “You send” section and the cryptocurrency you would like to receive in the “You get” section. Enter the amount of ARRR you want to exchange. Choose the instant exchange service that suits you most. Specify the recipient address and check if all the data is correct. Send your ARRR coins to the address you will see on the screen. Wait until the exchange is complete. Where to store Pirate Chain (ARRR) The best way to store Pirate coin (ARRR) is in the wallet developed by the Pirate chain team. This wallet comes in several variations: Treasure Chest, Skull Island, Pirate Wallet Lite, and Paper Wallet. Among the recommended wallets there is also Verus Desktop. Final thoughts Pirate Chain crypto is a great way to ensure the anonymity of the transactions, making it invaluable for those users who take their privacy seriously. It combines several different approaches to security in a way designed to protect every user of the ARRR token. This, together with the strong community and active development team, is very exciting for the Pirate Chain’s future. 
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What Is 1inch and How to Buy It?

What Is 1inch and How to Buy It?

June Katz 4 min read
What is 1inch 1inch is the native token on an eponymous aggregator for decentralized marketplaces. 1inch exchange allows its users to track multiple exchanges from a single platform. The protocol collects liquidity from DEXs, using smart contract technology for this purpose, splitting one transaction between several exchanges, which gives users the opportunity to optimize their transactions and get the best possible rates.  How it works The 1inch ERC-20 token is a control and utility token on the platform. It is used to control all 1inch network protocols through various modules, as well as a voting mechanism. It possesses the Instant Governance structure where the token holders and key protocol stakeholders can directly vote on protocol and configuration parameters. One of the key features of instant control is that bidders can continuously and dynamically vote to change protocol settings without waiting for bids to be submitted or completed. Each 1inch token holder can stake their tokens, as well as participate in the management of liquidity pools. The weight of each user's vote is in direct correlation with the number of tokens supplied. Advantages and disadvantages of 1inch + The 1inch token takes the management capabilities of the DeFi space to the next level. It enables the most efficient and transparent way to vote on certain protocol settings. With such a model, the voice of each user matters. Moreover, the token currently holds a position towards the end of the top-100 currencies. It has had valuable investors from its inception like Binance Labs, Galaxy Digital, Greenfield One, Libertus Capital, Dragonfly Capital, FTX, IOSG, LAUNCHub Ventures и Divergence Ventures. The project is also receiving much approval from Binance CEO Changpeng Zhao, who believes these are the protocols that are fueling the rise of DeFi. These factors indicate that there has always been interest towards the platform and its native token in the crypto circles. The technology was also tested by independent audit companies. - Despite the token’s success in 2020, the developers themselves have said it’s not an investment tool but rather a tool to use on the native platform or be implemented by third parties. This is further proven by the fact that, according to CoinMarketCap, no one stores 1inch for over a year, so the functions and value of the token are limited to the native ecosystem it belongs to. This poses a risk for the token since it’s in close correlation with the success of the eponymous platform. 98 percent of the token is also concentrated in the hands of large holders.  Where to buy 1inch During the inception of the token, users could acquire it if they adhered to certain criteria, as well as with the help of liquidity mining . Currently, 1inch is traded on most popular exchanges like Binance , KuCoin , FTX , Coinone , Huobi Global , OKEx , Uniswap , and CoinTiger . The trading usually happens in pairs with BTC, USDT, ETH, WETH, USDC, and such.How to exchange 1inch on SwapSpace? On  SwapSpace homepage , select 1inch in “You send” section and the cryptocurrency you would like to receive in “You get” section. Enter the amount of 1inch you want to exchange. Choose the instant exchange service that suits you most. Specify the recipient address and check if all the data is correct. Send your 1inch coins to the address you will see on the screen. Wait until the exchange is complete. Where to store 1inch Since 1inch has the ERC-20 standard, it can be stored on any suitable wallet like Trust Wallet , Atomic Wallet , MyEtherWallet , Exodus , Coinomi , imToken , MetaMask , and Ledger . The platform itself also supports any Ethereum -based wallets which are securely integrated into the platform, namely 0x Relay, Uniswap, Oasis, and Kyber Network .
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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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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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Top 7 Litecoin Wallets 2021

Top 7 Litecoin Wallets 2021

June Katz 5 min read
What is a Litecoin wallet? Litecoin is one of the oldest cryptocurrencies in the blockchain industry. It’s an open-source altcoin that has been prominent in terms of market capitalization for the past years. It survived many bear markets, went through bull runs, and showed its strength over the years. As soon as you start getting into Litecoin, you need to choose a wallet, whether you want to trade your coins — for example, through the crypto exchanges listed here on SwapSpace , — or to hodl them. A Litecoin wallet allows you to store, send, and receive LTC. We’ll guide you through finding the best Litecoin wallets for your needs. Some Litecoin wallets focus more on security, others on multiple functionalities, and others want an open and easy-to-use operating system. One important factor to bear in mind is access to your private keys . If anyone else has access to your private keys, they can access your funds and walk away with your precious Litecoin! Top 7 Litecoin wallets  Ledger Nano S Litecoin Core Litewallet Freewallet  Coinomi LiteAddress Guarda Wallet  1. Ledger Nano S One of the safest ways to store your cryptocurrency, and in this case your LTC, is by using the Ledger Nano S . It’s an LTC hardware wallet in the size of a USB-drive that you plug into your computer for access. The moment it’s attached, it connects to the Internet, otherwise, it remains offline and no one can gain access to your LTC. The best part is that it can store other cryptocurrencies as well: Bitcoin , Ethereum , Ripple, and over 50 other digital assets. The company behind the device is an established entity that prides itself on its robust security.  2. Litecoin Core While other Litecoin wallets are not specifically made for Litecoin storage, the Litecoin Core wallet is made for Litecoin only. It’s a free Litecoin wallet that works on Windows, Mac, and Linux devices. The moment you install the Litecoin Core wallet, it automatically syncs with the entire Litecoin blockchain and functions as a full node. It’s a more complex Litecoin wallet, but it’s a very safe wallet that allows you to contribute to the Litecoin blockchain at the same time. It only allows Litecoin, so if you want a wallet that supports multiple currencies, you should look for other options.  Also keep in mind that since it’s a full node, Litecoin Core has serious free space requirements (up to 80 GB, as of the spring of 2022, although you can also sync a pruned version of the database which can take up less). 3. Litewallet This is another wallet made to hold LTC only. It’s a mobile app, supported on iOS and Android. Litewallet is made by the Litecoin Foundation itself, which makes it one of the most trusted wallets for LTC. It’s lightweight and easy to operate while having low fees. Litewallet also has a good user support and a robust community in general. 4. Freewallet Freewallet is a good option for anyone that’s interested in a simple and easy-to-use Litecoin wallet. Within seconds you can create your own wallet and receive, send, and store your LTC. It’s a multi-currency online wallet that supports not just Litecoin, but also Bitcoin, Ethereum, and more than 30 other cryptocurrencies. Transactions between Freewallet users are completely free, and you can even purchase cryptocurrencies using your credit card. It’s an online wallet, so its security is slightly less effective than in an offline hardware wallet but Freewallet uses multi-signature transaction confirmation and two-factor authentication in place.  5. Coinomi As one of the earliest inventors of wallets outside of exchanges, Coinomi is a strong player in the industry. It offers native support to over 125 blockchains, and thereby more than 1770 tokens. It’s safe to say that it’s not just for LTC, but the wallet itself is very robust and a very complete product. It has all the privacy and security features you could wish for and the best of all, it’s available to anyone in the world. The wallet is translated into 25 languages and even offers representation in over 175 fiat currencies. When you don’t want to deal with hosting an entire blockchain, and still enjoy security, privacy, and a ton of other features, Coinomi is a good option. 6. LiteAddress When you want to take things up a notch in terms of security, you could choose a paper wallet. When you pick a web-wallet or an iOS wallet or Android wallet for your Litecoin, you have access to your funds all the time. It’s fast and easy and allows you to transfer your funds all the time. However, if you’re a true-holder you want to put your funds away for a long time. That moment, you can pick an LTC paper wallet. You literally print your money on a piece of paper and store it in a place where you find it safe. On the LiteAdress’ website , you can create your own Litecoin paper wallet in a matter of seconds.  7. Guarda Wallet The moment you’re looking for a wallet that offers more than just LTC storage, you could try the Guarda Wallet . It’s one of these companies that wants to offer support for each proper currency out there in the most user-friendly way. They offer a Litecoin wallet app, an iOS Litecoin wallet, an Android Litecoin wallet, and even a Chrome extension to provide even a more efficient way to store, send, and receive LTC. The wallet offers support for thousands of coins ranging from Bitcoin and Ethereum to Monero and Zcash . It’s said to be one of the best wallets out there in the current market when you want to handle multiple currencies.
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