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Centralised and decentralised exchanges where you can buy and trade tokens
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Hardware and software wallets for trading, NFTs and cold storage
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What a crypto exchange is
In the world of cryptocurrencies, one of the most important things to an investor is having the ability to buy or trade coins at any time. Whether it be the chance to strike it big on a coin or the opportunity to buy and sell whenever you please, there needs to be a service that allows this to happen 24 hours a day, 7 days a week. This is the job of an exchange. An exchange is a place where financial instruments like stocks or commodities are traded. In the traditional financial markets, some examples of exchanges are the New York Stock Exchange and the NASDAQ. Because of the trading that occurs 24/7 in crypto, there need to be places where investors can go anytime of the day, with the certainty their requests will be taken care of. On an exchange, you can either buy crypto with fiat currency or convert coins from one to the other - a feature unique to the world of cryptocurrencies. There are hundreds, if not thousands, of coins that are currently on the market. Due to the rapid pace that coins are created and traded, not all of them will be available on any given exchange - coingecko is a good place to check which exchange each coin is traded on. Some examples of centralised crypto exchanges are Coinbase, Binance, FTX and Kraken. While all of these are fairly similar, there are advantages and disadvantages inherent to each one. This is primarily due to the rambunctious nature of the crypto markets, as certain investing styles are more suitable to different exchanges. For example, FTX offers leverage trading, while Coinbase offers both a simple buy/sell interface, as well as market and limit orders. While centralised exchanges might be best for most users, there are also decentralised exchanges for those who wish to dive a little bit deeper into crypto. Some examples of these are Uniswap, Sushiswap and 1inch.
How to register on an exchange
In the year 2022, there are a variety of cryptocurrency exchanges to trade on. You could embrace the wild side and trade on a decentralized exchange like Uniswap or Sushiswap - or you could stick with the simpler route and head over to a centralized exchange (CEX). If it’s your first time doing this, it can be pretty tricky. Crypto is still an uncharted space in a lot of ways, so it’s important to feel comfortable before putting your money in the line. For starters, let’s head over to a CEX like Binance or Coinbase. For the sake of simplicity, let’s assume you’re in the United States. If you haven’t done this before, you’ll need to gather up some information to assist you in the process. Because Binance and other major exchanges adhere to KYC (know your customer) rules, you’ll need some form of identification card to verify your identity. After this, you’ll need to type in your email or phone number and perform two-factor authentication (2FA). Binance will send you a message to confirm it’s you trying to access their platform - you’re dealing with money after all, you wouldn’t want someone else claiming they’re you! Next, create a username and password - and write this down somewhere safe! If you get signed out of your account with no way to get back in, this can be a long and difficult process. If you’re able to, save the info on your computer so you don’t need to log back in everytime. Sometimes, an exchange might take a few days to verify your identity. You might need to give them a social security number (possibly only the last 4 digits) or a piece of paperwork to prove you’re a citizen. After this, you’re free to trade! While most exchanges have similar processes for onboarding new users, it’s important to make sure you’re prepared for when it’s time to start trading. Most will continue to require 2FA to ensure you aren’t being hacked, so always have access to your email or message app. Feel free to explore and see what every exchange has to offer - the possibilities are endless.
How to set up and use a VPN for crypto trading
Because the cryptocurrency markets are still so new, many of these assets aren’t able to be traded just anywhere. In the United States, for instance, those who wish to trade must use the US versions of exchanges like Binance and FTX due to legal reasons. Since crypto assets aren’t registered securities, there are often loopholes to jump through for US users to even engage with them. For the crypto-native, a virtual private network (VPN) is something you need in your toolbox. Here’s how it works. Let’s say you’re Alice who lives in New York. One of your Twitter followers recently told you about an exciting new cryptocurrency, and you’re excited to purchase it. You eagerly hop onto FTX US, only to realize it isn’t available. What are you to do? Instead of missing the opportunity to buy the next Bitcoin, you decide a VPN is the best choice of action. Essentially, a VPN disguises your IP address (the series of digits that displays where your device is being used) in order to make it appear that you’re somewhere you aren’t. Some popular VPNs are Nord, Express and Proton - all of which can provide you with different levels of accessibility and anonymity. While using a VPN, you can choose to appear as if you’re actually using the internet from Europe or Asia! As long as the location you choose allows for free trading of all cryptocurrencies, you’re good to go. While this is just one simple example of a loophole, many use VPNs to access novel DeFi protocols that aren’t often available in the US. Typically, the process is as easy as creating an account on the VPN site, downloading the software (most quality VPNs cost money), choosing your location and running the software. It’s as easy as that. Maybe one day the US will allow for increased exposure to all crypto assets, but until then, those who wish to trade freely must jump through loopholes like this. VPNs are legal in the US, but sites have the right to block your access to them if they find out you’re using a VPN. There are more ways to avoid this from happening, but these basic steps will help you get on the right track.
What Bitcoin is
Back in 2008, the Bitcoin whitepaper was penned by the anonymous Satoshi Nakamoto. Since then, Bitcoin has become a cultural zeitgeist and climbed its way to over $50,000. But what is Bitcoin, and how does it work? Bitcoin is digital money that was created as a solution for peer-to-peer (P2P) transactions - a decentralized solution with no middlemen, bank fees and waiting for funds. Bitcoin is backed by the blockchain, which is a term that describes an immutable public database holding the history of every Bitcoin transaction - forever. If one wished, they could go through the blockchain and view the very first transaction that used Bitcoin, although this might take a long time to find. Since Bitcoin’s inception, its price has risen a tremendous amount, mainly due to speculation on cryptocurrency exchanges. However, more recently investors have decided Bitcoin can serve as a digital store of value, similar to how gold is a store of value for many nations. As this information has spread, more investors have taken a liking to Bitcoin and cryptocurrencies as a whole, something early adopters might have never imagined. While Bitcoin was first hailed as a P2P solution, many have run with this store of value thesis and consider it to be the digital gold. Bitcoin was the very first cryptocurrency, and many have tried and failed to replicate its success. While there is only one true Bitcoin on the market - 21 million, to be exact - Bitcoin has led the way for thousands of other coins to come after it. The entire cryptocurrency market cap is over $2.5 trillion, all thanks to Bitcoin.
What Eth is
Ethereum is a blockchain that utilizes Proof of stake (PoS) algorithms to validate transactions. Created in 2013 by Vitalik Buterin, Ethereum was made out of a need for decentralization. Buterin had found himself feeling disgusted by the evils of centralized entities, and wanted to create something after connecting to the idea of Bitcoin. Many refer to the cryptocurrency as Ethereum, yet the proper name is ‘Ether’ as the network is named Ethereum and Ether powers the network. Ethereum can be viewed as a decentralized network of computers that run the Ethereum Virtual Machine (EVM) - the engine behind the whole Ethereum network. While Bitcoin is seen as a digital store of value similar to gold, Ether is a token that provides utility to users. To approve transactions and interact with the Ethereum network, users must spend Ether to pay for fees, which keep the machine churning. There are a variety of actions users can take on the network, thanks to smart contracts - blockchain programs that perform a series of actions. As the cryptocurrency ecosystem has grown, so has the number of users. Ethereum processes over a million transactions a day - the most of any blockchain. Due to the increasing number of users, alternative Layer 1 blockchains have popped up, hoping to capture Ethereum’s vast market share. As the competition has heated up, Ethereum developers have been working on a solution known as Ethereum 2.0. This series of changes seeks to “fix” the high fees and free up space for more transactions to go through, therefore resulting in a positive experience for users. Ethereum aims to be the money of the internet, providing a decentralized solution for a world overrun with centralization and toxic monetary policy.
What DAI is
In the cryptocurrency world, a stablecoin is a unique type of token that has its value pegged to the dollar. Created by MakerDAO, DAI is a stablecoin that is decentralized, as opposed to stables like Tether (USDT) and USDC. What is DAI, and how is it different from other stablecoins? DAI strives to be one of the few stablecoins that is actually backed, with various crypto assets locked to ensure this 1:1 ratio remains backed by some intrinsic aspect. As DAI is a stablecoin that lives on the Ethereum blockchain, its collateral is denominated in Ether and used to determine the ratio DAI is currently sitting on. Because DAI is decentralized, there is no one entity that can change the supply in any manner - only smart contracts have this capability. The benefits of a decentralized stablecoin may largely go unnoticed, mainly because all stables are the same price. However, in the event of some form of large scale bank run, collateralized stablecoins would win out and ultimately keep their investors’ (holders’) money safe and secure. There are various crypto stablecoins, but few operate as DAI does. This first of its kind decentralized stable has made its way to the top 25 crypto currencies by market cap while becoming one of the most reputable stablecoins on the market.
Basic overview of crypto currency history
In 2008, the anonymous Satoshi Nakamoto released the Bitcoin whitepaper to the public. Since this important day in cryptocurrency history, Bitcoin has risen to prices as high as $69,000 dollars, reaching a market capitalization over $1 trillion. How did crypto get to this point, and how far has the space come since these humble beginnings? Bitcoin was created to serve as a solution for the problem of peer-to-peer (p2p) transactions, and quickly caught on amongst Cypherpunks and avid believers in digital currency. Bitcoin’s innovation came through the novel blockchain technology, which allowed for a verifiable record of all user transactions involving Bitcoin. As the years went on, the cryptocurrency space saw other coins pop up like Litecoin and Monero, in addition to a multitude of failed projects and exchanges. While many failed, some like Binance were able to cement a place in the wild world of crypto, remaining one of the largest centralized exchanges in the space to this day. It wasn’t until 2014 when crypto saw a decent competitor to Bitcoin come along. The Ethereum ICO raised around $20 million, and quickly grew in popularity due to the innovative Proof-of-Stake (PoS) technology backing it. As more caught on to the innovations possible with blockchain technology, more coins utilizing PoS were created, ultimately driving more users and speculators to the space. Since then, Ethereum has risen to become the second largest coin by market capitalization behind Bitcoin, sitting at around $400 billion at the time of writing this. Crypto has experienced two previous market cycles in its relatively short history, and is currently in what many believe to be its third bull run. The total market capitalization has risen to over $2.5 trillion, and is currently around $2.3 trillion. Many major institutions from the world of traditional finance have caught on to crypto, and it seems as if more hop into the space with each passing month. As more money has been able to flow through various crypto projects and protocols, intelligent developers have created various innovations, whether it be decentralized finance or NFTs. The speed of innovation in crypto has been accelerating in recent years, and more money than ever is entering the space in new ways every year. Traditional venture funds are allocating a portion of their assets to crypto, helping further mass adoption and incentivizing new ideas. As time goes on, cryptocurrency will only continue to change and innovate - history has shown that this is something crypto is great at doing.
Who Satoshi Nakamoto is
Back in 2008, the anonymous Satoshi Nakamoto penned the now iconic Bitcoin whitepaper. But after 13 years, the world is still wondering who this mysterious Satoshi might be and why they never revealed their identity. In the Bitcoin whitepaper, Satoshi outlined how he had solved the infamous double-spend problem that had plagued previous attempts in creating internet money. Many had tried and failed at creating what we now know as cryptocurrency - but Satoshi had come up with a solution for a peer-to-peer electronic cash that actually worked. As Bitcoin began to spread amongst cypherpunks - enthusiasts of cryptography and computer security techniques - many began to wonder who this Satoshi was, and why the genius creator of Bitcoin chose to stay under the radar. There are very few pieces of evidence to go off of regarding Satoshi, as he only left a very small trail of crumbs - some messages on forums, the whitepaper, the first Bitcoin transaction and a goodbye message in 2011. The truth is, there might not be a single person on the planet who really knows Satoshi’s true identity. Many have hypothesized as to who Satoshi might really be, suggesting that the most obvious candidates are Craig Wright, Nick Szabo, David Kleiman and Hal Finney. There are interesting ledes that tie these individuals back to the Satoshi identity but, unfortunately, nothing is conclusive. Out of these four, only Wright and Szabo are still alive, and Wright has certainly not shied away from any attention. For many, the thrill of Satoshi Nakamoto stems from the reality that we might never identify them. Maybe the anonymous Satoshi is still alive somewhere, completely indifferent to the success of Bitcoin and cryptocurrency as a whole. Despite the anonymity, none can deny the debt the cryptocurrency community owes to Satoshi - without him, the world would be a much different place.
What anons are
In a world that’s increasingly becoming more digital, our lives are changing at a fast rate. Even money has become digital, with cryptocurrencies reaching a market capitalization of over $3 trillion in 2021. A strange world has built itself around crypto, with a diverse and eccentric community that has formed on Twitter, calling itself ‘Crypto Twitter’ (commonly referred to as CT). On CT, a majority of participants are anonymous - many of them might work in crypto, regularly participate in work calls and interact with financial institutions, yet maintain the opportunity to withhold their identity. You might find yourself reading about a new DeFi protocol, only to realize it was created by a few teenagers with anime profile pictures. This is the new paradigm of working in web3 - this is what it means to be ‘anon.’ Because of the flexibility that comes from working in a digital space, anons are able to experience the same things that any other person could, arguably with more benefits. Due to no one knowing the identity behind an anon - except for maybe a few close friends - these individuals are able to operate with impunity online. Nobody has to worry about who said what, or where a person came from in life. As long as anons are able to contribute like anyone else, this is allowed in crypto. Anons can take on any role in crypto, whether it be a community manager of a project or a shadowy super coder working on new DeFi primitives. You could even maintain anonymity and work as an analyst for a venture fund, so long as you put in the work. Some of the most successful individuals in crypto are anon - just think of Tetranode (crypto whale), Zeus (OlympusDAO) or TzTok-Chad (Dopex). Whether or not you choose this path is up to you. Not everyone is cut out for the life of an anon, as most of us enjoy recognition and will eventually fold, revealing our identity to the world. However, the benefits of anonymity cannot be understated. The crypto community is very welcoming and willing to accept anyone, so it could be worth it to fire up a new Twitter handle and start shitposting. Just make sure you pick the right anime pfp.
What tokens are
When Bitcoin first came to be in 2008, this was the first example of what the world now refers to as cryptocurrency. As the years have gone by, tens of thousands of crypto currencies have popped up, largely thanks to Bitcoin’s innovations. But what are these other tokens and how do they work? In the cryptocurrency world, any coin that isn’t Bitcoin or Ethereum is referred to as a token. While Bitcoin utilizes proof of work (PoW) algorithms to approve blocks, many tokens do not, instead opting for proof of stake, which is less intensive than PoW. Because Bitcoin was the first cryptocurrency, any token that isn’t as dominant as it is referred to as an alternative - hence the ‘alt’ abbreviation. Because of recent developments in the Ethereum ecosystem and its status as the definite Layer 1 coin, Ethereum isn’t considered a token anymore. At this point, you might be wondering why tokens exist. After all, if Bitcoin and Ethereum are the two strongest coins, why have any alternatives? Because of the ever growing crypto ecosystem, new technologies and use cases pop up nearly everyday. Due to this changing and constantly expanding demand, tokens pop up that fill a need in the ecosystem. Just as Bitcoin serves as a digital store of value and Ethereum is used more as a traditional currency, tokens like Solana or Chainlink fill their respective roles. Due to tokens typically having smaller market caps, they can be more volatile than Bitcoin and Ethereum. Those who wish to speculate on token should know the risks that come, as not all projects have proven themselves and generally carry elevated risk.
What a hardware wallet is and how it is different from a software wallet
While most individuals who own cryptocurrencies utilize centralized exchanges like Coinbase or Binance, there are ways to own your coins on a physical wallet. A hardware wallet holds your private keys away from the internet, this way you can interact with the blockchain without having to worry about the risk of malware or phishing. A hardware wallet can interact with most blockchains, and can be accessed at any time. Custodial services like Binance and Coinbase may allow you to own crypto, but they don't give you access to your private key. A hardware wallet is non-custodial and allows owners of crypto to feel secure knowing only they have possession over their private keys. If a centralized exchange like Binance were to be hacked (god forbid) anyone who had their money on it would be out of luck. Contrast this with the safety of mind that comes from owning a hardware wallet, and the choice is easy to make. While a hardware wallet like this might seem like an unnecessary hurdle, it is actually a precaution that everyone should take advantage of. As more enter the crypto space, it’s important they’re aware of the option of a hardware wallet, as crypto doesn’t optimize for security as much as traditional banks and exchanges do. It’s important to keep your money - and your private keys - safe, so a hardware wallet is definitely something to keep on your radar.
How to add and withdraw money from an exchange
There are tons of different ways to buy cryptocurrency, and thousands of different coins to choose from. If you don’t know anything about crypto and want to dive in, things can be pretty overwhelming. Let’s jump in. Exchanges like Binance and Coinbase make it easy to deposit money. You can use your bank account, PayPal or even a wire transfer. For most, using a bank account will probably be the easiest and fastest way to send money to an exchange. Centralized exchanges make the process easier, as most of their users will be entirely new to the crypto space, and won’t have any existing crypto on a wallet to mess around with. Once you’re ready to get started, you can verify your personal info with an exchange and wait for an approval, which could take less than an hour or up to a week - it really just depends on where you’re at and what exchange you’re using. After this, you can add your bank account info to allow for deposits and withdrawals. Most - if not all - banks are supported, but it might take time for an approval. Once you’re ready, you can deposit whatever amount you feel comfortable investing onto the exchange. From here, your exchange will show you a USD balance (assuming you’re in the United States) and allow you to trade crypto freely. It’s that simple. Once you’ve had enough and want to take some profits back into USD, you can withdraw just as easily. Just make sure to sell your tokens back into USD and specify the withdrawal amount, then wait a few business days. Voila! Just like that, you have interacted with a centralized exchange, and hopefully made some profits in the process. Happy trading!
Difference in forms of basic trading (e.g. spot and margin)
Crypto traders often get a lot of flack for their levels of risk tolerance, if they even possess any. While the cryptocurrency market is arguably the most volatile in the world, of course this community of degenerates figured out ways to introduce more risk - and even more gains. In trading terms, a spot position is one that refers to the direct purchase of assets. Whatever you buy is the most you can lose. Say you wish to buy $100 of Bitcoin with your new wallet. To do so, you could head over to an exchange like Binance and purchase this and receive the coins within minutes or less - easy as that. On the other hand, margin trading is a bit different - think of it as a means of increasing your risk in order to boost your upside, which can also lead to an increased downside. Margin offers speculators the ability to borrow funds in order to artificially increase a position size. Many exchanges offer leveraged trading up to as much as 25-50x, although levels that high can be very dangerous to the portfolio of an inexperienced investor. When a margin position goes up, traders can experience big gains very fast. After all, if you’re on 10x leverage and something goes up a lot, you’re going to make much more money had you stayed with spot trading. However, the opposite is also true. When a margin position goes down, a trader can get liquidated, losing their principal investment. These are just some of the ups and downs of margin trading - it’s important to gauge how this strategy might fit into your portfolio and investment thesis before you dive in with all of your money. Despite crypto’s volatility, traders can’t seem to get enough. Margin trading doesn’t usually work out for inexperienced traders over the long term, despite how easy it can be to 10x a smaller amount on your first or second try. Just like with any risky investment, something like margin should be utilized with only a small portion of funds and typically remain under 5x leverage. There are benefits to both strategies, as holding spot can often assist investors in downturns due to the minimal risk involved by comparison. You can’t get liquidated holding Bitcoin in a hardware wallet.
What the definition of a ‘shit coin’ is
In the world of crypto, it can be very difficult keeping up with every new coin or protocol that pops up everyday. Due to the ‘wild west’ atmosphere of crypto, a term has been crafted to describe a coin with very little - if any - purpose: the ‘shit coin.’ In the simplest of definitions, a shit coin can be described as a coin that possesses no inherent value and is ultimately a vehicle for pure speculation. Shit coins are created everyday, and there are far too many of them to create a comprehensive list. Shit coins typically relate to a popular topic at the time (like Elon Musk or Doge) and hold a very low price due to exorbitant supply, often having too many digits to count. Shit coins usually see a very brief pump, rising in price some exorbitant amount whether it be from a paid YouTube video or some influencer shilling it. There is no rhyme or reason to shit coins, which has made them such an odd occurrence in the now well-known crypto space. 2021 saw Dogecoin rise in price to nearly a dollar, becoming one of the top ten cryptocurrencies by market cap. Another shit coin that has done extremely well is the Shiba Inu coin, which saw gains that eclipsed Doge. Because of these projects’ immense successes, many spin offs were created in attempts to replicate the price appreciation of these basically worthless assets. In the traditional financial markets, companies must go through serious auditing to get listed on the market. Because of the innovations of blockchain technology and smart contracts, shit coins are able to be created at the drop of a hat - it’s that easy. While most (if not all) shit coins ultimately fail on a long enough time horizon, they’re still very interesting and fun to speculate on. Due to their low liquidity on exchanges, it’s often difficult for anyone to make a profit on it, and shit coin creators regularly rug pull their “investors,” sometimes for millions of dollars. Because of the challenges that come with speculating on shit coins, those who are thinking of buying should do their due diligence and avoid putting in large sums of money. There are many opportunities for making gains in the crypto market, and shit coins should generally be avoided unless you really know what you’re doing.
How to use Discord (strategically)
While much of the discussion around crypto comes from Crypto Twitter, a large number of projects and teams utilize the social messaging app Discord to communicate privately. But what is Discord, how can you use it effectively in crypto and what are some of its benefits? Discord is a communications app, allowing for both text and voice options similar to applications like Telegram or Skype. Used primarily by gaming communities and friend groups, Discord has allowed for coordination of users like never before. Create a Discord server, invite some friends and establish channels - just like that, you’ve set up a “home base” for you and your community. In crypto, there are a myriad of different communities, whether it be a DAO structure, trading group or team behind a novel DeFi protocol, there’s always a reason to group together. With Discord, this is easy. Creating a Discord server is a huge step up from simply congregating in a Twitter DM. Within your Discord server, moderators can assign roles and create different channels with specific purposes. This could be a channel for the backend developers of a project or a server for the community managers - this level of composability makes operating autonomously even easier. A major tenet of crypto is decentralization. Where centralized entities and corporations have failed us, those venturing into Web3 have made it their goal to do better and govern themselves more efficiently. Through ease of communication on apps like Discord, crypto as a whole is able to function smoothly and maintain its youthful spirit. Those who operate strictly within the world of Web3 know that email chains are dead - everything interesting happens on Discord and Twitter. If you’re new to this, you can start by creating a Discord account. The good part is you don’t even have to use your real identity if you wish to do so. Many in the crypto space operate anonymously - something that the community sees no issue with. Once you’re in, you can easily find communities that fit your interest, whether you search on Crypto Twitter or YouTube. Every Discord server has its own unique set of rules, so it’s important to pay attention to the laws of the land whenever you end up somewhere new. Most users are friendly, so while it can be overwhelming on a new server, simply ask for help and your new community will be happy to help you. As the world transitions to a more remote existence, Discord will only grow in popularity. It’s important to try and understand it now, so by the time you have to catch that job interview in the metaverse, you’re ready to go!
How to set up an anon twitter account
Privacy and anonymity have always been a large part of the cypherphunk ethos. For many of the earliest Bitcoin adopters, fortunes beyond their wildest dreams were acquired - which soon led to a problem. If one were to suddenly gain a vast sum of money, how do you keep things under the radar? As the years went on, crypto carved a niche for itself as a “nerdy” sort of digital money for those who were good at computers. Many didn’t see a need for it or viewed it as a scam, even as the price of Bitcoin and other alt coins continued to rise. Since then, crypto has found its way into the general public, but many still aren’t interested. Many see it as harmful to the environment, due to misconceptions of energy consumption or the supposed environmental impact NFTs cause. So what is one to do if they wish to discuss crypto but don’t want to be condemned for it? Enter the alt account. On the social media application Twitter, many might see celebrities and well known crypto founders discussing the currencies, but often other accounts - ones that are a little bit different. They may have a strange name - one that isn’t theirs - or a profile picture that is anything but a LinkedIn headshot. These are known as “alt accounts,” Twitter accounts for crypto lovers that are anonymous. On Crypto Twitter, a vast majority of accounts are anonymous, something the inhabitants don’t seem to pay attention to. It is a field dominated not by status or “who you know” but by what you know and how you market yourself. If you wish to join this unique and burgeoning new way to interact with the community, simply create a new Twitter profile and leave out your personal information - it’s that simple. Having an alt account is a great way to interact online freely with like minded individuals, all while retaining privacy if you wish to do so.
What an NFT is
You’ve probably heard a ton of buzz online about the NFT craze, but what really is an NFT? Going by the name ‘non-fungible tokens,’ NFTs have taken the public by storm, for better or worse. A form of digital art - or “expensive screenshots” - NFTs are a form of ownership unique to the blockchain that allow purchasers of these non-fungible tokens to claim a digital photo or video as their own. Due to the immutable nature of the blockchain, once someone buys an NFT, it can be seen as theirs forever - or at least until they sell it. NFTs have provided a new medium for artists to monetize their work, as the decentralized nature of the whole concept has led to many making life changing money through sales of their work. Where traditional art pieces can make it difficult to determine an owner, blockchains make it easy. Once someone has bought an NFT, the transaction lives forever on the blockchain. No one can make any adjustments to it, and a digital good bought is the same as a physical one, just easier to manage and hold ownership over. While NFT art has been catching most of the media’s attention, some have suggested NFTs could replace items in video games. Decentraland and The Sandbox are two metaverse blockchain games that offer players in-game NFT items - a novel idea for a group of gamers that have long been controlled by greedy corporations. There has been a ton of conversation surrounding NFTs, and it doesn’t seem like they’re going anywhere anytime soon. Keep your eye on the space, as a ton of exciting developments are happening everyday.
How to send crypto currency peer-to-peer
Bitcoin was created as a solution to solve the issues involving peer-to-peer (p2p) transactions. Due to the innovative blockchain technology, anyone from around the world can utilize the speed and efficiency of crypto to make payments or send money to a friend. In the world of traditional finance, transactions can take 5-7 business days - sometimes longer - and involve a multitude of hoops to jump through. Crypto fixes this. Curious to know how you can send money to family or friends? Let’s dive in. Because of the innovation that’s occurred in crypto since its inception in 2008, there are now a ton of ways to accomplish these p2p transactions. Some of the easier ways to do this involve linking a bank account to a centralized exchange like Binance or Coinbase and depositing funds. After you’ve done this, you’re free to choose whatever coin you wish to buy, as long as it’s available on the exchange you’re using. Before sending cryptocurrencies to other addresses (the identifier of a crypto wallet) it’s important to make sure you’re sending money to the right one. For example, Ethereum addresses - which have 64 characters - are different from Bitcoin addresses, which only have 26-35 characters. When it’s time to send your money, you can ask the recipient of the crypto to send you their address. Websites typically make it easy for you to simply copy the series of letters and digits to your keyboard, that way you don’t make a mistake and type the wrong address. On centralized exchanges there can be small fees associated with this, or transaction fees depending on what blockchain you’re using. After a short amount of time to allow the blockchain to approve the transaction, you’re all set! Just to be sure, ask the recipient if they see the balance in their wallet. On applications like Metamask, they might need to add that specific token to their wallet to view the balance. If they’re unable to do this, they can use a block explorer like Etherscan to view their token balances.
What a .eth address is and how to set one up
If you’ve spent any time on Crypto Twitter, you have probably seen an account with a ‘.eth’ at the end of their username. But what is this odd suffix, and how is it of any use to you in a web3 world? Just as web domains are unique on the internet, the Ethereum Name Service came up with a product that could provide the same utility for crypto users and fans. Based on the Ethereum blockchain, the team set out to create a way to map human identity or personality to an Ethereum address. An address is a series of 64 characters, and belongs to anyone who has interacted with the Ethereum blockchain before. Some examples of a .eth address could be ‘Sarah.eth’, ‘Adidas.eth’ or even something completely random, like ‘eyfjsiwrh.eth’ - the possibilities are almost endless. ENS domains allow for users to market themselves in a newly forming Web3 world, all while possessing ownership over the domain for as long as they’ve paid for. So, how can you get your hands on one of these .eth addresses, and how can you share it with those in the crypto world? To start out, you’ll need some Ethereum. You can either purchase this from a centralized exchange like Coinbase or buy some off of a decentralized exchange like Uniswap. After this, you can set up a wallet. Many blockchain enthusiasts use the Metamask wallet, which has its own Google Chrome extension. Depending on what blockchain you’re using, you’ll have to choose your network. By default, Metamask starts on the Ethereum mainnet. After this, you can navigate to the ENS website and search for one you want. Once you find what you’re looking for, feel free to register the name for as long as you want. It’s that simple. You can use a website like Etherscan to assist you while the transaction processes, and your address will be marked as the owner of the domain. That’s it! As more users and corporations flock to Crypto, ENS domains could be a way to stake a claim in the Web3 landscape. Just as DNS names took off in the earlier days of the internet, owning an ENS could prove to be a solid decision in the years to come.
What DeFi insurance is
Insurance is a way for people to protect themselves from potential risks. You buy insurance from an insurance company for some fee, and if an accident occurs, the company compensates you. Insurance companies are essentially a way for people to socialise their risks (e.g. illness, by pooling their money together. In DeFi, just as there are decentralised protocols built for people to lend out and/or exchange their tokens, there are insurance protocols where one can buy insurance against accidents on the blockchain — or put their funds in the insurance pools to cover others from losses in exchange for rewards. Insurance is still a nascent and fairly niche sector in crypto. DeFi insurance products typically give cover for smart contract failures (exploited bugs). While this is certainly a considerable risk when using DeFi in general, the cost of buying DeFi insurance on top of (for example) a DeFi loan is simply not worth the extra work for many people. As the industry evolves, we may see a broader use of insurance contracts issued on blockchains. Ironically, decentralised insurance applications may be exploitable themselves.
What a token is
The cryptocurrency market is filled with thousands (if not tens of thousands) of coins. With everything from dog coins to lending protocol based coins, there’s something for every kind of investor. These coins can often be referred to as tokens, but there are some major differences between the two concepts - let’s dive in. While a coin is something that is often used as a medium of exchange. Whether this be a peer-to-peer (p2p) transaction at a coffee shop or something more complicated like receiving a paycheck, currencies are everywhere and a major part of our lives. Bitcoin - the most renowned cryptocurrency - was created as a solution for digital p2p payments. While this hasn’t caught on a global scale (partially due to the vast innovations in crypto as a whole), Bitcoin was able to provide a new way to exchange money. Other examples of coins include Ethereum, Litecoin and Monero, each possessing different functionality and capabilities. A token is something that’s a little different, with the definition changing over time as crypto has evolved. Primarily, a token is an asset that has been built overtop an existing blockchain. Tokens can be used with decentralized apps (dApps) like Uniswap or Compound and their respective tokens, UNI and COMP. These tokens possess unique functionality, some of these being governance and yield generation. Where coins are sometimes limited in functionality - see Dogecoin - a token is something much more interesting or engaging to the web3 native. The burgeoning landscape of dApps has changed finance forever, sparking the movement known as decentralized finance (commonly referred to as DeFi). There are even non-fungible tokens (NFTs) which represent digital ownership on the blockchain - whether this be something as simple as a picture of your dog or a new song from an artist. Hopefully you’re seeing the vast differences between these assets and all that is possible with the innovations in crypto. Despite the relative youth of the crypto space as a whole, recent DeFi protocols have been able to change the perception of what tokens can do. Just look at the recent shift in interest towards Curve Finance, thanks to their vote escrow tokenomics which provide significant value to token holders. Tokens can even serve as in-game currencies, especially in games like DeFi Kingdoms and The Sandbox. As more users flock to crypto to experience these play-to-earn games, expect more unique token uses in crypto. While most of us might be in crypto to see coins go up in price, there is no shortage of impressive tokens to get your hands on in the meantime. So get out there and interact with different ecosystems - you might be surprised with all the unique tokens you find!
How to swap tokens on a DEX
There are currently a variety of ways to buy cryptocurrencies for the average user. One could turn to a centralized exchange (CEX) - like Binance or FTX - or choose to dive into the murky waters of decentralized finance (DeFi) and check out a decentralized exchange (DEX). Simply put, an exchange is a place where buyers and sellers of tokens can meet up to perform an exchange (no pun intended). However, there are some big differences between a DEX and a CEX, so let’s break down some of the key differentiators. Whereas a CEX typically consists of a centralized power structure (think of SBF running FTX or CZ running Binance), a DEX can be composed of an entirely anonymous team. Heck, nobody to this day knows the identity of Sushiswap’s Chef Nomi. While a CEX might have more going on behind the scenes, in an office or board room, a DEX is stationed on the blockchain, operating under a true peer-to-peer system. Uniswap and Sushiwap are two examples of popular decentralized exchanges, offering a vast selection of coins often unavailable on a CEX and an easy to use frontend. While a DEX operates based on smart contracts created by the team, they are fairly intuitive to the crypto-native individual. On a DEX, users can choose to trade how they wish, with functionality to adjust settings like slippage or gas fees for your swaps. Another huge benefit of using a DEX is the ability to operate cross-chain. While a CEX offers a simple frontend that shows you all of the possible coins to buy, there isn’t an option to operate on a specific blockchain you desire. There are fees that come with transacting on a CEX, and while they can vary, are often pretty straightforward and subject to little variation. On a DEX, the possibilities are much more vast. If you’re on Uniswap, you can choose to trade on Ethereum, Avalanche, Binance Smart Chain and more networks, offering even more coins and trading opportunities. While both types of exchanges operate in similar ways, there are more ways to interact on a DEX, which is often the go-to place to trade for the crypto-native. Sure, it’s easier for someone new to crypto to hop onto a CEX, verify their identity and buy some coins, but in the long term many would like to see DEX volume make up the entire market. It’s important to have options when it comes to trading, which is why you should weigh the pros and cons of these exchanges before you try them. Even if you make the wrong decision, you can always send money from one to the other pretty easily - that’s just one of the benefits of blockchain tech. Happy trading!
Traditional digital markets, like the NASDAQ stock exchange (as well as centralized crypto exchanges) work with matching engines built for so-called Limit Order Books: buyers and sellers have to offer up their goods at a certain price in a certain quantity, and wait to be matched with someone else to conduct a trade. This may sound simple in principle, but these orderbooks are a very competitive landscape where professional market makers compete with each other at split second speeds — it has been practically impossible to replicate this model on today's decentralized blockchains such as Ethereum.
The loss produced by providing tokens as liquidity to an AMM instead of just holding them, if the tokens diverge in price. Divergence loss is the difference between the value of an LP position vs the same account holding fixed amounts of those same tokens.
Starting with Bitcoin, cryptocurrencies have introduced a truly novel form of money (and more) to the world. The thing which unites and makes this asset class special is the technology referred to as blockchain; a set of algorithms and rules that constitute a distributed digital network where each participant (e.g. holder of a cryptocurrency) can be sure that their balances are correct and accessible — without trusting a central intermediary, like a bank. Ethereum, the second biggest cryptocurrency today, proved that blockchains are useful for more than just simple money transfers; it allows people to build decentralized apps, which, in less than a decade, has resulted in an explosion of Decentralized Financial (DeFi) protocols, and tokens of all kind, including NFTs. There are thousands of cryptocurrencies today with many created each day — it is important to understand the purpose and background of a token before buying it.
Layer 2s can make blockchain networks cheaper, faster, and therefore more useful for more people. Blockchain systems offer great technological benefits for money transfers and record-keeping in general; the main properties most often considered are decentralisation, trust– and permissionlessness, censorship resistance and immutability. These desired properties of decentralised networks come at the cost of limited throughput, however. Even the most prominent networks of today, Bitcoin and Ethereum are only able to handle a fairly limited amount of transactions in a given time period; an average BTC transfer takes about 10 minutes, and some interactions with Ethereum dApps can cost hundreds of dollars in gas fees during congested. times. Scaling solutions to blockchains are an advanced topic with much ongoing research and development. The technical descriptions and differences between each is beyond the scope of this explainer, but they are well worth researching for the curious. For Bitcoin, the most notable L2 solution is Lightning Network. Ethereum has numerous Layer 2 implementations, with the two main approaches being Optimistic Rollups and Zero-Knowledge Rollups.
The simple acts of Lending and Borrowing are prominent financial primitives that form the basis of many more complex financial products. Just as there are DEXes operated by Automated Market Makers that allow people to swap their coins seamlessly with each other, there are numerous lending platforms in DeFi.
Broadly speaking, leverage in finance refers to using borrowed funds to purchase something, with the expectation that the profits on the purchase exceed the borrowing costs. Leverage can come in various forms: financial derivatives like futures and options, mortgages for private persons. There are numerous platforms that give people access to leverage, both centralised and decentralised.
Liquidity is basically the abundance of a coin in a market. DEXes typically rely on liquidity pools, managed by AMMs, as opposed to the Limit Order Book system prevalent in centralized digital exchanges where professional market makers sell and buy from people with proprietary algorithms.
Staking crypto essentially means locking it up for future rewards — much like a savings account. The complexity of staking one's crypto, as well as the risks and rewards can vary depending on the coin and the place where it is staked.Bitcoin's blockchain relies on a consensus mechanism called Proof of Work, where the validity of the network is maintained by having people use their computers for solving math problems, roughly speaking. Proof of Stake is an alternative consensus mechanism that aims to alleviate the computational burden from a blockchain network via having people put their coins on the line instead. PoS networks include Solana, Avalanche and ETH2.0, amongst others. Setting up a Proof of Stake client can be quite technical and does not fit in the scope of this explainer. However, staking in the broader sense has been widely utilized by DeFi apps for various purposes, in which case it is as easy as clicking a button and paying some fees; like a savings account in the bank, but more transparent!
Insurance is a way for people to protect themselves from potential risks. You buy insurance from an insurance company for some fee, and if an accident occurs, the company compensates you. Insurance companies are essentially a way for people to socialise their risks (e.g. illness, by pooling their money together. In DeFi, just as there are decentralised protocols built for people to lend out and/or exchange their tokens, there are insurance protocols where one can buy insurance against accidents on the blockchain — or put their funds in the insurance pools to cover others from losses in exchange for rewards.
An option is a financial contract that give its buyer the right, but not the obligation, to buy or sell an underlying asset for a specific price (called _strike price_) on (or possibly before) a specific time. The most widely used exchange for trading crypto options is Deribit. They offer European style options for Bitcoin and Ethereum. There are also several DeFi protocols that allow people to buy or sell options of smaller cryptocurrencies, as well as protocols that automatically execute various options strategies in order to generate yield on people's deposits.
A bridge is a way to move cryptocurrencies from one blockchain to another. 'Bridging' to a Layer 2 is done sometimes by an official bridge supported by the Layer 2 or sidechain or using one of many third party bridges.