Category: Crypto

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The Metaverse 101

I’ve had a lot of questions over the past few months, since my last post on this topic. As such, here is a quick intro to the concept of the Metaverse!

Learning about the Metaverse can be complicated when you are first beginning because things might seem confusing. Once you have started to learn the most important parts though, the Metaverse becomes a simple world to understand.
Here are 10 facts that are easy to understand that can help you get started.

  1. Metaverse is an Artificial Universe
    When talking about the metaverse, people are discussing an artificial universe that allows people to be in a three-dimensional experience to help people interact in a more immersive way. Basically, it fuses both the real and virtual worlds.
    While you won’t be in the metaverse physically, you might feel like you are when using a VR headset. Many companies are starting to use things like VR headsets because it allows a person to attend business events or conferences without actually needing to travel and be there for real.
    You will also have a 3D space to meet with other people in the same profession or the same walk of life as you. It’s more than just the internet though. In the metaverse, you use more technology such as VR or gaming to have a sense of really being in the space even though you are not there physically.
    People are even starting to use the metaverse to attend concerts other events that they might not otherwise be able to go to. Since people are in an artificial universe, they are able to learn quickly and make more business opportunities than just using the internet alone.
  2. The Metaverse is for Everyone
    Some people might think that the metaverse is exclusive and only available to those with money or certain kind of businesses. This cannot be further from the truth though. Entering the metaverse is much easier than people might think, especially once you have your foot in the door and have learned the basics of what the metaverse is.
  3. The Metaverse Can Be Used for Many Different Purposes
    Many people have not become involved in the metaverse because they think it’s mostly for gamers. This isn’t true though, although many people use the metaverse for playing video games and for meeting visitors from all over the world.
    If you aren’t a gamer though, there are still many different opportunities for you to use the metaverse and some are even better than gaming. If you like to go to concerts but aren’t able to physically attend many of them, you can use the metaverse to see your favorite performer sing or dance.
    Some people even use the metaverse to travel. Since the start of the COVID-19 pandemic, many people have begun to travel online through virtual tours. With the metaverse and VR, you can easily take virtual tours of historic sites, museums, and many more places.
    If you are conducting a business solely online, you will also find that using the metaverse will encourage employee participation because it allows them to be more involved with each other and everyone around them.
    As an owner of a company, it’s important to make sure your employees are working together and that they know one another despite maybe not working face to face.
  4. You Can Make Money
    Although VR and some other things might necessitate you spending money to start, you can earn the money back through metaverse with some people even making regular incomes. Since metaverse is growing with more and more opportunities to work, you will also be making an investment with any metaverse and VR that you do.
    There are also marketplaces in the metaverse world where you can buy, sell, and exchange items including avatars, NFTs, event tickets, and virtual clothing. You can also use the metaverse to purchase event tickets and to do things like advertising, digital events, and e-commerce.
  5. You Can Own and Sell Land
    Most people do not know that there is such a thing as digital property. Most people say this is an asset you can expect to appreciate and make more money as time goes on. Metaverse coins are also continuing to grow and will be more and more lucrative as time goes on. They also give you an opportunity for a potential return on your investment.
  6. Metaverse is Not Owned By Anyone
    You would be surprised to know that most things you use, even online, are owned by someone. Some things are even owned by major companies or business owners. Metaverse on the other hand is not owned by anyone making it one of the only things in the world really that you can participate in without worrying about the owner and other things.
    All of the users in metaverse decide who controls their own private data and no one tells you what you can do and not do with your data which is very appealing to most people.
    There is a board that controls the metaverse though to protect people and to ensure there are no illegal activities. The standards of the metaverse are decided by W3C (World Wide Web Consortium). This is overall led by the man who made the worldwide web-Tim Berners Lee.
    Although there is leadership, there is not much control over the metaverse which gives you the freedom to do as you please.
  7. The Metaverse is a Safe Place
    You might think because there is no clear ownership and no real leadership that some parts of the metaverse might not be safe. This is not true though. The metaverse is very secure though because they use a special blockchain technology that makes the virtual world public. This also means that all transactions can be tracked keeping you safe when you buy or purchase something.
    Some people still have some concerns about the cyber security issues though and this is understandable with anything you might be doing online. Since the metaverse is online, there is always the possibility for attacks as with anything online.
    The underlying systems of the metaverse are usually the places that are targeted for being attacked and for stealing data. Since metaverse is not as popular, there are fewer security measures in place than you might find on other popular platforms.
    As metaverse comes becomes more popular and has a better outreach to people, these security measures should increase and your data will be more protected as time goes on.
  8. Working Will Soon Be Impacted By the Metaverse
    Many people work online these days, but that does not mean that they use the metaverse necessarily. Many people work online but just do phone calls or other methods of communicating without really doing VR or other metaverse technologies.
    If people continue to work more and more online and do not return to the office, it’s predicted that employers will want to engage their employees more often and some turn to metaverse solutions such as Horizon Workrooms which are a part of Facebook.
    More and more people are also saying that their jobs are starting to use VR when working from home and even when at the office for those who cannot attend certain conferences other events that the company might be hosting.
    VR is also estimated to have more than 23 million jobs. Metaverse has also allowed employees to work in broader areas and to strengthen their skills in different areas so that they are more diverse to enter the workforce. Metaverse has also shown the potential to make society more productive and to encourage different types of work throughout the workplace.
    Metaverse is also cutting down on duplication efforts and helping people work together from across different companies and specialties. This can save time in the workplace and make companies more open about work procedures and how things are done.
  9. Metaverse Cannot Exist Without Blockchain Technology
    This part of metaverse is still not developed as much as the other parts, but it has to be used for the metaverse to exist. The concept of blockchain is well developed though and is central to the metaverse and how this online world works around the globe.
    Blockchain technology is used for many different things including digital collectability, transfer of value, governance, accessibility, interoperability, and digital proof of ownership.
    Blockchain technology is also used to record transactions and track assets throughout the business network. An asset can be anything including a house, car, land, or cash. It can also be things not seen including intellectual property, patents, copyrights, and branding.
  10. Metaverse Isn’t Complete Yet
    While the world of the metaverse and all the potential it has is very exciting, the metaverse still has a long way to go until everything is truly in place. It might be another few years before you see it in your workplace or before you are using it every day. Some people even say that a full-fledged metaverse is over a decade away which means you might be waiting for a long time before you see its full effects of it.
    Most of the innovations that have to come are technical problems. For example, the current infrastructure does not support millions and billions of people being on metaverse at the same time.
    There also has to be a better internet connection, especially in underdeveloped parts of the world so that more people have access to the metaverse. Internet connection has to be stronger and more reliable for metaverse than for regular internet usage. Using a metaverse that is glitchy or slow is not reliable for what the metaverse should be like.
    Luckily, 5G is getting stronger and more useful every day, but it’s still under construction and development which makes it harder to use currently. However, it is currently not developed enough to meet the real-world needs of the metaverse and will leave people hanging when it cannot work properly or does not function.
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How to Evaluate an NFT Project

“Father Time” from the Snuggle Buddies NFT Collection

If you’re reading this article chances are you already know what an NFT is, and you’re probably a holder of at least one digital asset you like. The question is Why did you purchase it and what compelled you to believe in the project enough to spend your hard earned dollars? Let’s dive into that question and further explore several observations I have made over the past few years as the NFT market has continued to expand.

  • FOMO – The common abbreviation for Fear Of Missing Out. If you FOMO’d into an NFT project hoping you would find the next Bored Ape Yacht Club or Crypto Punk, that is NOT the right reason! You would probably do better driving down to the gas station and dropping $50 on a Powerball ticket. So what should you look for?
  • The Art – Do you actually like the artwork the project is creating? If you are a collector of digital art and you believe in the future of NFT’s you should be watching the top artists in the genre including Beeple, Pak, TylerXHobbs, Fewocious, and XCopy just to name a few. If you’re like most of us and you can’t afford to drop millions on a piece from one of the aforementioned, than find something You like for your own reasons. If you are solely focused on finding something you can buy low and sell high, it’s just not that simple. Buy what you like!

What should you look for if you want to invest in a strong NFT project? In no specific order here are the 5 top things I look for before I invest; 1) Community 2) Purpose 3) Utility 4) Vision 5) Value. If a project satisfies what I am looking for in 1 or 2 of these categories, I probably won’t invest. If it checks 3 or 4 boxes, it has my attention and I will take a serious look at it. That being said, I may have purchased one or two NFTs in the past simply because I like the art! Let’s go!

Community

I always begin with the community because it’s the easiest, quickest place to start. Who are the people behind the project and what is their background? Are they transparent on the plan (roadmap) and are the goals realistic? Is it just a cash grab? It’s takes a lot of time, money and resources to build games and virtual communities. Web 3 will not be here in 6 months in the capacity that most of us want it to be. That’s years away. Any community that promises something too good to be true…well, it probably is!

Next, jump into the discord and spend some time monitoring the chat. Does it feel like a strong community of people who understand the vision of the project? Or is it a bunch of teens using profanity, looking to flip as soon as there is a small move in the floor price? Ask questions in the chat! If you want to understand decisions being made by the team, the team needs to answer you. I recently observed this with a project I was very invested in. The questions being asked were fair and needed responses, but instead of responding the moderators (and the management of the project) simply booted the User/s from their discord…red flag! Also not cool!

Loner Girl 1817 from the Loner Girl NFT Collection

Purpose

The purpose should be crystal clear and easy to find on any projects website, linktree, or social media account. Here are a few actual examples from projects I have been in, are in now, or currently evaluating.

“Loner Girl – Women led project, featuring 10,000 original digital artworks. Supporting awareness of mental health and autism.” I happen to like the purpose and it speaks to me personally because I have a young daughter on the Autism spectrum. You should still dig deeper into the project to make sure they are following through with their purpose and learn exactly how. Are they involved with the ASD community and how? Do they give back? I am much more compelled to want to support and believe in a project when I can see that it has purpose, and bonus if it means something to me!

“Snuggle Buddies – An NFT project that values artwork, community, & family!” Again, just like above I happen to like the purpose of the project because as a single dad, I know the importance of community and family in my personal life. The team also has plans to launch children’s books and plush toys. How cool is that! In summary, if the project has a purpose which resonates with you, even more reason to support it.

Utility

Utility can be interchanged with the term use. It’s cool that I can use an NFT for my Personal Profile Picture (PFP) on social media, but do I really care that much? I am not a celeb, and I am not trying to prove to anyone how much money I have (or don’t have, from investing in the wrong NFT projects!). So what is utility? Simple put – What else do I get from owning this NFT? Here are some basics.

Access to a Unique Community No, I don’t mean the discord chat. By the way, I don’t have countless hours to BS in a chat room. I did that back in 1999 when AOL created chat rooms, and I thought it would be cool! It grew old fast. Access to a unique community means any or all of the following;

One on One Time with a mentor, coach or Subject Matter Expert (SME) in an area or field where I want to learn more. Example? The STIX OG Project I invested in. The project founder Nick Black has a special private chat group which is open ONLY to the holders of this NFT. We have unique, live video chat sessions where we can discuss, brainstorm and evaluate the crypto/defi/NFT market space and more. This is valuable to me because its what I do and how I make a living!

STIX OG NFT Conror McTaxEvader

Access to Special Events, Locations and Venues If you’re into NFT’s you prbably know about Vee Friends, the NFTs created by social media influencer and motivational figure Gary Vee. Holders of his Vee Friends NFTs receive special access to his programs, as well as free admission to his live speaking engagements around the world and so much more. It’s a ticket to learn, grow and earn…so much more than just a cool jpeg. Same thing with a project I am in now with entrepreneur and social media influencer Tai Lopez. Holders of his different NFT’s (and different levels) enjoy special perks ONLY available to NFT holders including live events and more. Tai even has an OG Hotel, Restaurant, and Club Membership card which provides the holders with guaranteed access to unique hard-to-get-into restaurants, night clubs and more! This week is Bitcoin 2022 in Miami – What’s my ticket to enter? The BTC Miami 2022 NFT I purchased! In summary, the utility of an NFT can have a huge impact on the present and future value of a project.

Vision Much like the purpose, the Vision of the Project should be easy to find and clear to understand. Most projects have the Vision explained on their website or linktree as their road map. Simply put, where do we intend to go and how will we get there?

The vision for a project is no different than your own personal life in that you make plans for where you want to go an how you want to get there. If you want to become a VP at your company, you make a plan to work hard, exceed quota, communicate clearly with the management and set goals. Once you establish your plan, you work to achieve the measurable goals and adjust your plan along the way as means of reaching your objective.

A clear vision should define the tasks needed in order to get the Project (NOT the founders!) to the finish line, as well as a realistic time line for reaching the goal. If a project has no vision, it tells me they have no idea where they want to go much less how to get there! I don’t really want to cry about the bad decisions I have made in projects which did not work, but I can unequivocally share that ALL of them lacked a clear vision for the future of the project.

Value Value is one of the more personal and nuanced factors because to assess because what has value to me could mean little or nothing to you. Let’s look at this.

I happen to enjoy nice cars and Porsche has always been my favorite since I was young. I don’t know that Porsche has come out with NFT’s yet (but if they want to, ping me!) but if holders of Porsche NFTs had special utility like access to the Porsche Club of America, track events, discounts, promo gear, etc. I would buy one! While this may seem like utility, it’s not the same because value can be viewed differently by everyone. To me, it would have tremendous value.

Other aspects of value can be time value and intrinsic value. Most NFT buyers and traders want to look at the intrinsic value meaning if I buy this NOW, how much is it worth and will someone want to pay me more or less than what I paid? It is a risky proposition since nobody has a crystal ball and can accurately predict this. That’s where time value comes into play and buyers try to evaluate if I buy this today, what will it be with 3, 6, 9 or 12 months? If you were LUCKY enough (yes, it was only luck!) to mint an NFT which became one of the super rare highly valuable projects, congrats! 99% of the projects are NOT like that! You got lucky.

How can you evaluate the value to you in an NFT if you believe in the 1) Community 2) Purpose 3) Utility 4) Vision 5) Value? If it’s a newly created project with little to no volume or history, the first thing to look at is Rarity. Any collection launched will have a limited number of pieces ranging from small (500) to large (10,000 or more). Most discord servers will tell their community where to check the rarity of a piece within a project. I like Rarity Tools but there are many sites and too many projects to be listed on each rarity site. A general rule of thumb for me has been the more more rare pieces, the more they will, over time, become more desirable as the project grows and matures. If you are willing to put in the time and effort, you just might be able to find a rarer piece for a fair value! I got lucky when I found this Paradise Trippie which ranked #136 out of 10,000 pieces and it was listed for far less than what it should have been worth!

Paradise Trippie #533, Ranked #136/10,000 in rarity

As the NFT market matures over the coming weeks, months and years, check back here for more insight. If you have a question about a project you’re interested in, hit me up on social media! Good luck you degenerate gamblers!

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What is Web 3.0? Metaverse?

What is Web 3.0 or the Metaverse? Sure, you’ve probably already heard that Facebook changed it’s name to “Meta”, but what does that really mean?

In order to understand this concept, let’s take a quick look at the history of the internet or the world wide web! The nascent days of the internet were basically from the early 90’s until the early 2000’s, as we watched the start of email (my first email account was dan@aol.com !!) and the creation of the first web sites. These sites were basicly static pages which contained information, but not yet e-commerce capabilities. This is referred to now as Web 1.0.

As the internet developed, along with bandwidth access speeds, applications, and services, we watched the evolution and migration towards Web 2.0. In fact, we are still in the Web 2.0 stage today! This included a new world of user-created content (social media) and blogs, as well as the idea of the Web as a platform.

While some industry titans like Elon Musk believe Web 3.0 is simply a buzzword, most of the crypto/defi/blockchain world is ready to prove him wrong! So What is Web 3.0? It is the next iteration of the world wide web which utilizes the underlying technology of the blockchain to provide users with a truly decentralized access to technology vs the centralized (stored and controlled) system in Web 2.0.

To take an excerpt from a recent Forbes article…”Web 3.0’s decentralized blockchain protocol will enable individuals to connect to an internet where they can own and be properly compensated for their time and data, eclipsing an exploitative and unjust web, where giant, centralized repositories are the only ones that own and profit from it.”

How does this definition compare to the Metaverse? Well, the metaverse is an extension of Web 3.0 creating a virtual world, or worlds, where the users can participate in the virtual world through the use of virtual and augmented reality headsets. While most of you think this means gaming or shopping, it’s so much more.

Let’s look at what happened during the Covid pandemic. Many people in the world learned that they could continue productive employment from the comforts of home. Zoom became an verb just like the word Google where daily lives transformed from the office to the couch, kitchen table, or backyard! Now imagine several years in the future where instead of commuting for an hour to the office, you simply slip on your headset, fire up your computer, and walk into the office (virtually!) to participate in your first meeting of the day with your other colleagues whom are already in the room! You take turns providing updates on recent product changes and sales, and then the Manager shows a five minute presentation about upcoming new product launches and sales objectives. Anything you can imagine in the course of your daily life can be transformed to the Metaverse world of the Web 3.0!

Does that apply to manufacturing, the service industry (restaurants and bars, etc.)? Of course not! But is has been estimated that the inclusion of Artificial Intelligence (AI) into the development of Web 3.0 will have a dramatic increase in the efficiency of Web 3.0 rollout compared to Web 2.0 (we are about 20 years into Web 2.0). So, if Moore’s Law** is accurate ((**Moore’s Law states (in layman’s terms) that the computing power of chips and processors will increase very couple of years, and we will pay less for them)) is it reasonable to expect a functional transition to Web 3.0 in 10 years?

Bringing artificial intelligence and natural language processing together with Web 3.0, businesses of all sizes across the globe can use this powerful combination to give their customers faster and more relevant results. Stay tuned if you want to learn more about AI!

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What is Cardano?

Cardano is a Proof-of-Stake Blockchain platform

Cardano (ADA) is a third-generation, decentralized proof-of-stake (PoS) blockchain platform designed to be a more efficient alternative to proof-of-work (PoW) networks. Scalability, interoperability, and sustainability on PoW networks like Ethereum are limited by the infrastructure burden of growing costs, energy use, and slow transaction times.

Yes, Cardano is a form of cryptocurrency. It can be purchased on most crypto exchanges. When evaluating the use of crytpo and the underlying technology, I like to first understand What does it do, and What is it used for? Like most crypto, ADA can be used to true peer-to-peer transactions where there is no use of a middleman (a credit card, a bank card, etc. all act as a middleman, and collect a fee for the service they provide).

Cardano is an ambitious project, and there are many potential uses for its technology across a variety of industries.

For a current, real-world example, we have Cardano’s partnership with the Ethiopian Ministry of Education. Cardano’s blockchain will store tamper-proof records for five million Ethiopian students. When those students pursue higher education and jobs, they’ll have their records and achievements available on the blockchain.

Here are other use cases for Cardano in different sectors:

  • Health care: Cardano’s blockchain can authenticate pharmaceutical products to avoid the risk of buying counterfeit medications.
  • Finance: Cardano can be used in developing countries as a record of people’s identities and to demonstrate their creditworthiness.
  • Agriculture: Blockchain technology can provide reliable supply chain tracking for farmers, hauliers, and merchants.

Charles Hoskinson, the co-founder of the proof-of-work (PoW) blockchain Ethereum, understood the implications of these challenges to blockchain networks, and began developing Cardano and its primary cryptocurrency, ada, in 2015, launching the platform and the ada token in 2017

The Cardano platform runs on the Ouroboros consensus protocol. Ouroboros, created by Cardano in its foundation phase, is the first PoS protocol that not only was proved to be secure, but also was the first to be informed by scholarly academic research. Each development phase, or era, in the Cardano roadmap is anchored by the research-based framework, incorporating peer-reviewed insights with evidence-based methods to make progress toward and achieve the milestones related to the future directions of the use applications of both the blockchain network and the ada token.

As of the writing of this, 73% of the Cardano token supply is staked* (see my prior post on staking). The total circulating supply of ADA is only 33.26 billion coins, meaning that only less than 10 billion are not staked.

Ouroboros is the first peer-reviewed, verifiably secure blockchain protocol, and Cardano is the first blockchain to implement it. Ouroboros enables the Cardano network’s decentralization, and allows it to sustainably scale to global requirements without, crucially, compromising security.

The protocol is the culmination of tireless effort, building on foundational research, and is propelled by a vision for more secure and transparent global payment systems, and a means to redistribute, more fairly, power and control.

Remember, Cardano is a software platform ONLY and does not conduct any independent diligence on, or substantive review of, any blockchain asset, digital currency, cryptocurrency or associated funds. You are fully and solely responsible for evaluating your investments, for determining whether you will exchange blockchain assets based on your own judgement, and for all your decisions as to whether to exchange blockchain assets with Cardano. In many cases, blockchain assets you exchange on the basis of your research may not increase in value, and may decrease in value. Similarly, blockchain assets you exchange on the basis of your research may fall or rise in value after your exchange.

Past performance is not indicative of future results. Any investment in blockchain assets involves the risk of loss of part or all of your investment. The value of the blockchain assets you exchange is subject to market and other investment risks

If you would like to read more about Cardano, click this link.

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What is Crypto Staking?

What is staking? Image Credit Motley Fools

If you’re a crypto investor, or just starting out in crypto, staking is a concept you’ll hear about often. Staking is the way many cryptocurrencies verify their transactions, and it also allows participants to earn rewards on their holdings.

But what is crypto staking? Staking cryptocurrencies is a process that involves committing your crypto assets to support a blockchain network and confirm transactions.

It’s available with cryptocurrencies that use the proof-of-stake model to process payments. This is a more energy-efficient alternative to the original proof-of-work model. Proof of work requires mining devices that use computing power to solve mathematical equations.

Staking can be a great way to use your crypto to generate passive income, especially because some cryptocurrencies offer high interest rates for staking. Before you get started, it’s important to fully understand how crypto staking works.

With cryptocurrencies that use the proof-of-stake model, staking is how new transactions are added to the blockchain.

First, participants pledge their coins to the cryptocurrency protocol. From those participants, the protocol chooses validators to confirm blocks of transactions. The more coins you pledge, the more likely you are to be chosen as a validator.

Every time a block is added to the blockchain, new cryptocurrency coins are minted and distributed as staking rewards to that block’s validator. In most cases, the rewards are the same type of cryptocurrency that participants are staking. However, some blockchains use a different type of cryptocurrency for rewards.

If you want to stake crypto, you need to own a cryptocurrency that uses the proof-of-stake model. Then you can choose the amount you want to stake. You can do this through many popular cryptocurrency exchanges.

Your coins are still in your possession when you stake them. You’re essentially putting those staked coins to work, and you’re free to unstake them later if you want to trade them. The unstaking process may not be immediate; with some cryptocurrencies, you’re required to stake coins for a minimum amount of time.

Staking isn’t an option with all types of cryptocurrency. It’s only available with cryptocurrencies that use the proof-of-stake model.

Many cryptos use the proof-of-work model to add blocks to their blockchains. The problem with proof of work is that it requires considerable computing power. That has led to significant energy usage from cryptocurrencies that use proof of work. Bitcoin in particular has been criticized over environmental concerns.

Proof of stake, on the other hand, doesn’t require nearly as much energy. This also makes it a more scalable option that can handle greater numbers of transactions.

How to Stake

As previously noted, not all cryptocurrencies offer staking. You need a cryptocurrency that validates transactions with proof of stake. Here are a few of the major cryptocurrencies you can stake and a little bit about each one:

  • Ethereum was the first cryptocurrency with a programmable blockchain that developers can use to create apps. Ethereum started out using proof of work, but it’s transitioning to a proof-of-stake model.
  • Cardano is an eco-friendly cryptocurrency. It was founded on peer-reviewed research and developed through evidence-based methods.
  • Polkadot is a protocol that allows different blockchains to connect and work with one another.

Start by learning more about any proof-of-stake cryptos that catch your eye, including how they work, their staking rewards, and the staking process with each one. Next, you can look for the crypto you want and buy it on cryptocurrency apps and exchanges. More on that topic will be coming soon!

Where to Stake?

Many of the cryptocurrency websites support staking directly through their site. You can also conduct research online, and find the most reputable sites and staking opportunities with the least amount of risk compared to the reward you are seeking. One example is a site called Looks Rare. Looks Rare is an NFT trading platform that, as of the time of this article, provides over 200% interest paid in WETH (Wrapped Ethereum) and their own tokens called LOOKS. (This is NOT an endorsement of Looks Rare*)

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What is Bitcoin and Ethereum?

Bitcoin is the first massively adopted cryptocurrency getting most of the attention and dominating other cryptocurrencies.

Bitcoin was born in 2008 when an unknown person or group of people named Satoshi Nakamoto published the Bitcoin whitepaper.

Since then, many other cryptocurrency systems (including many in the rest of this list) have considered Bitcoin as a model and created other kinds of cryptocurrencies based on the same concept and open-source computer code (in fact, if you want to, you can also take Bitcoin’s code and build your own cryptocurrency, you can find all of the code on GitHub).

On January 12, 2009, Satoshi Nakamoto performed the first Bitcoin (BTC) transaction by sending 10 BTC to a coder named Hal Finney.

By 2010, Nakamoto disappeared along with an estimated one million BTC. Bitcoin’s development and maintenance was taken over by the Bitcoin Foundation in 2012. Since then, and over the last ten years, the bitcoin price has continued to rise.

Why are people investing in Bitcoin?

  • Bitcoin is a globally accessible digital store of value.
  • People also use bitcoin as a currency. Today, more than 100,000 online merchants make transactions using bitcoin (BTC).
  • People buy bitcoin for the same reasons that investors buy gold or stocks — as a speculative investment with the expectation that the price will rise in the future.
  • Bitcoin is even used to collateralize other kinds of financial transactions. The programmable features of Bitcoin (like its multi-sig contracts) make it a perfect platform to build universal and cost-effective financial products and services.

What is Ethereum?

Ethereum, or the Ethereum Virtual Machine (EVM), is an attempt to build a new version of the internet. Rather than centralized hubs (or private companies) that control massive troves of personal data, Ethereum is designed to create more decentralized information networks enabled by a series of distributed nodes and Ethereum wallets.

The idea for Ethereum was developed in 2013 by Vitalik Buterin, who at the time was a computer programmer and contributor to Bitcoin Magazine. He was advocating for more functionality on the Bitcoin blockchain to make it easier for developers to build applications.

When his plan was met with resistance from the bitcoin community, he developed the framework for Ethereum, created a team, and published the Ethereum whitepaper. After a pre-sale to raise money to fund the development of the Ethereum Virtual Machine, the network went live on July 30, 2015.

If the internet is like a vast highway, then the current system has few on- and off-ramps. These existing ramps are also controlled by a toll of sorts, which either exists as actual fees or costs that require users to pay in the form of surrendering personal or financial data.

The goal of a decentralized internet is to give people control over their information, enable censorship-resistant technologies (these range from financial applications outside of corporations or governments, to better election technologies, to forms of gaming and data storage that aren’t stored on centralized servers), and remove the need/cost of third parties.

A decentralized internet replaces large, centralized gatekeepers that control the flow of information, with internet operating infrastructure that is spread all over the world. In other words, a decentralized internet provides many more on-ramps and off-ramps, which makes the internet more secure and more democratic.

Ethereum helps accomplish the vision of decentralized computing in two ways. The first way is to create a distributed system of nodes, which happens anytime a computer or miner joins the Ethereum blockchain — and anyone, with sufficient computing power, can become a node, which makes Ethereum a permissionless blockchain.

A node is any machine that contains a copy of the blockchain. The more nodes that exist, the more resilient Ethereum becomes to security breaches and outages.

A wide distribution of the network makes it possible for developers to build decentralized applications using open-source smart contracts, which is the second way that Ethereum is enabling digital decentralization. A smart contract is basically a computer program that executes a transaction after a series of requirements are met. Most Ethereum apps are written using the Solidity language (there are also other Ethereum-specific languages).*

*Source Credit – Abra.com

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Crypto ABC’s Part IV

Credit and thanks to Nick Black!

Market cap: The total value of all the coins of a particular crypto. Calculated by multiplying the current price per coin by the total number of coins in circulation. Typically used to rank cryptos, such as on the website CoinMarketCap.com. As of this writing, the total market cap for the entire crypto space is $1,958,973,106,141.

Maximalist: A person who believes in the primacy of one cryptocurrency over all others. Most frequently applied to adamant Bitcoin advocates: “He’s such a Bitcoin maximalist.”

MetaMask: A browser-based crypto wallet that is installed as an extension. Allows you to send Ethereum to individuals and businesses, store Ethereum and ERC-20 tokens, and store non-fungible tokens (NFTs) and collectibles.

Metaverse: A virtual world where people gather to live, work, and shop. First coined in the 1992 science fiction novel Snow Crash by author Neal Stephenson, the metaverse has gone from a means of “escaping” the real world to a lucrative market that Goldman Sachs and Morgan Stanley are projecting could reach $8 trillion over the next two decades. By using special hardware and software – such as a smartphone or a dedicated headset like the Oculus – users can have an immersive experience where it actually feels like you’re inside the virtual environment. Corporations are already staking their claim in the metaverse.

Microcurrencies: Microcurrencies refer to a new class of “penny cryptos.” These coins sell for pennies on the dollar but have racked up some of the biggest gains we’ve seen anywhere, even crushing gains made by Bitcoin by 75X, 211X, even 5,567X more in the same time frame.

Mining: The process of using hash rate power to solve a math problem, then verifying the most current transactions and adding a block of data to that cryptocurrency’s blockchain. Mining is used in cryptocurrencies that employ proof of work, such as Bitcoin. The miner that solves the block receives a mining reward of a set amount of the cryptocurrency being mined. Mining success depends on having hardware with a high combined hash rate.

Monero (XMR): This cryptocurrency was designed with a focus on privacy features. It’s extremely difficult, if not impossible, to trace transactions on the Monero network.

Moon: A way of expressing optimism that a cryptocurrency’s price will skyrocket/is skyrocketing, as in “To the moon!” Another popular variant is “When moon?” (See Lambo.)

Mt. Gox: In Bitcoin’s early days, Tokyo-based Mt. Gox was by far the biggest exchange, handling more than 70% of all trading. The name is actually an acronym for Magic the Gathering Online Exchange, as it had started out as a way to trade the digital playing cards for that well-known game. But the exchange was poorly run and subject to hacks that depleted its reserve of bitcoins. Mt. Gox went dark in February 2014, and days later reported the loss of 850,000 customer bitcoins. About 200,000 bitcoins were later found. But with the case moving slowly through the Japanese legal system, former customers have so far received no compensation.

Multi-sig: Short for multi-signature, it means more than one digital signature is required to authorize a transaction. Adds another layer of crypto security. Also can play a role in smart contracts that involve more than two parties.

N

Nakamoto, Satoshi: The pseudonym used by the person or group of people who wrote the Bitcoin white paper as well as the original code that runs the Bitcoin network. This person or group remains anonymous, as all attempts to uncover Nakamoto’s identity have failed. Australia native Dr. Craig S. Wright claims to be Nakamoto but so far has been unable to prove it.

Nifty Gateway: An online marketplace for non-fungible tokens (NFTs) where people can buy and sell digital goods such as collectibles, gaming items, and digital art. This is Nick’s favorite platform to use and the one he would recommend to beginners.

No-coiner: A person who owns no cryptocurrency. Term is typically used to describe a cryptocurrency skeptic.

Node: Any computer that connects to the Bitcoin network is a node. A computer that maintains an up-to-date copy of the blockchain and is able to verify all the rules of a cryptocurrency is a full node. To run a full node requires a copy of that cryptocurrency’s network software. Any type node can also serve as a wallet.

Non-custodial: This term refers to the private keys that control who can spend or move crypto in a wallet. Non-custodial means the user has the crypto in a wallet they control directly, as opposed to keeping coins on an exchange.

Non-fungible token (NFT): A unique token on a blockchain that cannot be replicated. NFTs can be used to represent digital art or even real-world assets. The sale of an NFT grants ownership of the asset it represents to the buyer. NFTs can be bought and sold like any other asset.

O

OpenSea: The current leading NFT marketplace.

Oracle: An oracle is an online trusted source of data used by a smart contract to settle the contract. Some crypto projects, such as Chainlink (LINK), were created to serve as oracles.

P

Paper hands: The tendency to panic sell your crypto at the slightest sign of trouble. The opposite of diamond hands.

Paper wallet: A piece of paper that contains a private key and a Bitcoin address. Somewhat of a misnomer since a paper “wallet” can’t actually store any cryptocurrency.

Peer-to-peer: The exchange of data – or in this case, cryptocurrency – between parties over a network without the need for a third party like a bank.

Pizza Day: The anniversary of the very first commercial transaction with Bitcoin, May 22, 2010. A programmer named Laszlo Hanyecz bought two pizzas for 10,000 bitcoin.

Pre-mine: When the supply of a cryptocurrency is created in advance of its launch, as opposed to the creation of supply over time by some method such as mining. Frequently used by ICOs.

Private key: A very long password used to unlock your cryptocurrency so you can withdraw it from your wallet to spend, sell, or send to another address. Losing or forgetting your private key means permanently losing access to your crypto. Anyone who gains access to your private key can steal your cryptocurrency. Never, ever, ever share your private key with anyone ever under any circumstances.

Proof of stake: An alternative system for securing a network and maintaining a blockchain. In proof of stake, users put up collateral tokens of a crypto (their “stake”) in return for becoming a “validator” of its blockchain – the same function as miners in a proof-of-work system. For each block, the network chooses a validator at random to record and verify the data. The chosen validator earns fees for performing that task; the larger the stake, the higher the odds of being selected to validate a block. Ethereum has plans to move to a proof-of-stake system.

Proof of work: As computers mine cryptocurrency, they expend computing power (measured by their hash rate) in an effort to be the first to solve a math problem. The winner verifies the next block in the blockchain and receives a reward. The computing power expended is the “proof of work” that tells the network the winning miner has earned that reward.

Protocol layers: Think of these as the roads and highways that connect the entire cryptocurrency space. Cryptos like Polkadot (DOT) and Algorand (ALGO) fall into this category.

Pseudonymous: Most cryptocurrencies, including Bitcoin, are only partly anonymous. Because a cryptocurrency address is simply long string of numbers and letters, it offers some level of privacy. But it is often possible, with some effort, to link those addresses to individuals. Privacy-oriented cryptocurrencies such as Monero have additional code to make it virtually impossible to link addresses to individuals, and are considered truly anonymous.

Public key: The wallet address (the alphanumeric string of letters and numbers) you give to others in order to receive cryptocurrency.

R

REKT: A phonetic spelling of “wrecked.” This term was borrowed from the online gaming community, where it describes a person who suffered an especially bad beat. In cryptocurrency, it means a severe financial loss: “When Bitcoin crashed in 2018, I got REKT.”

Ripple: A source of constant confusion outside of the crypto community (and sometimes within it). Ripple is the company that created the XRP cryptocurrency in 2012. It incorporates XRP into its business of facilitating payments between financial institutions. But XRP should not be referred to as “Ripple,” which is a common mistake. And XRP advocates will call you out on it.

Rug pull: A scam crypto project that “pulls the rug out” from investors by enticing them to swap a valuable crypto like Ethereum for a new token that promises massive gains. The scammers then drain liquidity for the coin from its trading pools on DeFi exchanges, making it near impossible to sell and leaving victims with worthless tokens. Also known as “getting rugged.”

S

Satoshi: The smallest unit of Bitcoin. One satoshi is equal to 0.00000001 bitcoins (one hundred-millionth of a bitcoin). Also referred to as “sats” for short. Named in honor of Bitcoin’s creator, Satoshi Nakamoto.

Scamcoin: Cryptocurrencies with no real purpose other than to fool investors, thus enriching the coin’s creators at the expense of the investors. Most often found among ICOs. Sometimes used derisively by crypto enthusiasts for a coin they dislike, regardless of whether it is an actual scam.

Security token: A cryptocurrency backed by an asset such as gold, real estate, or other investable assets such as ETFs. A security token must comply with the Howey test. Allows for a single physical asset to be subdivided digitally among many owners (one gold could be split into 100 security tokens owned by 100 different people). The initial sale of this variant is called an STO (security token offering). Considered a safer, better-regulated alternative to ICOs.

SegWit: A portmanteau of the phrase “segregated witness,” a technology introduced to the Bitcoin protocol in July 2017. By changing how the data is stored, SegWit makes it possible to squeeze more transactions into each Bitcoin block, thus helping to address Bitcoin’s scaling problems. SegWit also fixed an issue called transaction malleability, which opened the door to second-layer technologies such as the Lightning Network.

Sharding: A process of slicing up a large blockchain into smaller pieces to make it easier for the network’s nodes to manage. Instead of each node storing the entire blockchain, it need only process a part of it. Sharding allows less powerful computers to participate in a cryptocurrency network and aids scaling. Sharding is expected to be implemented on the Ethereum network by 2021.

Silk Road: An online market on the dark web (invisible to search engines like Google) that the FBI shut down in 2013. On Silk Road, people could use Bitcoin to buy and sell legal products as well illegal drugs. The association with the illegal activity created a cloud over Bitcoin that lasted for years.

Slippage: On a crypto exchange, a change in the price of a market order between the time it is placed and the time it is executed. The likelihood of slippage increases during times of high market volatility.

Smart contract: A “self-executing” contract that uses cryptocurrency as both the defining and the enforcement mechanism. The contract executes when the software determines that the conditions set forth in the code (and agreed upon by the participants) have been met. Often data from an oracle is used to determine if the contract conditions are met. Once executed, the smart contract is recorded as part of that cryptocurrency’s blockchain database – thus creating a permanent record of the contract.

Stablecoin: A cryptocurrency designed to have constant value relative to some other asset or group of assets. Most stablecoins are pegged to the U.S. dollar, though some are pegged to gold or other commodities. In theory, the administrators of a stablecoin should hold an amount of the pegged asset equal to the value of all the units of that stablecoin. So if there are 10 million units of a stablecoin backed by the U.S. dollar, the administrators should have $10 million in an account to back it.

Staking: Crypto staking involves committing some or all of a particular crypto you hold to help validate transactions on as well as maintain that crypto’s blockchain network. In return, stakers earn rewards at regular intervals. Usually your crypto must be “locked” on the network for as long as you keep it staked.

T

Token: A digital asset distinct from a cryptocurrency (like Bitcoin), although the terms are often confused. There are three basic types: a utility token, which provides access to a product or service offered by the company that created it; a security token, which represents an asset; and an equity token, which represents ownership in a company (like a share of stock does). Token projects are usually built on top of an existing crypto network such as Ethereum.

Tokenomics: The details of how a specific cryptocurrency works. It includes how the coins are created, the maximum supply, the means of distribution, how many coins are retained by the project’s creators as well as the conditions under which they might be released or sold, and, if applicable, how coins are “burned” (destroyed) as part of supply management.

Total value locked: The aggregate value of all the assets staked in a DeFi platform (usually expressed in U.S. dollars).

Transaction fee: A payment associated with a cryptocurrency transaction. Fees usually go to those who maintain the network (in the case of Bitcoin, miners get the fees). Fees can vary widely depending upon the cryptocurrency, but are usually very small.

Transactions per second (TPS): The number of transactions a cryptocurrency’s underlying network can process in one second. The higher the TPS, the better the network’s ability to handle surges in activity.

Trustless: A quality of most cryptocurrencies in which no party need trust another, a product of having no central authority. With crypto, the network processes a transaction and writes it into the blockchain (the digital ledger) for all other nodes to verify. This eliminates the need for a trusted third party such as a bank to process and verify transactions.

Turing complete: A programmable system capable of solving any computational problem. Some cryptocurrencies, such as Ethereum, are considered Turing complete – programs (known as dApps) can be executed on the network itself.

U

UniSwap: One of the most popular decentralized crypto exchanges where user can simply “swap” one crypto for another. See decentralized exchange.

Utility token: A type of cryptocurrency token designed to provide access to a particular product or service offered by the company that created it.

UTXO: Unspent transaction output – how a network tracks cryptocurrency ownership. Each time a person receives crypto into their wallet, it creates a new UTXO in that amount. All of the UTXOs in a wallet, and the amounts of crypto they represent, adds up to how much crypto that wallet holds in total.

V

Validator: On a proof-of-stake network, a participant tasked with verifying transactions on the network. Validators typically must “stake,” or lock, a certain amount of the crypto asset to qualify as a validator. Validators typically earn rewards for performing this role. Validators are the equivalent of miners on a proof-of-work network.

Ver, Roger: One of the earliest investors in Bitcoin, Ver became a tireless evangelist for the cryptocurrency and earned the nickname “Bitcoin Jesus.” Since siding with the faction that advocated for the Bitcoin Cash fork in 2017, Ver has maintained that Bitcoin Cash is the “real Bitcoin” and his influence in the crypto community has waned.

W

Wallet: A software program or hardware device that receives and stores cryptocurrency. Moving or spending the stored crypto requires the user have their private key. See hot wallet, hardware wallet, paper wallet, cold storage.

Weak hands: Owners of crypto who panic sell on pullbacks.

Whales: People or institutions who hold and trade large amounts of cryptocurrency. It is widely assumed that whales manipulate crypto prices.

White paper: A document prepared by a developer team to describe the purpose, structure, and roadmap of a proposed cryptocurrency. Typically used to entice investors into a new project.

Winklevoss, Tyler & Cameron: Twins who became known for suing Mark Zuckerberg for stealing the idea for Facebook from them while all three attended Harvard University. The “Winklevii” invested part of their $65 million settlement into Bitcoin, and have since founded a crypto-related enterprise, the Gemini Exchange. Their Bitcoin holdings are believed to exceed $1 billion.

Wright, Dr. Craig S.: An Australian-born computer scientist who claims to be Bitcoin’s creator, Satoshi Nakamoto. However, Wright has failed to prove that he has control of any Bitcoin that Nakamoto is known to have mined. Wright remains a controversial figure who also helped drive the creation of the Bitcoin “Satoshi’s Vision” (BSV) hard fork, which he maintains is the “real Bitcoin.”

X

XRP: See Ripple.

Y

Yield farming: A way to earn more crypto on your existing crypto by lending it to a DeFi operation like Uniswap. In return for supplying liquidity, yield farmers earn fees and usually rewards in the form of crypto tokens. Yield farmers will move their money frequently as they search out the highest returns. Also known as liquidity mining.

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Crypto ABC’s Part III

Credit to Nick Black and the Crypto and Coffee Team!

Game theory: The process of modeling the strategic interaction between two or more players in a situation containing set rules and outcomes, often employed by Nick Black to determine the best strategy for profiting from a crypto investment.

Gas: The unit used to calculate the computational effort required to execute a transaction on the Ethereum network; in essence, the amount of gas required sets the transaction fee. The Neo cryptocurrency also uses the gas method to calculate fees.

Genesis block: The very first block of data created in a blockchain.

Ghost chain: A cryptocurrency with a high market cap but little to no real-world usage. Frequently used as an insult, often without justification.

Halving or halvening: An event in which the block reward given to miners for solving a block is cut in half. Bitcoin has had three halving events so far. The first reduced the mining reward from 50 bitcoins to 25; the second reduced it to 12.5 bitcoins; the third reduced it to 6.25. This type of event only applies to cryptos that use a proof-of-work (PoW) system.

Hardware wallet: A physical device designed specifically to store the private keys of your cryptocurrency offline (in cold storage). These devices are sold commercially.

Hash rate: The speed at which a computing device (e.g., mining hardware) can convert a set of data into a “hash” – an alphanumeric string of characters. It’s described in hashes per second. So a “megahash” is 1 million hashes per second, and a “gigahash” is 1 billion hashes per second. The power of mining hardware is determined by its hash rate – the higher the better. The higher the hash rate of your mining equipment, the more likely you are to solve a block and receive the block reward.

HODL: A term that describes a crypto investor’s determination not to sell regardless of price action. A person who does this is called a “HODLER.” Originally a misspelling of the word “hold” in a Bitcoin forum post in 2013, it is invoked often by crypto enthusiasts on social media. Also understood to stand for the phrase “hold on for dear life,” as derived from the component letters.

Hot wallet or hot storage: A cryptocurrency wallet connected to other networks or the Internet, and thus considered more vulnerable to hackers.

Hoskinson, Charles: Co-founder of Ethereum and founder of the Cardano (ADA) cryptocurrency.

Howey test: A test created in 1946 by the Supreme Court to determine if an investment fits the definition of a security. Using the Howey Test, the Securities and Exchange Commission (SEC) views most Initial Coin Offerings as securities – meaning they were sold to the public illegally. The criteria are: 1) whether money was invested; 2) whether the investor has an expectation of profits; 3) whether the invested funds are pooled in a common enterprise; and 4) whether any profits made derive from efforts and operations outside the investor’s control.

ICO: Stands for initial coin offering, a form of crowdfunding done in which an organization creates a cryptocurrency and then offers a portion of the total for sale to buyers. The money raised is used to fund the project, much as capital raised in a stock IPO is used to fund a new company. Some ICOs were later revealed to be scams that simply stole investors’ money. Also, the format used by most ICOs runs afoul of the Howey test, making most of them illegal.

Lee, Charlie: Lee is the computer scientist responsible for the creation of Litecoin (LTC), which he based on the open-source Bitcoin code. He sold nearly all of his Litecoin in 2017 to avoid the appearance of a conflict of interest. He remains the managing director of the Litecoin Foundation. His brother, Bobby Lee, founded the Chinese cryptocurrency exchange BTC China.

Lightning Network: A second layer on top of a blockchain network that enables near-instant, low-cost, secure transactions by creating payment “channels.” Plans are for the fully developed networks to allow for millions of transactions per second (a credit card system like Visa can process 45,000 per second). When fully developed and deployed, Lightning will solve Bitcoin’s scaling issues. Lightning also facilitates atomic swaps between different cryptocurrencies.

Litecoin (LTC): A cryptocurrency derived from Bitcoin’s code base by Charlie Lee and released in October 2011. Employs faster block generation times than Bitcoin (2.5 minutes rather than 10 minutes), a larger maximum number of coins created (84 million rather than 21 million), and a different hashing algorithm.

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Crypto ABC’s Part II

Again, with Special Thanks to Nick Black and the Money Map team!

dApp: Short for decentralized application, a kind of application that runs on a distributed, decentralized network, such as the Ethereum network, rather than a device such as a smartphone or PC.

Decentralization: The concept of having no central authority such as a company, a government, or a central bank in control of a blockchain (only the code governs the system) as well as having dispersed infrastructure (nodes and miners) to prevent any one entity or group from gaining too much influence.

Decentralized exchange (DEX): A crypto exchange that allows for peer-to-peer cryptocurrency transactions (often called “swaps”) without the need for an intermediary. Part of the DeFi ecosystem. See Uniswap.

DeFi: Short for decentralized finance. It’s a catch-all term for a digital ecosystem of smart contracts, decentralized exchanges, and special-purpose tokens built mostly on the Ethereum network.

Deflationary: A condition in which a currency gains value (i.e., buying power) over time. Some cryptocurrencies, most notably Bitcoin, are designed to be deflationary by gradually constricting the supply until it reaches a hard cap, after which no more coins will be created.

Diamond hands: Owners of crypto who refuse to sell no matter what’s happening in the markets. The opposite of paper hands. Also see HODL.

Difficulty: On a proof-of-work network like Bitcoin’s, the difficulty is a number representing how much mining power (hashrate) is required to solve a block. The Bitcoin network adjusts the difficulty every 2,016 blocks to try to keep the rate of new blocks steady at one every 10 minutes. As more mining power is added to the network, the difficulty rises. If mining power leaves the network, the difficulty falls.

Digital Fiat Currency (DFC): See Central Bank Digital Currency.

Discord: A popular communication platform within the cryptocurrency community that gives investors a way to chat with other investors directly or even create a larger community where you can share information instantly through direct messages (DMs).

Dollar-cost averaging: Borrowed from the world of conventional investing, DCA is buying a specific amount of a particular investment at regular intervals. Usually this buying is automated, with the investor setting up the parameters at their brokerage or exchange.

ERC-20: A standard for building new cryptocurrency tokens based on the Ethereum network, ERC-20 tokens are created via Ethereum’s smart contract capabilities. Most ICOs have been ERC-20 tokens.

Ethereum (ETH): A cryptocurrency created by Vitalik Buterin in 2015, Ethereum is second only to Bitcoin in market cap and influence. Built as a platform, Ethereum can run as a global, shared computer, making it Turing complete. That makes it capable of running specialized apps, known as dApps. In addition, hundreds of separate cryptocurrencies based on the ERC-20 standard run on top of Ethereum.

Exchange: A business or website that facilitates the trading of cryptocurrencies for fiat money (such as U.S. dollars), as well as trading between cryptocurrency pairs. Can be centralized (a company like Coinbase) or decentralized (an automated market maker like Uniswap).

Faucet: A website that dispenses tiny amounts of cryptocurrency for free. Visitors earn crypto by playing simple games or performing some other task such as watching videos. Popular in the early days of crypto. Generally not worth the time or the effort now.

Fiat currency: Money created by a central bank, such as the U.S. Federal Reserve (U.S. dollar) or the Bank of England (pound sterling). Many cryptocurrency enthusiasts believe fiat currencies will someday fail and be replaced by crypto.

Five Ts: A framework created by Nick Black in order to evaluate a new crypto investment, the 5Ts include team, technology, tokenomics, timing, and the problem.

Flippening: The unseating of Bitcoin as the dominant cryptocurrency by another crypto. The term became popular in mid-2017, when Ethereum’s percentage of the combined market capitalization of all cryptocurrencies rose to within seven percentage points of Bitcoin’s. Since then, Bitcoin reasserted its dominance. The Bitcoin percentage of the total crypto market cap typically hovers at about 60%.

FOMO: Short for “fear of missing out,” this describes the anxiety investors feel watching the price of a cryptocurrency skyrocket while they sit on the sidelines. Typically leads to poor investment decisions (buying at or near the top), but adds fuel to a strong rally.

Fork: Changes to the software that runs a blockchain – the software run by miners and people operating nodes – that creates a new version of the cryptocurrency. Soft forks tend to be benign, either used to launch a new crypto project (for example, Charlie Lee used Bitcoin’s codebase to create Litecoin) or to fix errors in a cryptocurrency’s codebase (no new crypto is created). A hard fork usually creates a new, competing version of a cryptocurrency, such as the Bitcoin Cash fork from Bitcoin. In a hard fork, the resulting two cryptos share a common transaction history prior to the fork. In addition, people who hold any amount of that crypto before a hard fork own equal amounts of both after the hard fork.

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Crypto ABC’s

It’s been a while since I’ve posted on the blog, as I’ve used social media (IG and Twitter) for the past year as my primary means of sharing info. The markets are changing quickly and so now its time to get back in the blog, and see where it goes!

The reason that cryptocurrencies are called cryptocurrencies is that they all have the commonality of being a digital asset that uses a decentralized ledger secured by public-key cryptography. Cryptocurrency is a digital unit of value that belongs to a private key. Users send and receive funds through public addresses, which are supported by cryptocurrency wallets (interfaces that allow for easy interaction with a blockchain) system for generating public addresses and private keys.

Most of the questions I see lately revolve around Crypto. With the help of a few friends at Money Map Press and Nick Black, I have assembled this basic list of terms and definitions to familiarize yourself with! Good luck! Come back soon for more!

Address: A long string of letters and numbers (in the case of Bitcoin, 26 to 35 characters) that represents a destination for one or more payments. The network ensures all addresses are unique. Payments received to an address are visible in the public ledger.

Airdrop: Cryptocurrency distributed for free based on some particular criteria. For example, to receive some airdrops, you had to prove you owned Bitcoin; how much you received was based on how much Bitcoin you owned. In other cases, airdropped coins are “earned” through tasks such as sharing news or downloading an app. Crypto projects often use airdrops to generate interest in a new coin.

Altcoin: Any cryptocurrency that is not Bitcoin. That includes such top cryptocurrencies as Ethereum (ETH) and Cardano (ADA).

Atomic swap: A trade of one cryptocurrency for another made outside of an exchange and without the use of a trusted third party. Instead, it uses the “smart contract” feature built into most cryptos to ensure each party receives their coins (and can’t cheat their counterparty). The Lightning Network is a platform that supports atomic swaps.

Automated Market Maker (AMM): A system that provides liquidity for automatic crypto trading without the need for an order book or third party. Used by decentralized exchanges like Uniswap.

Bitcoin (BTC): The cryptocurrency that started it all launched in January 2009. Trades under the ticker BTC.

Bitcoin/Crypto ATM: A physical machine similar to a bank ATM where a person can exchange fiat money, such as U.S. dollars, for Bitcoin and sometimes other cryptocurrencies. Coin ATM Radar tracks the locations of crypto ATMs worldwide.

Bitcoin Cash: Created in 2017 by a hard fork of the original Bitcoin protocol. The main difference from the original Bitcoin is that it allows for larger-sized blocks in its blockchain (and thus for more transactions). Trades under the BCH ticker.

Bitcoin Core: The name for the full node software that runs the Bitcoin network. Has also become a nickname for the original Bitcoin in the wake of multiple hard forks that have created multiple versions of Bitcoin, including Bitcoin Cash (BCH), Bitcoin Gold (BTG), Bitcoin Diamond (BCD), and Bitcoin SV (BSV).

Bitcoin.com: A website run by Roger Ver that purports Bitcoin Cash is “the real Bitcoin” and sells both BCH and BTC.

Bitcoin.org: An open-source website created by Satoshi Nakamoto and maintained by the Bitcoin developers. It’s dedicated to raising awareness about Bitcoin as well as providing resources and information to general users.

Bitcoin ETF: A Bitcoin exchange-traded fund (ETF). A Bitcoin ETF makes it easier for both retail and institutional investors to invest in Bitcoin by providing a way to gain exposure to the asset without holding it. The first Bitcoin ETF – the ProShares Bitcoin Strategy Fund (NYSE: BITO) – launched in October 2021 and made for the second-most heavily traded debut ETF in history.

Block height: In a blockchain, as the blocks are created sequentially, each block is assigned a number according to its place in the chain. Events like forks can be scheduled to occur at a particular block height, such as 478,559.

Block reward: The amount of cryptocurrency a miner receives for “solving” a block. Often, as is the case with Bitcoin, the rewards are halved at regular intervals (“halving”).

Block size controversy: A fight within the Bitcoin community that raged from 2015 to 2017. One side wished to keep the size of the blocks at 1 megabyte; the other felt that the block size needed to increase to accommodate scaling of the network. The fight ended with the fork of Bitcoin Cash, giving each side the version of Bitcoin it desired. Later, the Bitcoin Cash group had its own split over further increases to the block size, creating Bitcoin SV (Satoshi’s Vision) in November 2018.

Blockchain: The public digital ledger of all of a cryptocurrency’s transactions, made up of individual blocks of data created either through mining or another process. It secures the transactions on the network and prevents double spending.

Blockchain-as-a-service: A cloud-based service, based on blockchain technology, offered by a company, usually to other companies. Both IBM and Microsoft have blockchain-as-a-service products.

Buterin, Vitalik: The Russian-Canadian computer programmer who created Ethereum. He remains one of the most prominent figures in the cryptocurrency community.

Central Bank Digital Currency (CBDC): A digital currency created and maintained by a central bank such as the U.S. Federal Reserve or the People’s Bank of China. These blockchain-based digital tokens would represent the fiat currency of that central bank. Most of the world’s central banks are studying CBDCs but none has yet launched one. Sometimes referred to as a Digital Fiat Currency (DFC).

CoinMarketCap.com: A website that tracks the value by market cap of all cryptocurrencies and tokens. Includes basic info on each coin, price charts, and the markets where it trades.

Coinbase: A major United States-based cryptocurrency exchange, largely considered the easiest way for beginners to buy crypto. It is a publicly traded company under the stock ticker COIN. (There are MANY exchanges to choose from and this is not an endorsement of Coinbase)

Cloud mining: The purchase or rental of a set amount of crypto mining power operated by another (typically a commercial enterprise such as Genesis Mining). In this way, a person can mine crypto without owning or operating any mining equipment themselves.

Cold storage/wallet: A cryptocurrency wallet not connected to the Internet. Includes hardware wallets and paper wallets. Recommended as a more secure way to store crypto.

Consensus: On a crypto network, a condition in which all the participants (nodes and miners) agree on the order of the blocks in the blockchain as well as the veracity of the transactions contained in those blocks. This the “normal” state of a properly functioning crypto network.

Cryptocurrency: A digital medium of exchange secured by strong cryptography.

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What is an NFT?

Phunky Ape Yacht Club NFT

An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.

Although they’ve been around since 2014, NFTs are gaining notoriety now because they are becoming an increasingly popular way to buy and sell digital artwork. A staggering $174 million has been spent on NFTs since November 2017.

NFTs are also generally one of a kind, or at least one of a very limited run, and have unique identifying codes. “Essentially, NFTs create digital scarcity,” says Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures.

This stands in stark contrast to most digital creations, which are almost always infinite in supply. Hypothetically, cutting off the supply should raise the value of a given asset, assuming it’s in demand.

But many NFTs, at least in these early days, have been digital creations that already exist in some form elsewhere, like iconic video clips from NBA games or securitized versions of digital art that’s already floating around on Instagram.

For instance, famous digital artist Mike Winklemann, better known as “Beeple” crafted a composite of 5,000 daily drawings to create perhaps the most famous NFT of the moment, “EVERYDAYS: The First 5000 Days,” which sold at Christie’s for a record-breaking $69.3 million.

Anyone can view the individual images—or even the entire collage of images online for free. So why are people willing to spend millions on something they could easily screenshot or download?

Because an NFT allows the buyer to own the original item. Not only that, it contains built-in authentication, which serves as proof of ownership. Collectors value those “digital bragging rights” almost more than the item itself.

How Is an NFT Different from Cryptocurrency?

NFT stands for non-fungible token. It’s generally built using the same kind of programming as cryptocurrency, like Bitcoin or Ethereum, but that’s where the similarity ends.

Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value—one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a trusted means of conducting transactions on the blockchain.

NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). One NBA Top Shot clip, for example, is not equal to EVERYDAYS simply because they’re both NFTs. (One NBA Top Shot clip isn’t even necessarily equal to another NBA Top Shot clip, for that matter.)

*Source Credit – Forbes

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The Bitcoin Whitepaper

Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work. The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of CPU power. As
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network, they’ll generate the longest chain and outpace attackers. The
network itself requires minimal structure. Messages are broadcast on a best effort
basis, and nodes can leave and rejoin the network at will, accepting the longest
proof-of-work chain as proof of what happened while they were gone.

Please follow this link for the complete whitepaper.