0
views

Tokenized Bitcoin on Ethereum Explained

Tokenized Bitcoin on Ethereum Explained

Tokenized Bitcoin is a way to use bitcoin on other blockchains.

But wait, isn’t Bitcoin great already? Indeed it is! It has a solid use case, and it already acts as a kind of public good. At the same time, its purposely limited features leave little room for further innovation.

What else could we do with Bitcoin? Some Bitcoiners say we shouldn’t do anything in particular, and that’s reasonable. Then again, others believe we should find ways to use Bitcoin on other blockchains. And this is where we arrive at tokenized BTC on Ethereum.

Why tokenize Bitcoin? Does this even make sense? How is tokenized Bitcoin created? Can you get your hands on tokenized BTC? Read more below if this interests you.

Introduction

Bitcoin is typically viewed as a “reserve asset” or store of value in the cryptocurrency space. As a result, it has the highest adoption, best liquidity, highest average trading volume, and remains the top crypto by market capitalization. In fact, some people believe that there isn’t even a need for any cryptocurrencies other than Bitcoin. Their argument is that Bitcoin could cater to all use cases that altcoins are attempting to.

However, blockchain technology is flourishing in many different segments. The Decentralized Finance (DeFi) movement aims to bring financial applications to the blockchain. These decentralized applications (DApps) run on public, permissionless networks and enable trustless financial transactions without the need for a central coordinating party. While the idea of DeFi is blockchain-agnostic, meaning it could happen on any smart contract platform, most of this activity is happening on Ethereum.

Bitcoin is the backbone of the cryptocurrency market, and yet, it can’t take advantage of developments that happen in other parts of the ecosystem. Some projects have been working on solving this problem.

Is there a way to use bitcoin for more than what it can do while keeping the Bitcoin network intact? Well, the growth of tokenized bitcoin on Ethereum suggests that there is a demand for it.

What is tokenized Bitcoin?

Before we start, there’s something we should clear to avoid confusion. If you’ve read our What is Bitcoin? article, you know that Bitcoin with an upper-case b is the network, and bitcoin with a lower-case b is the unit of account.

The idea behind tokenizing bitcoin is relatively simple. You lock BTC through some mechanism, mint tokens on another network, and use the BTC as a token on that network. Each token on the other network represents a specific amount of bitcoin. The peg between the two should be kept, and the process should be reversible. In other words, you can destroy these tokens, resulting in the “original” bitcoins getting unlocked again on the Bitcoin blockchain.

In the case of Ethereum, this means ERC-20 tokens that represent bitcoin. This allows users to make transactions on the Ethereum network denominated in bitcoin. This also makes bitcoins programmable – like any other token on Ethereum.

You can check the current total sum of bitcoin tokenized on Ethereum on btconethereum.com.

As of July 2020, there’s about 15,000 BTC tokenized on Ethereum. That may sound like a lot, but it’s negligible compared to the ~18.5 million that make up the circulating supply. However, this could be just the beginning.

It’s worth noting that sidechains and Layer 2 solutions like the Bitcoin Lightning Network or the Liquid Network also aim to tackle similar challenges. Fascinatingly, there’s more than ten times more bitcoin on Ethereum than there is in the Bitcoin Lightning Network.

Even so, the competition between these different solutions isn’t that straightforward – it’s not a zero-sum game. In fact, many believe that they complement rather than compete with each other. Tokenized projects could increase the options that bitcoin holders have, while projects without tokens improve the overall infrastructure. This could result in more integration within the space, which would benefit the entire industry.

So, this all sounds interesting, but what’s the point of it? Let’s explore why we would want to tokenize Bitcoin in the first place.

Why tokenize Bitcoin on Ethereum?

The Bitcoin design is simple on purpose. It has been designed to do a few things, and it does them very well. However, these properties come with inherent limitations.

While the most amount of value is in Bitcoin, it can’t benefit that much from the innovation happening in other segments of the digital currency industry. While you technically can run smart contracts on Bitcoin, it’s quite limited in scope compared to Ethereum or other smart contract platforms.

Tokenizing bitcoin on other chains could increase the utility of the network. How? Well, it could enable functionality that isn’t natively supported on Bitcoin. At the same time, the core functionality and the security model of Bitcoin remain intact. Additional advantages could be increased transaction speeds, fungibility, and privacy.

Here’s another potential reason. One of the greatest aspects of DeFi is the idea of composability. It means that since all these applications are running on the same public, open-source, permissionless base layer, they can seamlessly work with each other.

Bringing Bitcoin to this composable layer of financial building blocks is considered to be an exciting prospect by many. It could bring forth many new types of applications that use bitcoin and wouldn’t otherwise be possible.

How does tokenizing Bitcoin work?

There are many ways to tokenize Bitcoin on Ethereum and other blockchains. They all have various degrees of decentralization, different assumptions about trust and risks, and may maintain the peg differently.

The two main types can be defined as custodial and non-custodial. The first type involves a centralized custodian, and the tokens may also be minted by that party. This introduces counterparty risk, as the entity custodying the bitcoins has to be trusted (and it has to stay in business). On the other hand, this implementation may be considered more secure than the alternatives.

The other solutions are a bit different. There’s no trusted entity needed, as automated on-chain processes do the entire minting and burning process. The collateral assets are locked, and tokens are minted on the other chain through some on-chain machinations. The funds are locked on-chain until they are unlocked again when the tokens are destroyed. While this eliminates counterparty risks, it increases potential security risks. Why? Well, in this case, the burden of risk is entirely on the shoulders of the user. If a user or contract error happens that leads to loss of funds, they’re likely lost forever.

Tokenized Bitcoin examples

Custodial

These make up a significant portion of the currently tokenized bitcoin supply. The most amount of value locked is in Wrapped Bitcoin (WBTC). How does it work? Users send their bitcoin to a centralized custodian who keeps them in a multisignature cold storage wallet and mints WBTC tokens in return. It’s worth noting that this process requires proving their identity to comply with KYC/AML regulations. This method requires trust in the entity that is minting the token but also brings some security benefits.

Binance also has a tokenized version of BTC called BTCB. It’s a BEP-2 token issued on the Binance Chain. If you’d like to try it out, you can trade it on Binance DEX.

Non-custodial

Non-custodial solutions work completely on-chain, without any involvement from a centralized custodian. In simple terms, you could think of them similarly as Wrapped BTC. However, instead of a centralized custodian, it’s a smart contract or a virtual machine that’s keeping the funds safe and minting the tokens. Users can deposit their BTC and mint their tokenized bitcoin in a trustless and permissionless way.

Some of these systems will also require overcollateralization, meaning users have to deposit more value (collateral) than they aim to mint. They do this to prepare the system for black swan events and large market crashes. Even so, if the collateral value decreases significantly, these systems may not be able to handle it.

The most popular non-custodial implementation is renBTC. The bitcoins are sent to the Ren Virtual Machine (RenVM), which stores them using a network of decentralized nodes. It then mints ERC-20 tokens according to the amount of bitcoin sent.

Other notable examples are sBTC and iBTC, which are synthetic tokens collateralized by Synthetix Network Token (SNX) instead of bitcoin. What makes iBTC especially interesting is that it inversely tracks the price of Bitcoin. This makes it one of the few non-custodial ways to short Bitcoin.

It’s worth noting that these are highly experimental technologies. It’s no wonder that centralized, custodial solutions are more popular – they tend to be more secure. Naturally, there’s also a greater risk of bugs and user error, potentially leading to loss of funds. Even so, these could ultimately be the future of tokenization once the technology is improved.

Since these non-custodial solutions are governed by automated processes, using them is only recommended for advanced users. But, if you’d like to play around with these tokens without worrying about the minting process, you can buy and trade them on cryptocurrency exchanges.

Is this good for Bitcoin or Ethereum?

This is a difficult question to answer. Let’s try to consider both sides of the argument.

So, how can this be good for Bitcoin? Well, it arguably increases the utility of Bitcoin. While many will argue that Bitcoin doesn’t necessarily need more functionality, it could maybe use some. As we’ve discussed earlier, the benefits could be increased transaction speeds, fungibility, privacy, and decreased transaction costs. With the launch of ETH 2.0, we may expect transactions on Ethereum to be faster and cheaper. This could also help the case of tokenized bitcoin on Ethereum.

On the other hand, some argue that this is potentially dangerous for tokenized Bitcoin holders. Tokenizing BTC also entails giving up the strong security benefits of Bitcoin – some of its most sought-after properties.

For example, what happens if the tokenized bitcoins are stolen or lost due to a smart contract bug? There would potentially be no way to unlock the locked bitcoins on the Bitcoin blockchain.

One another thing to consider is fees. Some argue that if a high number of users start transacting tokenized BTC on the Ethereum blockchain, the transaction fees on the Bitcoin network could drop. Over the (very) long-term, Bitcoin is supposed to be supported by transaction fees only. If most of those flow into the Ethereum ecosystem, the security of the network could be compromised. However, this is a long way off and isn’t a pressing issue for a long time.

How can it be good for Ethereum? Well, if Ethereum captures a lot of Bitcoin’s value, that could increase the utility of Ethereum as a global network for value transfer. According to research by Etherscan, a considerable portion of the previously-mentioned 15,000 BTC sum is locked in the Ethereum DeFi ecosystem.

Tokenized bitcoin could greatly increase the utility of DeFi on Ethereum. How? There could be decentralized financial services based on tokenized bitcoin. BTC-based DEXes, lending marketplaces, liquidity pools, and whatever else exists in DeFi could all be denominated in BTC. The success of tokenized bitcoin could also encourage other types of assets to migrate to the Ethereum network.

Most of the projects are still in very early stages, and the technology behind them has a lot of room to improve. Still, there are certainly exciting developments to come on this front.

Closing thoughts

We’ve discussed what tokenized bitcoin is and what different implementations exist. The main driver behind tokenizing bitcoin as an ERC-20 token is to increase the utility of Bitcoin.

If Ethereum can capture a significant portion of Bitcoin transactions, there could be major implications for the future. Is the flippening a realistic scenario? What portion of the Bitcoin supply will be transacted on Ethereum in the future? This remains to be seen. However, the whole blockchain industry could benefit from building bridges between the two largest cryptocurrency networks.

0
views

What Is Shorting in the Financial Markets?

What Is Shorting in the Financial Markets?
There are countless ways to generate profits in the financial markets. Some traders will use technical analysis, while others will invest in companies and projects using fundamental analysis. As such, you, as a trader or investor, also have many different options to create a profitable trading strategy.
Show in full...
0
views

The Wyckoff Method Explained

The Wyckoff Method Explained
Данный торговый метод был разработан Ричардом Вайкоффом в начале 1930-х годов. Он состоит из ряда принципов и стратегий, изначально разработанных для трейдеров и инвесторов. Вайкофф посвятил значительную часть своего жизненного опыта для изучения поведений на рынке, и его работа до сих пор оказывает влияние на большую часть современного технического анализа (ТА). В настоящее время, метод Вайкоффа применяется ко всем видам финансовых рынков, хотя изначально он был ориентирован только на акции.
Show in full...
0
views

An Introduction to The Dow Theory

An Introduction to The Dow Theory
Essentially, the Dow Theory is a framework for technical analysis, which is based on the writings of Charles Dow concerning market theory. Dow was the founder and editor of the Wall Street Journal and the co-founder of Dow Jones & Company. As part of the company, he helped create the first stock index, known as the Dow Jones Transportation Index (DJT), followed by the Dow Jones Industrial Average (DJIA).
Show in full...
0
views

Об инвестировании, хаосе и аппроксимации рынка

Об инвестировании, хаосе и аппроксимации рынка
Данную статью я решил написать, потому что мне часто пишут в личных сообщениях с вопросами, насколько профессиональна ваша команда управляющих? Владеете ли вы инсайдерской информацией при торговле? Как поведет себя портфель на падающем рынке? и так далее. Ниже я постараюсь прояснить стратегии, и кратко объяснить почему они работают. На просторах Сети полным полно торговых стратегий, материалов, мануалов, готовых решений, сборок, обученных нейросетей и прочего добра, посвященного прогнозированию цен на криптовалютные и традиционные биржевые активы, пахнущего быстрыми и легкими доходами с минимумом усилий. И хоть пишут их разные люди, с разными подходами, на разных платформах и с разными парадигмами, у них всех есть один неизменный общий атрибут — они не работают. Другими словами с их помощью невозможно со стопроцентной вероятностью спрогнозировать куда пойдет график в том или ином отрезке времени в будущем.
Show in full...
0
views

What Is Livepeer (LPT)?

What Is Livepeer (LPT)?
Livepeer is a decentralized video protocol built on the Ethereum blockchain. It was designed for anyone to seamlessly integrate video content into applications in a decentralized manner and at a fraction of the cost of traditional solutions. Decentralization of video processing is accomplished by distributing the transcoding process to a network of node operators. Transcoding is an essential step in ensuring smooth delivery of video content to end users. It involves taking raw video files and converting them to the optimal state for each end user, based on factors such as device screen size or internet connection.
Show in full...
0
views

Что делать с долларом сегодня

Что делать с долларом сегодня
Сегодня в России для россиян доллар становится очень токсичной валютой. То есть им (долларом) тяжело владеть, если ты владеешь им, то на тебя накладывают различные комиссии, вы наверное уже в курсе, что есть комиссия за хранение валюты на брокерских счетах, на банковских счетах, блокируют swift переводы и так далее. В чём главная опасность? И почему банки сейчас так выжимают людей из доллара? Главная опасность в возможной блокировке российских банков, а точнее корреспондентских счетов российских банков в иностранных банках. Что это такое? В чём суть?
Show in full...
0
views

What Are Nodes?

What Are Nodes?
The definition of a node may vary according to the context. When it comes to computer or telecommunication networks, nodes may act either as a redistribution point or as a communication endpoint. Usually, a node consists of a physical network device, but there are some cases where virtual nodes are used.
Show in full...
0
views

Coin Mixing and CoinJoins Explained

Coin Mixing and CoinJoins Explained
Bitcoin is often referred to as digital cash, but this is a questionable comparison. If Alice pays Bob ten dollars in cash, Bob has no idea where the money came from. If he later goes on to give it to Carol, she will be unable to deduce that Alice was once in possession of it. Bitcoin is different because of its inherent public nature. The history of a given coin (more precisely, an unspent transaction output or UTXO) can be trivially observed by anyone. It’s a bit like writing the transaction amount and names of participants on a bill every time it’s used.
Show in full...
0
views

What Is Anti-Money Laundering (AML)?

What Is Anti-Money Laundering (AML)?
AML regulations attempt to stop the illegal laundering of illicit funds. Individual governments and multinational organizations like the FATF legislate against money laundering activities. Money laundering takes “dirty” money and turns it into clean money. This can be done by disguising the origins of the funds, mixing them with legitimate transactions, or investing them into legal assets.
Show in full...
0
views

What Are Crypto Cards and How Do They Work?

What Are Crypto Cards and How Do They Work?
A typical crypto card lets you earn crypto rewards or instantly convert your crypto to fiat currency to pay for goods and services. Both Mastercard and Visa issue crypto cards, meaning you can use your crypto in millions of locations globally. A prepaid crypto card is similar to a debit card in that it has to be pre-loaded with crypto to spend. You can get a crypto card from a licensed issuer such as a crypto exchange or bank. However, crypto cards aren't without risk. Your funds stored on the card can still lose their market value, and any transactions you make with your card are likely to be taxable.
Show in full...
0
views

What Is Play-to-Earn and How to Cash Out?

What Is Play-to-Earn and How to Cash Out?
Play-to-earn games allow users to farm or collect crypto and NFTs that can be sold on the market. By playing the game regularly, each player can earn more items or tokens to sell and generate an income. Some players have even begun to supplement or replace their salaries playing these blockchain games. However, such activity involves risk, as you typically need to put up an initial investment to purchase characters and items to play the game. Blockchain helps guarantee the collectibility of these items and create working digital economies. Blockchain technology and NFTs allowed for the creation of digital items that are impossible to duplicate. This created the concept of digital scarcity.
Show in full...
0
views

What Is Uniswap and How Does It Work?

What Is Uniswap and How Does It Work?
Uniswap is a set of computer programs that run on the Ethereum blockchain and allow for decentralized token swaps. It works with the help of unicorns (as illustrated by their logo). Traders can exchange Ethereum tokens on Uniswap without having to trust anyone with their funds. Meanwhile, anyone can lend their crypto to special reserves called liquidity pools. In exchange for providing money to these pools, they earn fees. How do these magical unicorns convert one token to the other? What do you need to use Uniswap? Let’s read on.
Show in full...
0
views

Mining Pools Explained

Mining Pools Explained
Mining is integral to the security of Proof of Work blockchains. By computing hashes with certain properties, participants are able to secure cryptocurrency networks without the need for a central authority. When Bitcoin first launched in 2009, anyone with a regular PC could compete with other miners to guess a valid hash for the next block. That’s because the mining difficulty was low. There wasn’t much hash rate on the network. As such, you didn’t need specialized hardware to add new blocks to the blockchain.
Show in full...
0
views

Who Is Satoshi Nakamoto?

Who Is Satoshi Nakamoto?
Satoshi Nakamoto is the pseudonym behind the development of Bitcoin and the authorship of the original Bitcoin whitepaper. The question “who is Satoshi Nakamoto?” has led to speculation of their true identity as well as people falsely claiming they are Satoshi Nakamoto. The creator of Bitcoin has been clouded in mystery for more than a decade. However, it’s clear that Satoshi still owns bitcoins since their public keys were traced from the genesis block, which Satoshi mined.
Show in full...
0
views

What Is Cryptocurrency Mining?

What Is Cryptocurrency Mining?
Cryptocurrency mining refers to the process of verifying and validating blockchain transactions. It’s also the process that creates new units of cryptocurrencies. The work done by miners requires intensive computational resources, but it’s what keeps a blockchain network secure. Honest and successful miners are rewarded for their work with newly created cryptocurrencies plus transaction fees.
Show in full...
0
views

A Quick Guide to Binance Dual Investment

A Quick Guide to Binance Dual Investment
We all know that to get a return on an investment, we need to buy low and sell high. Investing in cryptocurrency is no different. Binance Dual Investment provides a great way to seize Buy Low and Sell High opportunities while also providing you with additional returns. Let’s dive into how it works and exactly how you can get started.
Show in full...
0
views

Hybrid PoW/PoS Consensus Explained

Hybrid PoW/PoS Consensus Explained
A blockchain’s consensus mechanism serves to ensure that there is agreement among participants on the current state of the blockchain. The consensus mechanism determines who is able to add new blocks of transactions, and one of its primary aims is to ensure that the chain is not re-written.
Show in full...
0
views

Your Guide to Binance Earn

Your Guide to Binance Earn
Not interested in trading but still looking to increase your crypto holdings? Is the 0.05% interest your local bank offers on your savings account not exciting enough? Well, you’ll find alternative choices within the Binance Earn product suite. Binance Earn is your crypto savings account. Here, you’ll find a great variety of options for earning passive income with your crypto holdings.
Show in full...
0
views

Delegated Proof of Stake Explained

Delegated Proof of Stake Explained
The Delegated Proof of Stake (DPoS) consensus algorithm is considered by many as a more efficient and democratic version of the preceding PoS mechanism. Both PoS and DPoS are used as an alternative to the Proof of Work consensus algorithm, since a PoW system requires, by design, lots of external resources. The Proof of Work algorithm makes use of a large amount of computational work in order to secure an immutable, decentralized and transparent distributed ledger. Contrarily, PoS and DPoS require fewer resources and are, by design, more sustainable and eco-friendly. To understand how Delegated Proof of Stake works, one must first grasp the basics of the Proof of Work and Proof of Stake algorithms that preceded it.
Show in full...
0
views

Proof of Burn Explained

Proof of Burn Explained
While most blockchain systems either make use of a Proof of Work (PoW) or a Proof of Stake (PoS) consensus algorithm, the Proof of Burn (PoB) is being tested as a possible alternative to those.
Show in full...
0
views

Proof of Authority Explained

Proof of Authority Explained
The cryptocurrency space has changed a lot since the first blockchain transaction on the Bitcoin network. Along with the well-known Proof of Work and Proof of Stake algorithms, other consensus mechanisms were proposed, with alternative methods for reaching consensus within a blockchain system.
Show in full...
0
views

What Is a DoS Attack?

What Is a DoS Attack?
In short, a DoS attack (or Denial-of-Service attack) is a method used to disrupt legitimate users' access to a target network or web resource. Typically, this is accomplished by overloading the target (often a web server) with a massive amount of traffic - or by sending malicious requests that cause the target resource to malfunction or crash entirely.
Show in full...
0
views

What Is a 51% Attack?

What Is a 51% Attack?
Before diving into the 51% attack, it is crucial to have a good understanding of mining and blockchain-based systems. One of the key strengths of Bitcoin and its underlying blockchain technology is the distributed nature of building and verifying data. The decentralized work of the nodes ensures that the protocol rules are being followed and that all network participants agree on the current state of the blockchain. This means that the majority of nodes need to regularly reach consensus in regards to the process of mining, to the version of the software being used, to the validity of transactions, and so forth.
Show in full...
0
views

Delayed Proof of Work Explained

Delayed Proof of Work Explained
Delayed Proof of Work (dPoW) is a security mechanism designed by the Komodo project. It is basically a modified version of the Proof of Work (PoW) consensus algorithm that makes use of Bitcoin blockchain’s hashpower as a way to enhance network security. By using dPoW, Komodo developers are able to secure not only their own network but also any third-party chain that ends up joining the Komodo ecosystem in the future. In fact, dPoW can be implemented for any project that develops an independent blockchain using a UTXO model.
Show in full...
0
views

What Is a Blockchain Consensus Algorithm?

What Is a Blockchain Consensus Algorithm?
A consensus algorithm is a mechanism that allows users or machines to coordinate in a distributed setting. It needs to ensure that all agents in the system can agree on a single source of truth, even if some agents fail. In other words, the system must be fault-tolerant (see also - Byzantine Fault Tolerance Explained). In a centralized setup, a single entity has power over the system. In most cases, they can make changes as they please – there isn’t some complex governance system for reaching consensus amongst many administrators.
Show in full...
0
views

5 BSC Metaverse Projects You Should Know

5 BSC Metaverse Projects You Should Know
The metaverse is an online, immersive space where users can work, play, and socialize in a 3D environment. The metaverse is still developing, but blockchain technology already plays a significant role. BNB Smart Chain (BSC) is the home to many metaverse projects experimenting with play-to-earn blockchain games and community sandboxes.decentral.games lets users play and run their own casino through governance mechanisms. Cyber Dragon and Alien Worlds both provide an RPG-like experience where players have their own character, missions, and loot. TopGoal is also gaming-related but focuses on the collectability of Non-Fungible Tokens (NFTs) to represent sports stars like trading cards.
Show in full...
0
views

A Beginner's Guide to Earning Passive Income With Crypto

A Beginner's Guide to Earning Passive Income With Crypto
Trading or investing in projects is one way to make money in the blockchain industry. However, that typically requires detailed research and a substantial investment of time – but it still won’t guarantee a reliable source of income. Even the best investors can experience prolonged periods of loss, and one of the ways to survive them is to have alternative sources of income.
Show in full...
0
views

What Is Crypto Lending and How Does It Work?

What Is Crypto Lending and How Does It Work?
Crypto lending lets users borrow and lend cryptocurrencies for a fee or interest. You can instantly get a loan and start investing just by providing some collateral. This could be through a DeFi lending DApp or a cryptocurrency exchange. When your collateral falls below a certain value, you will need to top it up to the required level to avoid liquidation. When you return your loan plus a fee, your capital is unlocked.
Show in full...
0
views

A Beginner's Guide to Decentralized Finance (DeFi)

A Beginner's Guide to Decentralized Finance (DeFi)
DeFi lets users access crypto financial services with just no more than a wallet with some crypto. A range of DApps facilitates lending, liquidity provision, swaps, staking, and more across many blockchains. While Ethereum was DeFi's original home, most blockchains with smart contract capabilities now host DeFi DApps. Smart contracts are essential to the services DeFi offers, which include staking, investing, lending, harvesting, and more.
Show in full...
0
views

5 NFT Projects You Should Know

5 NFT Projects You Should Know
The interest in NFTs has exploded. While many NFT projects had a small community of enthusiasts since their early existence, 2021 has brought forth a bit of an NFT bubble. Many thought DeFi would bring mainstream adoption to the crypto space. However, it seems like the value proposition of NFTs is much easier to grasp for people not involved with blockchain technology. As such, some NFT projects have even entered the mainstream. But which ones are they?
Show in full...
0
views

Top 3 NFT Projects on Binance Smart Chain

Top 3 NFT Projects on Binance Smart Chain
The demand for non-fungible tokens (NFTs) keeps growing on Binance Smart Chain (BSC). The blockchain’s speed and low transaction fees make it very attractive for both users and developers. On BSC, Battle Pets, PancakeSwap, and BakerySwap have all pushed further the limits of what an NFT can do. Both Battle Pets and BakerySwap combine collectibles with Decentralized Finance (DeFi) staking for their tokens. PancakeSwap is also experimenting with NFTs that merge collectability, financial utility, and gamification.
Show in full...
0
views

Top 7 NFT Use Cases

Top 7 NFT Use Cases
Massive interest in non-fungible tokens has led to a boom in crypto-collectibles and NFT art. These are two of the most prominent use cases in the DeFi ecosystem, but they aren’t the only applications. Scarcity and uniqueness make non-fungible tokens a good match for real-world assets, logistics, music royalties, and more. As NFTs mature, we can expect to see further adoption of more experimental use cases.
Show in full...
0
views

What Are NFT Games and How Do They Work?

What Are NFT Games and How Do They Work?
NFTs are unique digital collectibles on the blockchain. This feature makes them suitable to use in games as representations as characters, consumables, and other tradeable items. NFT games have become popular in the Game-fi world as a way to earn income. You can sell your in-game NFTs to other collectors and players and even earn tokens with play-to-earn models.
Show in full...
0
views

What Is the Metaverse?

What Is the Metaverse?
The metaverse is a concept of a persistent, online, 3D universe that combines multiple different virtual spaces. You can think of it as a future iteration of the internet. The metaverse will allow users to work, meet, game, and socialize together in these 3D spaces.
Show in full...
0
views

What Are CryptoPunks?

What Are CryptoPunks?
CryptoPunks are collectible pieces of crypto art, represented by NFTs on the Ethereum blockchain. There are 10,000 small, 8-bit-style punks, all with unique features. As one of the first famous NFT projects, they inspired a lot of crypto artists and even the development of the ERC-721 token standard for digital collectibles. The project became more popular in 2021 after some CryptoPunks were sold for millions of dollars, making them some of the most expensive NFTs.
Show in full...
0
views

What Is an Automated Market Maker (AMM)?

What Is an Automated Market Maker (AMM)?
You could think of an automated market maker as a robot that’s always willing to quote you a price between two assets. Some use a simple formula like Uniswap, while Curve, Balancer and others use more complicated ones.
Show in full...
0
views

A Guide to Crypto Collectibles and Non-fungible Tokens (NFTs)

A Guide to Crypto Collectibles and Non-fungible Tokens (NFTs)
The creation of Bitcoin introduced the concept of trustless, digital scarcity. Before it, the cost of digitally copying something was next to nothing. With the advent of blockchain technology, programmable digital scarcity has become possible – letting us map the digital world to the real world. Non-fungible tokens (NFTs), often referred to as crypto collectibles, expand this idea. Unlike cryptocurrencies, where each token is equal, non-fungible tokens are unique and limited in quantity.
Show in full...
0
views

Decentralized Autonomous Organizations (DAOs) Explained

Decentralized Autonomous Organizations (DAOs) Explained
Blockchains are already radically transforming our financial system. However, properties such as trustlessness and immutability aren’t only useful in monetary applications. Another potential candidate ripe for disruption by this technology is governance. Blockchains could enable entirely new types of organizations that can run autonomously without the need for coordination by a central entity. This article will give an introduction to what these organizations might look like.
Show in full...
0
views

A Beginner's Introduction to Cryptoeconomics

A Beginner's Introduction to Cryptoeconomics
In simple terms, cryptoeconomics provides a way to coordinate the behavior of network participants by combining cryptography with economics. More specifically, cryptoeconomics is an area of computer science that attempts to solve participant coordination problems in digital ecosystems through cryptography and economic incentives.
Show in full...
0
views

Pyramid and Ponzi Schemes

Pyramid and Ponzi Schemes
Most individuals that invest in Bitcoin – or that participate in Initial Coin Offering (ICO) events – are usually concerned about two things. First, the Return of Investment (ROI), which represents the profits they will eventually make from the initial investment. Then, there is a second concern, which is related to the amount of risk involved with the investment. When the risks are too high, investors are more likely to lose their initial investment (in parts or completely), which would result in a negative ROI.
Show in full...
0
views

What is Public Key Cryptography?

What is Public Key Cryptography?
Public key cryptography (PKC), also known as asymmetric cryptography, is a framework that uses both a private and a public key, as opposed to the single key used in symmetric cryptography. The use of key pairs gives PKC a unique set of characteristics and capabilities that can be utilized to solve challenges inherent in other cryptographic techniques. This form of cryptography has become an important element of modern computer security, as well as a critical component of the growing cryptocurrency ecosystem.
Show in full...
0
views

History of Cryptography

History of Cryptography
Cryptography, the science of writing codes and ciphers for secure communication, is one of the most important elements that goes into making modern cryptocurrencies and blockchains possible. The cryptographic techniques used today, however, are the result of an incredibly long history of development. Since ancient times, people have used cryptography to transmit information in a secure manner. Following is the fascinating history of cryptography that has led up to the advanced and sophisticated methods used for modern digital encryption.
Show in full...
0
views

What Is Axie Infinity (AXS)?

What Is Axie Infinity (AXS)?
It’s 2021, and that means you can earn money by playing games and breeding virtual pets. An easy way to think of Axie Infinity is to imagine a blockchain game that combines Pokémon, CryptoKitties, and card game elements.
Show in full...
0
views

Is Bitcoin a Store of Value?

When you think of a safe-haven asset, precious metals like gold or silver probably come to mind. They’re investments that individuals flock to as hedges against turmoil in traditional markets. The debate over whether Bitcoin follows in the footsteps of these assets rages on. In this article, we’ll look at some of the main arguments for and against Bitcoin being a store of value.
When you think of a safe-haven asset, precious metals like gold or silver probably come to mind. They’re investments that individuals flock to as hedges against turmoil in traditional markets. The debate over whether Bitcoin follows in the footsteps of these assets rages on. In this article, we’ll look at some of the main arguments for and against Bitcoin being a store of value.
Show in full...
0
views

What Is VeChain (VET)?

What Is VeChain (VET)?
VeChain provides blockchain solutions for businesses around the globe. With plenty of existing industry blockchain applications from supply chain management to anti-counterfeiting and carbon credits, their systems have been proven in the real world. VET is the coin that underpins VeChain, where VTHO is the gas token that’s used for transactions on the VeChainThor blockchain (like Ethereum’s gas).
Show in full...
0
views

Приготовьтесь! Биткойн будут сливать, но это не точно

Приготовьтесь! Биткойн будут сливать, но это не точно
Только что в Twitter наткнулся на пост от Jacob Canfield, якобы есть инсайдерская информация, о том что Bitcoin планируют сливать, дабы выбить некоторых конкурентов, потом обратно откупить, подняв стоимость до $70к.
Show in full...
0
views

More about the Crypto Fans club

More about the Crypto Fans club
Now I will tell you what our club is, how it works and what advantages it has. A minimum of water, a maximum of specifics. The club is a kind of trust fund, which consists of a team of Asset Managers, on the one hand, who invest in the crypto market, and Investors, on the other. I will not describe in this article what cryptocurrency is, why it is growing, and what are its advantages, this topic is worthy of a separate article. You can google all this, or go to coinmarketcap.com and see how the value of a particular cryptocurrency has grown at least this year, and doubts about investing in cryptocurrency should disappear.
Show in full...
0
views

What Is The Sandbox (SAND)?

What Is The Sandbox (SAND)?
The Sandbox is a play-to-earn game that combines blockchain technology, DeFi, and NFTs in a 3D metaverse. Its virtual world allows players to create and customize their games and digital assets with free design tools. The virtual goods created can then be monetized as NFTs and sold for SAND tokens on The Sandbox Marketplace.
Show in full...
0
views

What Is Tether (USDT)?

What Is Tether (USDT)?
Tether (USDT) is one of the most popular stablecoins out there. It was designed to hold a one-to-one value with the US dollar. The coin exists on many different blockchains and has experienced rising trading volumes and improved liquidity over the past few years.
Show in full...
0
views

What Is Solana (SOL)?

What Is Solana (SOL)?
Solana is a blockchain network focused on fast transactions and high throughput. It uses a unique method of ordering transactions to improve its speed. Users can pay their transaction fees and interact with smart contracts with SOL, the network’s native cryptocurrency.
Show in full...
0
views

What Is Polkadot (DOT)?

What Is Polkadot (DOT)?
Polkadot positions itself as the next-generation blockchain protocol, capable of connecting multiple specialized chains into one universal network. With a strong focus on building infrastructure for Web 3.0 – and founded by the Web3 Foundation – Polkadot aims to disrupt Internet monopolies and empower individual users.
Show in full...
0
views

What Is Harmony (ONE)?

What Is Harmony (ONE)?
Harmony is a layer-1 blockchain using sharding and Effective Proof of Stake to achieve scalability, security, and decentralization. The network was launched in 2019 and features trustless cross-chain bridges and four shards, which process transactions in parallel. Effective Proof of Stake encourages decentralization of validators, and sharding shares the network's load among validators, delegators, and users.
Show in full...
0
views

What Is Filecoin (FIL)?

What Is Filecoin (FIL)?
FFilecoin is a decentralized, peer-to-peer digital storage marketplace using blockchain technology. It’s built on top of InterPlanetary File System (IPFS) and allows users to rent unused hard disk space and earn FIL tokens in return. Let’s see how Filecoin aims to shake up the online storage space.
Show in full...
0
views

What Is Decentraland (MANA)?

What Is Decentraland (MANA)?
Decentraland is a virtual world and community based on blockchain technology. Users develop and own plots of land, artwork, and Non-Fungible Tokens (NFT). Members also participate in the platform’s Decentralized Autonomous Organization (DAO).
Show in full...
0
views

What Is Ethereum 2.0 And Why Does It Matter?

What Is Ethereum 2.0 And Why Does It Matter?
Ethereum 2.0 is a long-awaited upgrade to the Ethereum (ETH) network that’s promised significant improvements to the functionality and experience of the network as a whole. Some of the more notable upgrades include a shift to Proof of Stake (PoS), shard chains, and a new blockchain at the core called the beacon chain. All of this and more is expected to be phased in through a carefully planned roadmap.
Show in full...
0
views

What Is BUSD?

What Is BUSD?
BUSD is a regulated, fiat-backed stablecoin pegged to the U.S. dollar. For every unit of BUSD, there is one U.S. dollar held in reserve. In other words, the supply of BUSD is pegged to the U.S. dollar at a 1:1 ratio. Holders can swap their tokens for fiat and vice versa. Paxos, the token’s issuer, releases monthly attestations of BUSD’s reserves.
Show in full...
0
views

What Is Avalanche (AVAX)?

What Is Avalanche (AVAX)?
Avalanche attempts to improve scalability without compromising speed or decentralization. Three blockchains make up its core platform - the Exchange Chain (X-Chain), Contract Chain (C-Chain), and Platform Chain (P-Chain). The X-Chain is used for creating and trading assets. The C-Chain is for smart contract creation. The P-Chain is for coordinating validators and Subnets.
Show in full...
0
views

What Are Wrapped Tokens?

What Are Wrapped Tokens?
A wrapped token is a cryptocurrency token pegged to the value of another crypto. It’s called a wrapped token because the original asset is put in a wrapper, a kind of digital vault that allows the wrapped version to be created on another blockchain.
Show in full...
0
views

What Is a Stablecoin?

What Is a Stablecoin?
A stablecoin is a cryptoasset pegged to another asset, such as fiat currencies or precious metals. Stablecoins are designed to maintain a relatively stable price so that users can avoid the volatility risks common in the crypto markets.
Show in full...
0
views

Tokenized Bitcoin on Ethereum Explained

Tokenized Bitcoin on Ethereum Explained
Tokenized Bitcoin is a way to use bitcoin on other blockchains. But wait, isn’t Bitcoin great already? Indeed it is! It has a solid use case, and it already acts as a kind of public good. At the same time, its purposely limited features leave little room for further innovation.
Show in full...
0
views

How to Use WalletConnect

WalletConnect is a protocol used by many crypto wallets that allows you to easily connect with the many DApps of decentralized finance (DeFi). Simply find the DApp you want to interact with, connect with a QR code or deep link, and you’re good to go. Always remember to disconnect at the end of any session for maximum security
WalletConnect is a protocol used by many crypto wallets that allows you to easily connect with the many DApps of decentralized finance (DeFi). Simply find the DApp you want to interact with, connect with a QR code or deep link, and you’re good to go. Always remember to disconnect at the end of any session for maximum security
Show in full...
0
views

What Is Ethereum? (ETH)

Ethereum is a decentralized computing platform. You can think of it like a laptop or PC, but it doesn't run on a single device. Instead, it simultaneously runs on thousands of machines around the world, meaning that it has no owner.
Ethereum is a decentralized computing platform. You can think of it like a laptop or PC, but it doesn't run on a single device. Instead, it simultaneously runs on thousands of machines around the world, meaning that it has no owner.
Show in full...
0
views

What Is Bitcoin (BTC)

Bitcoin is a digital form of cash. But unlike the fiat currencies you’re used to, there is no central bank controlling it.
Bitcoin is a digital form of cash. But unlike the fiat currencies you’re used to, there is no central bank controlling it. Instead, the financial system in Bitcoin is run by thousands of computers distributed around the world. Anyone can participate in the ecosystem by downloading open-source software.
Show in full...
0
views

How to Use MetaMask

If you’re interested in the Ethereum ecosystem, you need an application like MetaMask. Far more than a simple wallet, it allows you to interact with websites that integrate Ethereum.
If you’re interested in the Ethereum ecosystem, you need an application like MetaMask. Far more than a simple wallet, it allows you to interact with websites that integrate Ethereum.
Show in full...
0
views

A Beginner's Guide to Bitcoin's Lightning Network

A Beginner's Guide to Bitcoin's Lightning Network
Cryptocurrencies have some pretty unique properties. They can’t be hacked or shut down easily, and anyone can use them to transmit value around the globe without a third party’s intervention. To ensure that these features remain, significant trade-offs must be made. Since many nodes are responsible for running a cryptocurrency network, throughput is limited. As a result, the number of transactions per second (TPS) a blockchain network can process is relatively low for a technology that aims to be adopted by the masses.
Show in full...
0
views

What is Fundamental Analysis (FA)?

What is Fundamental Analysis (FA)?
When it comes to trading – whether you’re dealing with century-old stocks or nascent cryptocurrencies – there’s no exact science involved. Or, if there is, Wall Street’s top players ensure that the formula remains a well-kept secret.
Show in full...
0
views

History of Blockchain

The underlying technology behind cryptocurrencies is the blockchain. It allows every client in the network to reach consensus without ever having to trust each other.
The underlying technology behind cryptocurrencies is the blockchain. It allows every client in the network to reach consensus without ever having to trust each other.
Show in full...
0
views

How Does Blockchain Work?

In short, a blockchain is a list of data records that works as a decentralized digital ledger. The data is organized into blocks, which are chronologically arranged and secured by cryptography.
In short, a blockchain is a list of data records that works as a decentralized digital ledger. The data is organized into blocks, which are chronologically arranged and secured by cryptography.
Show in full...
0
views

What Is MakerDAO (DAI)?

What Is MakerDAO (DAI)?
MakerDAO is a Decentralized Finance (DeFi) project with a crypto-collateralized, stablecoin DAI pegged to the US dollar. Its community manages the coin via a Decentralized Autonomous Organization (DAO). Users generate DAI by locking cryptocurrency in a Maker Vault at a certain Liquidation Ratio. For example, a 125% Liquidation Ratio requires $1.25 of crypto collateral value for each $1 of DAI.
Show in full...
0
views

What Is a Crypto Wallet?

In short, a crypto wallet is a tool that you can use to interact with a blockchain network. There are various crypto wallet types, which can be divided into three groups - software, hardware, and paper wallets. Depending on their working mechanisms, they may also be referred to as hot or cold wallets.
In short, a crypto wallet is a tool that you can use to interact with a blockchain network. There are various crypto wallet types, which can be divided into three groups - software, hardware, and paper wallets. Depending on their working mechanisms, they may also be referred to as hot or cold wallets.
Show in full...
0
views

What Is Tulip Mania?

The Tulip Mania is considered by many as the first recorded story of a financial bubble, which supposedly occurred in the 1600s. Before discussing if the Tulip Mania was really a financial bubble or not, let’s go through the most common narrative that considers it to be a real bubble.
The Tulip Mania is considered by many as the first recorded story of a financial bubble, which supposedly occurred in the 1600s. Before discussing if the Tulip Mania was really a financial bubble or not, let’s go through the most common narrative that considers it to be a real bubble.
Show in full...
0
views

What Is Technical Analysis?

What Is Technical Analysis?
Technical analysis (TA), often referred to as charting, is a type of analysis that aims to predict future market behavior based on previous price action and volume data. The TA approach is extensively applied to stocks and other assets in traditional financial markets, but it is also an integral component of trading digital currencies in the cryptocurrency market.
Show in full...
0
views

What Is Staking?

What Is Staking?
You may think of staking as a less resource-intensive alternative to mining. It involves holding funds in a cryptocurrency wallet to support the security and operations of a blockchain network. Simply put, staking is the act of locking cryptocurrencies to receive rewards.
Show in full...
0
views

What Is Phishing?

What Is Phishing?
Phishing is a type of cyber attack where a malicious actor poses as a reputable entity or business in order to deceive people and collect their sensitive information - such as credit card details, usernames, passwords, and so forth. Since phishing involves psychological manipulation and relies on human failures (instead of hardware or software) it is considered a type of social engineering attack.
Show in full...
0
views

What Is Inflation?

Ever hear your grandmother talk about how everything was cheaper when she was younger? That’s because of inflation. It’s caused by irregularities in supply and demand for products and services, leading to an increase in prices.
Ever hear your grandmother talk about how everything was cheaper when she was younger? That’s because of inflation. It’s caused by irregularities in supply and demand for products and services, leading to an increase in prices.
Show in full...
0
views

What Is Hyperinflation?

All economies experience some level of inflation, which occurs when the average price of goods increases, as the purchasing power of that currency decreases. Usually, governments and financial institutions work together to ensure inflation occurs at a smooth and gradual rate. However, there have been many instances in history where inflation rates have accelerated at such an unprecedented degree that it caused the real value of that country's currency to be diminished in alarming proportions. This accelerated rate of inflation is what we call hyperinflation.
All economies experience some level of inflation, which occurs when the average price of goods increases, as the purchasing power of that currency decreases. Usually, governments and financial institutions work together to ensure inflation occurs at a smooth and gradual rate. However, there have been many instances in history where inflation rates have accelerated at such an unprecedented degree that it caused the real value of that country's currency to be diminished in alarming proportions. This accelerated rate of inflation is what we call hyperinflation.
Show in full...
0
views

What Is Hashing?

What Is Hashing?
Hashing refers to the process of generating a fixed-size output from an input of variable size. This is done through the use of mathematical formulas known as hash functions (implemented as hashing algorithms).
Show in full...
0
views

What Is Fiat Currency?

Simply put, fiat currency is legal tender that derives its value from its issuing government rather than a physical good or commodity. The strength of the government that establishes the value of fiat currency is key in this type of money. Most countries around the world use the fiat currency system to purchase goods and services, invest, and save. Fiat currency replaced the gold standard and other commodity-based systems in establishing the value of legal tender.
Simply put, fiat currency is legal tender that derives its value from its issuing government rather than a physical good or commodity. The strength of the government that establishes the value of fiat currency is key in this type of money. Most countries around the world use the fiat currency system to purchase goods and services, invest, and save. Fiat currency replaced the gold standard and other commodity-based systems in establishing the value of legal tender.
Show in full...
0
views

What Is Cryptojacking?

What Is Cryptojacking?
Cryptojacking is a malicious activity, in which an infected device is used to secretly mine for cryptocurrencies. In order to do so, the attacker makes use of the victims’ processing power and bandwidth (in most cases this is done without their awareness or consent).
Show in full...
0
views

What Is Arbitrage Trading?

What Is Arbitrage Trading?
Arbitrage trading is a relatively low-risk trading strategy that takes advantage of price differences across markets. Most of the time, this involves buying and selling the same asset (like Bitcoin) on different exchanges. Since the price of Bitcoin should, in theory, be equal on Binance and on another exchange, any difference between the two is likely an arbitrage opportunity.
Show in full...
0
views

What Is a Multisig Wallet?

What Is a Multisig Wallet?
Multisig stands for multi-signature, which is a specific type of digital signature that makes it possible for two or more users to sign documents as a group. Therefore, a multi-signature is produced through the combination of multiple unique signatures. Multisig technology has been extant within the world of cryptocurrencies, but the principle is one that existed long before the creation of Bitcoin.
Show in full...
0
views

What Is a Dusting Attack?

What Is a Dusting Attack?
A dusting attack refers to a relatively new kind of malicious activity where hackers and scammers try and break the privacy of Bitcoin and cryptocurrency users by sending tiny amounts of coins to their wallets. The transactional activity of these wallets is then tracked down by the attackers, who perform a combined analysis of different addresses to deanonymize the person or company behind each wallet.
Show in full...
0
views

What Is Web 3.0 and Why Does It Matter?

What Is Web 3.0 and Why Does It Matter?
The Internet is a constantly evolving technology that continues to innovate. So far, we’ve experienced Web 1.0 and 2.0, and there’s much discussion of what to expect from Web 3.0. Web 1.0 provided a static experience for users without the ability to create the content-rich sites we have today. Web 2.0 brought us together with social media and dynamic websites, but at the cost of centralization.
Show in full...