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WHAT IS BLOCKCHAIN?
Blockchain technology is most widely known for its use in Bitcoin (BTC) and other cryptocurrencies. It is a decentralized, distributed digital ledger that records information pertaining to transactions between two parties in an immutable and permanent way. A blockchain consists of blocks of data linked together by cryptography, which makes it virtually impossible to tamper with or alter any existing transaction. It’s distributed nature also provides additional security as the data is not stored on a single server but rather spread out across multiple computers participating in the network. This means that no one person can control or manipulate the blockchain. As such, blockchain technology has been used for various applications beyond Bitcoin, such as smart contracts blockchains like Solana or Ethereum, and other secure financial transactions. Furthermore, many industries are beginning to explore ways to leverage its immutability for data storage and verification purposes. With its unique properties, blockchain technology promises to revolutionize the way we transact and store our data.
WHAT ARE SMART CONTRACTS?
Smart contracts are computer protocols that facilitate, verify, and enforce the negotiation of a contract. They can be used for a wide range of digital transactions such as financial exchanges, online auctions, land registry records, and more. Smart contracts use bitcoin’s blockchain technology to create immutable chains of transactions that cannot be reversed or disputed. This allows parties to trust each other without having to rely on third-party intermediaries like banks or brokers. Smart contracts allow people to send and receive BTC quickly, securely, and without fear of tampering or fraud. In essence, they offer a unique combination of security and convenience that makes them invaluable in today’s digital landscape.
By using smart contracts instead of conventional legal methods for contractual agreements between two parties, disputes can be resolved quickly and without the need for costly mediation or arbitration. Smart contracts are also becoming increasingly popular in other industries such as e-commerce, real estate, insurance, and healthcare due to their efficiency and ability to reduce risks associated with traditional legal methods.
Overall, smart contracts offer a secure and efficient alternative to traditional contractual agreements while allowing parties to take part in transactions digitally. This vastly increases the speed at which transactions occur and helps reduce costs associated with dispute resolution or fraud prevention.
WHAT ARE CRYPTO WALLETS?
Crypto wallets are digital wallets designed to store Bitcoin (BTC) and other cryptocurrencies safely. They provide a secure way to manage, send, and receive funds. Crypto wallets generate private keys that are used to sign transactions and provide proof of ownership of the cryptocurrency stored in it. For added security, most crypto wallets also include an additional layer of encryption such as multi-factor authentication or biometric identification. It is important to keep your crypto wallet safe by backing up your wallet passwords and private keys in multiple locations. Using a reliable online service or cold storage device can help protect your bitcoin from theft or loss. Additionally, some services offer insurance for bitcoin stored in their wallets, providing extra peace of mind for users.
Overall, crypto wallets are an important part of cryptocurrency transactions and offer users a secure way to manage their bitcoin and other digital assets. They provide a convenient way to send and receive bitcoin payments while keeping your funds safe from theft or loss. By following the proper security protocols, users can rest assured that their bitcoins remain secure in their wallet.
WHAT ARE NFTs?
Non-Fungible Tokens (NFTs) are a type of asset that offer a new way to store and exchange value. Unlike Bitcoin or BTC, which exist in abstract form as digital records on the blockchain, NFTs are tokens that represent a unique asset. They can be used to represent ownership of digital art, collectibles, music rights, real estate titles, loyalty points, tickets and more. NFTs provide an immutable record of ownership and transferability due to their use of smart contracts on smart contract blockchains. This means they can be traded efficiently and securely without the need for third-party intermediaries such as banks or brokers. As such, they offer users an unparalleled level of transparency while also providing them with an immutable record of ownership. Furthermore, NFTs are highly sought after by investors due to their ability to store and transfer unique versions of value. Consequently, they have become one of the most popular on-chain assets in recent years, attracting significant attention from both retail and institutional investors alike.
WHAT IS BITCOIN?
Bitcoin (BTC) is a decentralized digital currency. It was created in 2008 by an unknown person or group of people using the pseudonym Satoshi Nakamoto and released as open-source software. Bitcoin is not controlled by any central authority and instead relies on a peer-to-peer network to process transactions, validate balances, and store records.
Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger known as a blockchain. Bitcoins can be exchanged for other currencies, products, and services. Despite its volatile price fluctuations, bitcoin remains one of the most popular digital currencies worldwide due to its security measures such as decentralization, trustless consensus mechanisms, immutability of transactions, privacy advantages compared to traditional banking systems
WHAT IS ETHEREUM?
Ethereum is an open-source, blockchain-based distributed computing platform and operating system that enables users to develop and deploy decentralized applications (dApps). Ethereum was proposed in 2013 by Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine. It was launched two years later with its own cryptocurrency, Ethereum (ETH). Unlike Bitcoin (BTC), which is used as a digital currency, ETH serves as the “fuel” or “gas” for dApps alongside being a digital currency. Through smart contracts, it allows developers to create new applications on the blockchain without worrying about censorship or interference from third parties. Its functionality also allows for decentralized financial instruments such as derivatives, stablecoins, and tokens to be built atop its platform. Ethereum has become one of the most widely used blockchains for decentralized applications, and its use is likely to increase in the future.
WHAT ARE STABLECOINS?
Stablecoins are cryptocurrencies that are designed to maintain a stable value relative to their underlying asset. Unlike Bitcoin (BTC), which is highly volatile and prone to sharp price swings, stablecoins aim to provide users with more stability and predictability. This makes them an attractive option for those looking to use digital currencies in everyday transactions or investments. Stablecoins can be backed by a variety of different assets, including fiat currencies, commodities, real estate and other cryptocurrencies. Depending on the asset used as collateral, they can offer different levels of security and protection against market fluctuations. Ultimately, stablecoins provide the potential for users to enjoy the benefits of blockchain without the same volatility risk.
WHAT ARE CEXs?
Centralized Exchanges (CEXs) are the most popular type of crypto exchanges. They operate as an intermediary between buyers and sellers, allowing them to trade Bitcoin (BTC), Alt coins and stablecoins. CEXs host a wide variety of trading pairs—from fiat currencies such as USD, EUR, GBP and RUB to cryptocurrencies like Bitcoin, Ethereum and Litecoin.
The main benefit of CEXs is that they provide users with increased liquidity due to their global coverage. This allows traders to easily convert one currency into another. In addition, CEXs offer improved security protocols compared to decentralized exchanges due to their centralized structure and user authentication process.
However, there are some drawbacks to using centralized exchanges. These include KYC (Know Your Customer) verification requirements, which can be cumbersome and intrusive. Furthermore, CEXs do not offer the same degree of privacy as decentralized exchanges since they are subject to government regulations. Lastly, users may lose control over their private keys when dealing with a centralized exchange, thus leaving their funds vulnerable to potential hacking or theft.
Overall, Centralized Exchanges have become an integral part of the cryptocurrency trading ecosystem due to its user-friendly nature and increased liquidity options. Nevertheless, traders should always proceed with caution when making transactions on CEXs and ensure that they understand the associated risks before investing in Bitcoin or other cryptocurrencies on these central platforms.
WHAT ARE DEXs?
Decentralized Exchanges (DEXs) are cryptocurrency exchanges that don’t require an intermediary such as a bank or a 3rd party to process transactions and orderbooks. Instead, users interact directly with one another via a distributed peer-to-peer network/protocol, allowing them to trade digital assets in a secure and trustless manner.
The absence of intermediaries gives DEXs numerous advantages over traditional centralized exchanges. Most notably, they offer more privacy as there is no central point of control or authority that can be used to identify users on the platform. Additionally, they eliminate counterparty risk since the user has full custody of their own funds throughout the transaction process and are not exposed to the potential risks of a 3rd party holding customer funds. The distributed nature of the platform also makes it more resilient to cyberattacks and other malicious activities. Finally, DEXs usually have lower fees than centralized exchanges as there is no intermediary taking a cut.
Given these advantages, DEXs are becoming increasingly popular within the cryptocurrency industry and are seen by many as a more secure and cost-effective alternative to traditional exchanges. As cryptocurrencies continues to rise in popularity, the demand for decentralized exchanges is only likely to increase further in the coming years.
By providing users with an efficient, trustless and secure environment where bitcoin (BTC) can be exchanged quickly and easily, DEXs are revolutionizing the way digital assets are traded. For these reasons, they are likely to remain a key part of the cryptocurrency industry for years to come.
Our executive content production team
Jahon Jamali
Jahon is the Chief Marketing Officer of Sarson Funds and leads American Crypto Academy, a web3 education platform with a focus of onboarding and legislator education. Author of “Deep Crypto“, he has over 10 years of marketing leadership experience in venture funded start-ups like Kapow (acquired by Kofax) & The Appraisal Lane (acquired by Reynolds & Reynolds). A former US intelligence officer, Jahon holds a BA and MA from Johns Hopkins and attended the Babson College Graduate School of Business.
John Sarson
John is the CEO of Sarson Funds, and leads the firm with over 15 years of Wall Street wholesale investment sales leadership experience, with successful tenures at firms like Guggenheim & Lord Abbett. A leading digital asset investment expert, he founded a registered investment advisory in 2016 prior to founding Sarson Funds and is a graduate of the University of Notre Dame.
