Crypto is no longer a secluded industry with a small fan following. It is everywhere now. I bet you have heard or read about crypto multiple times in the last year. News Channels are realizing the importance of Crypto and demystifying it for the general masses. Almost all popular channels have created some sort of guide or news package on “What is Crypto?” However, some people still struggle to understand how the crypto industry works.

This guide will explain cryptocurrency and blockchain for beginners and discuss the features of this technology.

What is Cryptocurrency?

The word Cryptocurrency is a combination of two separate words ‘Cryptography’ and ‘Currency’. Cryptography is the method of securing the information so that no unauthorized personnel can access it. Whereas currency is the medium for transferring value.

Cryptocurrency is digital cash that you can use to transfer value. You can pay it for buying Pizza or lending money to your friend. Unlike traditional money, cryptocurrency is not owned by any banks or central institutions. There are computers around the world that act as banks and store crypto transactions information. This storage facility for crypto info is also known as Blockchain. More on that in the next section.

Features of cryptocurrency

Digital money has some cool features that separate it from fiat currencies. These include:

Fast and Secure Payment Method

Crypto payments are completely secure through cryptography. Breaking into crypto ledgers and changing information is nearly impossible. Therefore the transfer of money is guaranteed. Moreover, the crypto is sent over the internet in minutes. It doesn't require confirmations from banks or any other entities.

No Permission Required

Cryptocurrency is decentralized which means the people using it are also the maintainers of the system. There is no central authority that can freeze your wallet or stop you from sending money. This feature of crypto makes it useful during times of turmoil in countries. For instance, the closure of Banks in Afghanistan during the political crisis urged Afghanis to turn towards crypto.

No Middleman

The cost of sending crypto is also less than sending Fiat. There is no middleman or intermediary when you are doing transactions. This eliminates fees and other system maintenance charges.

Anonymous Transactions

Crypto transactions are anonymous and do not reveal the identity of the sender or recipient. This feature is sometimes construed as the negative aspect of crypto because it facilitates money laundering. However, most crypto exchanges take measures to curb such transactions.

Bitcoin: The first-ever Cryptocurrency

Bitcoin is the king of all cryptocurrencies. It was introduced in 2009 by a programmer or group of programmers with the pseudo name Satoshi Nakamoto. Satoshi published a White Paper detailing the functioning of Bitcoin in 2008. One year later the software was released and the rest is history.

Bitcoin or BTC is a decentralized cash system. It is run by thousands of computers around the world. Your computer can be a part of this system by running open-source software.

The information of bitcoin transactions is stored on the blockchain which is like a shared data sheet with multiple copies stored on computers around the globe.

What Is Blockchain?

Well, we have given you some idea about blockchain at this point. Let’s dig a little deeper and understand the working of it.

Blockchain is a database that contains transaction information. It is like a spreadsheet but there are some cool features that differentiate it from an ordinary excel sheet.

Append-Only

You can only add information to the blockchain. You are not allowed to delete any previous data. This is called the append-only feature of blockchain.

Linked

The whole blockchain is linked cryptographically. Every new entry contains a hash (fingerprint) of the old entry. Hashing of data blocks is necessary to make them a part of the blockchain. This feature makes it impossible for anyone to add fake entries to the blockchain.

Secure

Cryptography makes blockchain extremely secure. Data is protected in such a way that no one can change it without breaking into multiple computers at the same time. Therefore, Blockchain is called an ‘Immutable Ledger’.

Cryptocurrency Trading

Blockchain and Cryptocurrency are used in multiple industries at the time. It is a replacement for traditional centralized operations in the internet world. But beyond that, crypto is massively popular among the younger generation for short-term gains.

Crypto trading is the activity of buying and selling crypto to make a profit from market volatility. There are hundreds of crypto trading pairs available on cryptocurrency exchanges like Coinbase and Binance.

Automated crypto trading is also gaining popularity in the world. It is an excellent side hustle for passive income. Trading tools like Digiebot allow you to trade efficiently 24/7 with minimal input. You can head over to this blog to learn more about digiebot.

Closing thoughts

Crypto provides a hedge against inflation. It is a non-traditional asset for investment. Countries and institutions around the world are adopting crypto and blockchain technology. In short, we are entering the era of digital currencies. One simply cannot ignore crypto and its impact on the global economy. Hence we need to keep learning about crypto and its applications in our lives.

Decentralized Autonomous Organizations (DAOs) are internet-based businesses without any centralized hierarchy. There is no CEO or CFO for the business. Every member has a voice in decision-making. The business is managed by a community according to a certain set of ground rules defined in the blockchain.

DAOs have coded rules and no member can breach them. The changes in the rules are enforced via proposal. All proposals are voted and approved by the members. Lack of central authority means there is no need for building trust.

Salient Features of DAO

There are multiple causes for which people gather on the internet. Sometimes the cause involves raising money for marginalized groups or running an online business from which anyone can earn. People can be skeptical while dealing with money matters with strangers. However, DAO can solve this problem.

You don’t need to trust the person sitting on the other end of the globe. A decentralized autonomous organization will build the edifice on verification. It will open doors for multi-layered collaboration among a global audience.

Here are some of the salient features of DAO.

• The organizations are democratic in nature with every stakeholder/member having a vote on the proposals. Each proposal is meant for bringing improvement and introducing new functionalities.
• An approved proposal is automatically implemented. DAO doesn’t need a trusted third party for carrying out the changes.
• All the operations such as fund distribution, service provision, and others are automatically executed in a decentralized manner.
• The open and distributed nature of blockchain makes all information accessible to everyone. Thus, members can verify the transactions and fund allocations.
• There are two common models of DAO membership. Token-based and Share-based.

Examples of DAO:

DAOs have applications in a variety of online venture funding businesses. You can build a DAO for your freelance work where the investors can create a pool of investments. Charity is an area where DAO can prove useful for collections and distribution of donations.

Dash 

How does a DAO Work?

As mentioned earlier, there are two ways to become part of a DAO. You can either hold the tokens or shares of the organization. Token-based DAO membership allows the trading of tokens in a permissionless system. The holders get to have the say in the governance of the organizations.

DAOs have to perform their operations using smart contracts which are deployed on the Blockchain. A smart contract is a piece of code that executes itself when certain conditions are met. Smart contracts are impossible to circumvent. They are coded and biding in all scenarios.

The terms and conditions of Smart Contracts are decided by members/stakeholders via voting. Often a governance proposal is introduced and then the token holders vote on that proposal. If the majority of votes are in favor then the proposal is deployed.

The method of voting is completely fair and democratic. The stakeholders either have a share or tokens of the blockchain.

DAOs operate in a transparent manner. Anyone can see the code and operations and conduct an audit. Moreover, the immutable nature of blockchain makes the info impossible to change. Thus, DAOs can work with the least human input.

Launching DAOs:

The establishment of Decentralized Autonomous Organizations happens in three phases.

Creation of Smart Contracts: As the first step, Developers create the smart contract behind DAO with all the basic information. Smart contracts have another name dApps or decentralized applications. There are many blockchains that allow the creation of dApps. However, Ethereum is the most popular one in this regard.

Funding: At the second stage, DAOs need funding to operate. The creators sell tokens to start the funding drive. The buyers of the tokens start to hold voting rights based on their purchases.

Deployment on Blockchain: Finally, the smart contract is deployed on the blockchain where it operates the DAO. From this point onwards, governance of the Smart Contract is dependent on the stakeholders. Developers can no longer make any changes on their own.

Why do we need DAO?

In the years of pandemics, we have learned that internet-friendly businesses are much more likely to succeed in the long run. Decentralized Autonomous Organizations are an excellent way of collecting funds when you are a start-up.

Here are three ways in which DAO can prove advantageous:

1. The whole organization operates with nearly zero human input. Smart Contracts execute themselves and every improvement is automatically implemented.
2. When two parties come together for business, trust becomes an important factor. However, DAOs need no trust-building exercise. Every operation is open and verifiable. Thus, you can collaborate with strangers without worries.
3. Not having any hierarchy or higher management means, that anyone can put forth their improvement proposal for waiting. Thus the ideas can come from anywhere and all members have to consider it for voting.
4. All disputes among the stakeholders can be resolved internally through community governance. Everyone has to just trust the code. There are no CEOs or higher management taking decisions on members’ behalf.
5. DAO allows investors to get into a start-up early on. They can put in their funds and later on take advantage of the success.

Closing Thoughts

Decentralized Autonomous Organizations are a new technology. They have attracted both praise and criticism from all quarters of the tech world. Nevertheless, many blockchain projects have incorporated DAOs to go fully decentralized in the Defi space. The concept is still new and companies around this model are also not very old. Thus, we have yet to see how the DAO model helps communities achieve their goal.

Cryptocurrency project launches are increasing with the popularity of the industry. There are multiple fundraising methods for new coins launch. However, the one particular method getting popular over the last year is IDO or Initial DEX offering.

Like any other start-up, token projects need funding upon their launch for success. This funding can come in different ways. In the early days of crypto, the coins were launched with an ICO or Initial coin offering. The funding investors would get a share of the coins. In some cases, the coins took off after the launch bringing wholesome gains for the investors. Nonetheless, some coins turned out to be scams.

The problem with ICO is that it has no regulations. Projects are not well scrutinized and there is no protection for investors. In this scenario, IDO presents as a better alternative. It makes fundraising much safer by providing investors the control.

Introduction:

Decentralized Finance has created its own fundraising method known as Initial DEX Offering. It collects funds from investors and gives liquidity to new tokens. Decentralized exchanges or DEX are at the center of this model.

The ICO crowdfunding model tends to raise more funds than IDO. Moreover, investors find it difficult to understand how decentralized exchanges work. Nonetheless, IDOs are becoming popular with new coin developers preferring it over other types of funding.

What is Initial DEX Offering?

In an Initial DEX offering, an investor can purchase the new token by locking his funds on a decentralized exchange. The locked funds provide liquidity to the new tokens. The price of a token starts to rise after it is released for public sale.

Liquidity pool providers on decentralized exchanges receive the rewards for holding the tokens. This is also known as proof of stake consensus. The holders are incentivized for staking the tokens and not selling them soon.

IDO allows makes it easier for developers to launch their coin projects. Additionally, the coin is instantly listed on the exchange after the IDO is completed. Thus, the investors can cash out their coins when the price starts moving up.

Despite its many upsides, the IDO is criticized in Crypto circles for a variety of reasons. For instance, the vetting process for IDO is quick and doesn’t involve due course like ICOs. As a result, many times low-quality projects or even scam tokens get listed. There are also technical vulnerabilities in which case hackers can take advantage of the funds.

How to launch your Crypto project via IDO?

The best way to grab a market for your token project is through an Initial DEX offering. Here is how you can do a successful IDO in 3 simple steps.

Create Your Own Token with liquidity

Anyone with a little understanding of technology can create their own token in the crypto world. There is an app called cointool.app that allows you to create your own token on Ethereum or Binance Smart Chain. Here is a step-by-step guide on creating your own deflationary token. You can select LP reward, Burning, and other features for the token.

Prepare Marketing Material

Marketing is the most important aspect of getting your project out there. Excellent marketing will help you gain investors’ trust. Develop an appealing website and publish your whitepaper. Let the audience know the real-world utility of your token. Present a case that your token is a worthwhile investment.

Go to DEX Launchpad

There are quite a few decentralized exchanges in the market. PancakeSwap and SushiSwap are the popular ones. You can check the DEX requirements and after meeting them launch and IDO for your token. The investors can receive tokens in sale on these exchanges.

Advantages of IDO

Since the popularity of IDO, most of the project owners are turning towards it for the sale of their tokens. Here are some of the advantages of IDO that set them apart from IEO and ICO.

• IDOs make it easier for small project owners to launch their tokens. The cost for conducting IDO is very less compared to other crowdfunding options. Moreover, an investor can easily become a part of promising projects simply by connecting their wallet to a decentralized exchange.
• The funds are locked on IDO platforms and help provide liquidity to the token. This can reduce the price volatility for newly released coins.
• Some of the IDO platforms have anti-whale features. This makes it impossible for big investors to hijack the sales and use the price hike to their advantage.

Concluding Thoughts:

Initial Dex Offering involves a decentralized exchange helping raise funds for a token project. DEXs vet the project, run smart contracts, and open liquidity pools for tokens. Investors are incentivized for not selling early. IDO is a simple affordable process of crowdfunding in decentralized finance. However, it faces some limitations as far as due diligence is concerned. Nonetheless, IDO has been used by many project owners to launch their projects in the last few years. Therefore, we would likely see this crowdfunding model evolve along with the rest of Defi.

Front Running is a concept that has long been present in the trading markets. Back in the day, a trader would watch the big orders take place and jump the line to front-run the other trader. It helped him bag an easy profit. Today, front running has become easier with computers and trading bots. More so in the world of crypto where instant decisions can make the price spike.

Cryptocurrency markets can be easily manipulated with big transactions. Whales often pump the price of a currency by buying a big chunk of its supply. As the supply reduces the demand for a currency increases. This discrepancy among demand & Supply leads to a higher market price for the coin.

Front runners do the opposite of whales. Instead of creating demand, they look for a coin that is already being readily bought in the market. After getting in the front runner can then sell his holding at a profit.

Front Running in Crypto:

Cryptocurrency traders are aware of the market volatility. They need to take into account the factors such as trading volume and trading activity. The price of a coin can fluctuate between the time an order is placed and the time when it is executed. This concept is also known as slippage.

The front running can cause the slippage for a digital asset. Here is how they manipulate the price:

A front runner sees a trader place an order for a coin. They place the order for the same coin. Now if the front runner’s order is executed first then they are in a good position to sell the coin at a higher price because of its escalated demand.

Crypto traders also call it the “sandwich” maneuver where the purchase of one trader makes the price go up for the other potential buyer. Thus, the sandwich is completed when the first buyer sells for an easy profit.

Front Running on Decentralized Exchanges Using Flash Bots:

Decentralized Exchanges like Uniswap run based on the Ethereum blockchain. Transactions are visible before completion. Therefore, another trader can jump the line and purchase the order ahead of time. Moreover, the use of trading programs called ‘Flashbots’ has also increased the chances of traders suffering from front running.

Flashbots are faster than humans. They catch the opportunity in the blink of an eye. High-frequency trading allows bots to bag increased profits. A manual trader cannot outsmart the bot. Thus, the crypto community is debating whether front running is a legal practice?

Is front running illegal?

Front running is a fishy activity. It involves taking money out of other traders’ pockets. Many times the front running bots or front running traders offer a higher gas price so that the miner gives preference to their trades.

It is not an illegal practice but an unethical one. Front Running with the help of flashbots allows traders to make money at the expense of others. The manual orders get thrown down.

Conclusion:

Front running is easy on decentralized exchanges because data is available to everyone. You can see the buy and sell order and insert your own. This strategy is more effective with computer programs like flashbots.

The crypto community sees this as a manipulative practice. Hence, traders are often searching for ways to protect themselves against it. With flashbots, however, the competition is getting tougher.

Cryptocurrency trading is a financial tool. It helps in making money out of fluctuating prices of digital assets. There are more than 1,500 cryptocurrencies in the world right now. For new investors, it is often difficult to decide which currencies to choose. Therefore, traders are always on the lookout for free trading courses online. 

Crypto is a volatile market. The price of assets can surge or plunge within hours. This happens because crypto is still not a mainstream industry in many parts of the world. Countries and governments frequently try to regulate this growing industry. Thus, you never know what to expect. Nonetheless, professionals can teach you how to stay informed on happenings in the crypto market.

Digiebot is your go-to place when it comes to learning about cryptocurrency. We offer free trading courses online to crypto traders. Before we share the details of our trading classes, let’s look at what are free/paid trading courses.

Introduction to Free Trading Courses Online:

If you are interested in trading, you will have hundreds of such courses online. However, not every course is good for you. There are a few paid trading courses available online for free, while others are free trading courses for online audiences. In order to make your choice easier, here are the characteristics of the best day trading courses for beginners.

1. The teacher/instructor has hands-on Experience in Trading:

Learning trading from a quack will cause more harm than good. When selecting a trading course, research the instructors. Check how many years of experience they have in trading. People with vast experience are particularly aware of working strategies. They can teach you specific skills for dealing with the different market conditions. Thus free trading courses online with experienced instructors are best for you.

1. Method of Teaching is Transparent:

Transparency builds trust. A good trading course will provide the name of resources that instructors consult. This helps students in checking the resources themselves and see how the tools are applying in the learning. Moreover, this list of resources can help the attendees of the course after the course has ended. Hence, the best trading resources provide a lifelong learning opportunity to the students.

1. Instructors are Approachable:

People who opt for the trading course are oftentimes already into the trading business. They can get stuck on a concept while trying to put lessons to work in day trading. In this scenario, approaching instructors becomes necessary for clarification and understanding. Best free trading courses online make it easier for students to communicate with teachers. Multiple communication channels are made functional to facilitate teacher’s direct communication with students.

1. Clearly States the Risks

All types of trading markets like the stock market, forex market, and crypto market have an element of risk. Besides, some of the trading strategies hold more risks than others. For instance, advanced algorithmic trading is touted as the fastest method of amplifying your returns. Nonetheless, it is very risky for inexperienced traders. So the providers of the best day trading courses online will be honest about the risks associated with different tips and tricks.

1. Tailored for a targeted Group:

Traders differentiate from each other in terms of experience, use of resources, and trading methods. The best trading courses are tailor-made for a specific group of traders. For instance, the day trading courses for beginners and advanced level traders have different course material to meet the needs of students taking these courses.

You will find two types of trading courses online: free courses and paid courses.

Trading Courses Online For Free:

These trading courses teach the basics of trading to users online for free. The trading services providers like Coinbase etc are often involved in teaching such courses. You can search for free courses on the website of trading exchanges and trading brokers. Choose the ones that are simple and according to your needs.

Crypto is a new industry. Therefore, the organizations operating in this sphere are enthusiastic about creating crypto awareness free of cost.

Paid Trading Courses for Free:

Paid Trading Courses are available for free on sites like Coursera, Udemy, and edx. You can audit these courses and start 

Here is our free trading course online available to traders around the world. Learn to trade in the cryptocurrency market with the efficient tools and data at hand. 

Best Trading Course for Beginner Traders:

Digiebot has put together a great team for helping beginners and advanced-level crypto traders with free trading courses online. Here is what you will learn in these courses.

1. Analysis of the Market:

Paid trading courses for free teach trading with the perspective of the forex market. That’s why the lessons are often not relevant to the crypto market. Crypto is a new market. It has its own triggers and patterns. Therefore, our instructors teach students the following ways of analyzing the market:

• Fundamental Analysis
• Technical Analysis
• Sentiment Analysis

You can gauge the direction of the market by looking at the above three factors.

1. Trading Strategies:

Crypto market swings in unfortunate directions without a prior warning. Our trading professionals have experienced many such swings. As a result, they have come up with some strategies that help in managing the risks in the crypto market. The following strategies are taught for money management in the crypto market:

• Cost Averaging
• Long Term Hold (LTH)

You can keep your assets safe during bear market swings with money management.

1. Trading Indicators:

Some trading indicators from the forex market work in crypto as well. However, crypto has its own indicators. We teach the basic and advanced level indicators that can help traders in making the best out of their trades.

1. Algorithmic Trading

Our free trading course for online audiences also centers around algorithmic trading. Algorithmic trading is a kind of trading where algorithmic/automated trading software takes trades on the user’s behalf. It is a smart, efficient, and cost-effective method of trading.

In Digiebot’s zoom classes, we discuss which algorithmic trading software to choose and why. 

1. Coin Selection:

There are hundreds of coins in the crypto market. Moreover, new coin projects are released every other day. This scenario confuses the traders with a minimal budget. They don’t know which coins will have potential in the future. Our instructors analyze the coin projects and guide students on where to put their money.

1. Free Coupons

At the end of the trading classes, our instructors give free coupons for trading software to students. Free coupons are the best way for kickstarting your trading journey on trading platforms. 

If you are interested in taking free trading courses online with professional traders then sign up on this page. Our teachers have more than 40 years of collective experience in trading. You will gain specific knowledge regarding crypto markets at the end of these courses.

Conclusion:

 They say,

 A smart person learns from his mistakes, a real wise one learns from the mistakes of others.

Learn from professional traders in free trading courses online as well as paid trading courses online for free. Our trading courses for beginners will equip you with the expertise necessary for success in crypto trading.

The cryptocurrency revolution led by bitcoin is changing the world of finance. There are thousands of crypto tokens doing functions that were previously done by fiat currencies. Crypto tokens, smart contracts, and blockchain together have formed decentralized finance or DeFi.

DeFi users can access financial services anywhere at any time. There are no intermediaries like banks involved in this system. DeFi aims at digitization of finance with verification of transactions at the center of the system. Users are receivers as well as the contributor of the services.

What is the Meaning of DeFi?

The meaning of decentralized finance or deFi is that there is no central authority controlling the financial system. A user can send, lend or borrow money without having to trust a bank. You only need to have a digital device with an internet connection. 

Decentralization also gives you freedom. You are no longer dependent on the government or central banks. The banking holidays, country-wide protests, or any other such events cannot cease the provision of financial services.

DeFi also eliminates the factor of human error. All services are executed according to the smart contract which serves as a piece of agreement delineating all the terms and conditions. Let’s simplify the term.

What is a Smart Contract?

A smart contract is a piece of code. It executes itself when certain conditions are met. It works under the ‘if/then’ condition. You can purchase your asset from an unknown seller under the aegis of the smart contract.

Smart contracts are beneficial in the following ways.

• The smart contract is efficient.
• It is executed immediately after the conditions are met.
• There are no delays like the banking system.
• Smart Contracts are also cost-effective.
• Users can execute them in a very short time.

Is Bitcoin DeFi?

In some sense Bitcoin is the pioneer of DeFi. Bitcoin is the first-ever digital currency. It is used as an exchange of value just like fiat currencies. You can send bitcoin on a distributed ledger. It neither requires trust nor the identification of the person sending/receiving money.

Bitcoin has provided the basic framework for the functioning of deFi. Ethereum, on the other hand, has taken the game o the next level.

Let's understand centralized finance first and see how decentralized finance will take its place.

Centralized Finance

In centralized finance, banks are financial intermediaries. They play the role of a trusted third party. If you want to send money to your cousin in another country, you go to the bank. If you want to borrow money, you go to the bank. And if you want to invest money for your children, you then go to the bank.

Also Read: NFTs - The Next Revolution in the World of Tech

In short, in a centralized system, we are extremely dependent on banks. There is nothing much we can do if banks blow up our money. Mind you such things have happened in the past. For example, during the 1930s Great Depression, Banking System failed in America. Millions of Americans lost their saving which they put in the banks.

System of Trust

In centralized Finance, there is a system of trust. You trust the central authorities like governments and banks with your money. However, there are multiple risks attached with putting all the power in hands of central authorities.

For example, if you have all your savings in dollars. The government decides to print more money and devalues the dollar. Now you have lost money due to governmental decisions but you are helpless here. Nevertheless, there are multiple other risks attached as well.

Six (6)Risks in Centralized Finance:

1. The biggest risk is censorship. The central party (I,e banks) can totally track where the money is coming from and where it is going. They can stop their citizens from performing transactions and other financial activities.
2. The second risk is delays. The banking system is slow. If you want to send money to your cousin in another country, you need to do some paperwork and meet certain criteria. This delays the transaction process.
3. The third risk is that services of central authorities are limited to the country. If you are a Citizen of the USA then it is nearly impossible for you to apply for a loan from the Bank of England.
4. The Fourth risk is confidentiality. You don’t know where your money is once you have deposited it in the bank. Therefore, you cannot be sure that your money will be there in the bank when you go to withdraw it.
5. The fifth risk is that do not allow anonymity. Banks have a KYC (know your customer) model. So you cannot do a transaction without providing your identification data.
6. Lastly, banking activity also has huge costs. Banks charge you for performing transactions. There is a fee for sending money. Moreover, if you are running a business with loans from the banks then banks have a say in what you can and can’t do.

Decentralized Finance

Decentralized Finance has come to solve the problems of centralized finance. It creates an open and permissionless financial system where individuals are in control of their financial activities.

In DeFi, Smart contracts take the central stage instead of banks. Smart contracts contain terms and conditions for the execution of the transactional activity. Both parties can read the terms and conditions of smart contracts. You can create your own smart contract as well.

System of Verification

DeFi has a system of Verification instead of trust. You can verify the coded terms and conditions in smart contracts. In addition, you also write your own smart contracts. DeFI is not controlled by any central authority. So there is no fear of losing your money to governmental decisions, financial collapses, or stock market downfall.

Six (6) Benefits of Decentralized Finance

The DeFi system has no censorship. You can enter into it and leave it without anyone stopping you.

1. DeFi system is totally digitalized. You can send your funds (i.e Cryptocurrencies) anywhere in the world in an instant.
2. Another positive aspect of DeFi is its global structure. You can become a part of DeFi from anywhere in the world. The system is spread globally and not limited to any country.
3. DeFi system is totally transparent. If you lend your ethereum in a smart contract then you can always track where your currency is and who is using it. You know that you can withdraw it at any time.
4. DeFi works with anonymity. You don’t have to provide your identification data for lending or borrowing money in DeFi. Therefore, you can safely become a part of DeFi.
5. The cost of DeFi is very less as compared to the banking system. You can transfer $10,000,000 worth of Ethereum from one address to another with a fee of only $5.

Role of Ethereum in Defi

Ethereum blockchain is used for building smart contracts. The native token of the Ethereum blockchain is Ether (ETH). You use your ether coins to get a loan or lend money in the defi system.

The growth of the DeFi network is quantified by how much ether is locked into it.

Lending in DeFi

Like the banking system, you can do lending in defi as well. Let's say you want to earn interest on your ether funds. You stack them in a Smart contract on the AAVE platform and in turn receive C Tokens (which represent your original assets) as well as interest. So now you have full custody of your tokens and you have also lent them. You can keep track of where your tokens are being used. Moreover, You can withdraw them at any time.

Read More: Token Economy

Borrowing in DeFi

Your ether is an asset that you can put in the smart contract and borrow some money on it. The borrowed money is in coins like Tether or other DeFi Tokens.

In DeFi, you need to put in an extra amount of assets to borrow a certain amount of money. Let’s say you want to borrow $500 of Tether. Then you need to put in $800 worth of Ether. Your stacked money is used to pay interest to the lender

Stablecoins and DeFi

Decentralized Finance depends on stablecoins. Examples of stablecoins include DAI, Tether, and USD coin. These coins are pegged to US dollars. This essentially means that the price of these coins is always $1. You can easily trade cryptocurrency in the DeFi world using these coins. Trading with Stable coins makes you less dependent on fiat currency or your local currencies.

Closing Thoughts:

Decentralized Finance intends to perform all the functions which centralized finance is performing without the censorship and role of intermediaries. It is the next big thing in the crypto world. You can also become a part of DeFi without any difficulty. To learn more about decentralized finance keep visiting our blog.

The Cryptocurrency Market is still new. It has been around only for like 13 years. In the early years no one took crypto seriously. But now as the value of bitcoin and other digital currencies is rising, everyone wants to take advantage of this new hype. The value of bitcoin has risen more than 50% just in the last month. 

With the popularity of bitcoin, the threat of getting scammed in crypto is also growing. There are plenty of ways in which scammers lure new crypto investors in, and rob them of their hard earned money. According to the Federal Trade Commision of the United States, nearly 7,000 people lost more than 80 million dollars in crypto scam investments from October 2020 to march 2021. These people were scammed by multiple methods.

In this blog we will discuss the top eight ways in which crypto scammers can reach you and try to steal your money. Beware and take the necessary steps to ensure safety of your investments.

1. Email Scams:

In a recent survey by Cryptovantage of more than 1,021 American crypto owners, 32% said that they became a prey of scammers in the past. The biggest share of scams was in the form of emails.

The common method of scammers is that they send malware attachments or links to a fake website in the email. As soon as you open the attachment or click on the link, your device is hacked by the scammer. 

Sometimes the scam emails may look like legitimate emails from a crypto exchange asking for your login information. As soon as you provide the information, the scammers log into your wallet and steal all your assets.

In order to protect yourself from email scams, never click on the random links or attachments that you receive from unknown email addresses. If an email from your wallet exchange asks for logins, double check the email address for any changes. Moreover, you can also contact the exchange to confirm whether they really sent you the email for generating login information or is it just a scammer trying to gain access into your account.

2. Imposter Websites:

Imposter websites are fake websites that look like a real one. These websites are set up to scam people by taking their login credentials for the original sites. Oftentimes impostor websites are copying the famous exchanges sites like Coinbase and Binance. 

In order to protect yourself from impostor sites, carefully check the URL of the exchange site when visiting. If you see a ‘not secure’ phrase on the left side of the URL then do not provide your personal information. Additionally, if you are a frequent visitor of an exchange site then bookmark it for safe visit. Manually typing the URL can land you on an impostor page.

If you are investing in crypto and using a new exchange then go through their reviews. Do a background check to see their legitimacy and how they keep your funds.

3. Rug Pull:

Rug pull is a form of ‘exit scams’. You must have heard of Bitconnect which turned out to be a rug pull. The platform promised the investors 1% daily returns on their investments. People had to swap their bitcoin for Bitconnect Coin (BCC). Investors abandoned the project after 2 years of launch, taking away bitcoin worth 2 billion dollars. The value of Bitconnect Coin plunged 92%. This is a classic example of rug pull where creators left the project and took investors money.

As new coin projects are launched in crypto space every other day, the threat of Rug pull is always imminent. Before investing your money in a project do research on its creators and what they are offering. If the returns are too good to be true then it is a scam. You can see that Bitconnect promoters promised 1% Scam every day without any risk. So this sounded Phishy from the start. Hence, you can protect yourselves against rugpulls by not letting your money go into ‘too good to be true’ projects.

4. Ponzi Schemes:

Ponzi schemes are popular investment fraud. There are no real or legitimate business models in ponzi schemes. New investors are paid with the money of old investors. When there are no more new investors then the returns end as well. There have been many ponzi schemes in the crypto market as well.

The first and foremost sign of a Ponzi scheme is that there is no sustainable business model. Secondly, creators of the project or business promise consistent profits with no risks. Lastly, people running the scheme are unlicensed individuals and there is not enough data regarding their whereabouts.

You can protect yourself against Ponzi Scheme by asking more questions. Get to know every little detail about the project before investing. Read the legal documents and  check the business model to see how your returns are being generated.

5. Pump and Dump:

Pump and Dump is a classic scheme in which opinion leaders or social media celebs do huge marketing of a project to drive its value. When the value reaches a point where they want to take profit they just sell their holdings. As a result, the value of coins quickly declines. 

The pump and dumps are common in the crypto market. Many individuals and groups do it frequently to earn high returns on their investments.Coins often surge without their fundamentals being noteworthy in any sense. 

You can spot the pump and dump easily by looking at who is supporting the coin? If there are individuals or people who have done pump and dump before then don’t invest in the coin. 

Another litmus test is to see if there is a particular reason for the price increase of the coin? For instance, the price of Ether coin increased after the London Hard fork because it made the Ethereum network better. However, if the coin price all of sudden surges after discussion of Social platforms regarding it then this is classic pump and dump.

6. Fake ICOs:

Fake ICOs are also a very common method of scamming innocent individuals. In the crypto market, ICO  or initial coin offerings are a method of launching new coins. It’s a method of fund raising for the project. Oftentimes you can purchase coins for less than $1 on its ICO. if the project turns out to be a success then the coin gains value garnering high profits for its initial investors.

Scammers know that investors are always on the lookout for new ICOs. So, they create fake ICO with false promises. People purchase the tokens and at the end the project goes bust and project owners run away with the money.

Protecting yourself against such ICOs is possible through learning about what makes a coin successful. Ask the distributors of tokens about their project. Check if the regulators will accept the coin as an asset. Sometimes the tokens end up being security which can cause their value to drop. Be smart with your investments.

7. Social Media Scams:

Social Media is a powerful tool when it comes to impact on Crypto Market. Oftentimes the high tweet volume for a currency can drive its value up. This power corrupts some people and they make fake profiles to scam users.

The method of social media scammers is simple. They create fake profiles that look like profiles of Authoritative People. They would then tell people to send them crypto for high rewards. You will see many fake profiles on twitter pretending to be Elon Musk asking people to send them bitcoin.

Last year, a group of hackers hacked into the profiles of famous individuals like Bill Gates, Jeff Bezos and others. A message was posted from their profiles that bitcoin sent to the given BTC address will be doubled.

Many people fell for this scam and sent their holdings to the address and never saw their coins return. 

You can protect yourself against such scams by doing simple research. Check if the profiles are real. Also, if the promises being made are too unreal then don’t fall for it. Let’s be honest, no one gives you something for free. Be it Jeff Bezos. Plus, if they are asking you to send money first then it is definitely a scam. Protecting your assets is your responsibility first. So don’t hand them over to someone else willingly.

8. Ransomware Attacks:

Ransomware attacks is a hacking attempt to collect ransom in crypto. The ransomware attackers reach the system of their target and lock the person out from accessing their important data. In order to give back the access they ask for ransom in bitcoin or other cryptocurrencies. 

Ransomware attacks are lethal. Big corporations often suffer from these. Collecting ransom in crypto keeps the identity of the hacker protected. Crypto  addresses are anonymous. You cannot track who is receiving  the money. 

Protect yourself from ransomware attacks by keeping your digital accounts protected with strong passwords and two-factor authentications. Don’t download unlicensed software from the internet or plugin malware-ridden drives to your system. Use Anti-Virus software to keep your system safe and sound.

Closing Thoughts:

So we have discussed the common crypto scams which include Email Scams, Imposter Websites, Rug Pull, Ponzi Schemes, Fake ICOs, Social Media Scams and Ransomware attacks. All of them are interlinked with one another in some sense. For example, email scams often involve the link to impostor sites that can contain fake ICOs. DeFi Rug pulls, Ponzi schemes and Pump and Dump all involve unreal return promises. Lastly, ransomware attacks are caused by clicking on phishy links or downloading threatening software. 

Crypto is the wild wild west of the Internet. You can protect yourself here only by being extra vigilant. Don’t be lazy with your investments. Learn about the coin projects and what they entail. Don’t trust celebrities, armchair experts, or anyone else. You can take help from experts but in the end use your own research to make the right purchase.

The mainstreaming of cryptocurrencies is on the cards with Coinbase listing. It is a watershed moment for digital currencies. The existing shares of Coinbase are now available on NASDAQ for purchase.

Coinbase went public via a direct listing on Wednesday. The company is the first major crypto startup to list on the US stock market. Crypto has become a real thing with this event. Now users can own stocks of Coinbase and take advantage of the volatile crypto market without actually buying the coins.

Crypto has come a long way in the struggle to establish itself. This industry now has the attention of the whole economic world. Cryptocurrency is built around the idea of an open and distributed financial system. It offers the verification of monetary activities without the need for any intermediary.

The villain from the Past

Crypto had its fair share of bad publicity in the past. Bitcoin, the parent cryptocurrency, was mocked as a tool for criminal. The anonymous nature of blockchain made it impossible for governments to track the person behind transactions. Moreover, decentralization took central authorities out of the equation. All this provided ground for suspicion.

Bitcoin was called out for being a flash in the pan for a very long time. Even after the magnificent rise of bitcoin's value, many financial analysts consider it a bubble.

Today cryptocurrencies market has crossed the value of $2 Trillion. The corporate sector is increasingly investing in bitcoin. Besides, crypto startups are attracting new members and customers.

Coinbase - The Amazon of Crypto:

Coinbase started its operation in 2012 when the crypto industry was in its infancy. Brian Armstrong, a former software engineer from Airbnb, and Fred Ehsram, a trader from Goldman Sachs, founded the company. They used their knowledge of the tech and finance industry to make Coinbase a success.

Coinbase exchange lets users buy, sell and trade cryptocurrency. Its headquarters is in San Francisco. Being the major cryptocurrency in the United States, Coinbase has a huge customer base. It has over 56 million verified users.

The not-so-distant past of cryptocurrencies is filled with booms and bust. Coinbase's fate has been linked with these market movements. During the bull market season, trading activities on the exchange increasing. On the other hand, bear days make trader shy away.

2021 is, so far, a good year for cryptocurrency. The surge of crypto markets is all over the news attracting new investors. Resultantly, Coinbase is also having its share of good luck.

The recent release of numbers before listing showed some fat profits for the company. It garnered $730 million to $800 million in net profit during the first quarter of 2021. Moreover, the total revenue in this time period is $1.8 billion. This is a ninefold increase from last year.

Coinbase listing gave the company a valuation of $85.7 billion. This is close to the valuation of Airbnb and Facebook when they went public. Coinbase's stocks also increased in price by 52%. COIN stock trading begins at $381, up from the reference price of $250.

The Watershed Moment:

The crypto enthusiasts are celebrating the Coinbase listing as the confirmation of cryptocurrency's potential. It proves that digital assets are worth mainstreaming. Moreover, it is a sign that a trustless, decentralized blockchain system can replace the centralized banking system.

The believers of cryptocurrency say that bitcoin and other altcoins can serve as an alternative payment system. Besides, bitcoin is immune to inflation. Governments and central banks can print as much cash as they want when it comes to fiat. However, bitcoin will cap at 21 million. There can be no more bitcoin beyond that number.

Despite criticism from the left, right, and centre, bitcoin never went to zero. It kept some gains from every bull run. At the time of this writing, bitcoin is trading at the price of $56,000. Besides, it reached the peak value of $64K in the past week.

More Corporate Buy-Ins?

The corporate sector's interest in crypto has been growing since 2020. The coronavirus pandemic provided a breeding ground for the bitcoin boom. Multiple companies invested a great share of their income into bitcoin.

MicroStrategy, a software company, led the way by purchasing bitcoin in 2020. The company has topped up their wallet with additional coins from time to time. At the moment, MicroStrategy owns 90,000 bitcoin.

Tesla, Elon Musk's car company, is also aggressively backing Bitcoin. The company revealed the purchase of bitcoin worth $1.5 billion in February 2021. Stepping further in the crypto's direction, the company has started Bitcoin in payment for their motor vehicles.

Also Read: NFTs - The Next Technological Revolution

Banks and financial services providers are also no far behind in making hay while the sun shines. Here are some highlights so far:

• Users can buy/sell crypto and settle payments using digital assets on PayPal.
• Visa has joined hands with crypto.com for settlements of transactions in crypto.
• Robinhood has plans of offering crypto deposits in Future.
• MasterCard Inc has announced plans of providing crypto services by the end of this year.

The corporate sector is already bullish on crypto. With Coinbase listing, we will see more involvement of the corporate sector and wall street in cryptocurrency.

Challenges Ahead:

Cryptocurrency has its own set of challenges. The same set of qualities that led Coinbase to popularity are the ones posing hurdles in mainstreaming crypto.

The first issue is the sudden price surge. The crypto market is extremely volatile. Coin prices can surge or plunge by a significant margin within few minutes. Moreover, much of the market movements come from speculations. Speculative mania can fuel pump and dump in the market. This often deters serious investors from investing in crypto.

Bitcoin is yet to be accepted as payment for products or services. No one uses bitcoin to buy coffee. The holders of BTC keep it as a commodity. Thus, the currencies cannot claim fiat's place.

The Crypto industry needs maturity to become truly mainstream. The number of crypto investors is still very few. Thus, the decision of few big whales can decide the fate of the whole market.

With institutional backing and investor's interest, cryptocurrency can stand its ground. Nevertheless, some crypto activists fear that regulations can threaten the free and open nature of decentralized finance.

Closing Thoughts:

Coinbase listing is a watershed moment for cryptocurrency. The digital assets now have the attention of financial Institutes as well as individual investors. We will likely see more purchases of bitcoin in the coming months. Thus, the era of the token economy has arrived. It just needs some time to establish properly.

The cryptocurrency industry is evolving at a fast pace. There are new kinds of blockchains developing in every nuke and corner of the world. Besides, the use cases of the blockchain have also changed over the year. The not-so-tech-savvy individuals are still trying to grasp the concept of cryptocurrency. And here we have, the NFTs.

If you are not living under a rock, then you must have heard of NFTs by now. They are all over the news. A digital artist Beeple sold his work as NFTs for 6.9 million dollars. Saturday Night Live (SNL) even made an explanatory skit about NFTs last month. Subsequently, they sold this skit on NFT as an NFT. So, you see what is happening here. You can associate a digital token with any form of digital art and then sell the token for millions of dollars.

The question arising in your mind right now must be, "what exactly are NFTs?"

What is an NFT?

NFTs are a new concept in the token economy. An NFT is a non-fungible token. It is similar to bitcoin. However, bitcoin is a fungible asset which means 1 BTC is equal to 1 BTC in all cases. On the other hand, NFT is unique. You cannot exchange one NFT for another one. Additionally, NFTs are minted on a blockchain.

Still, confused? let's elaborate with an example. You borrow a car from your friend for some time. At the time of returning, you give some other car in place of his car. Now your friend will confront you or may even file a case against you. This is because the car is a non-fungible asset. You can't exchange one for the other.

Likewise, non-fungible tokens are one of a kind. They are not mutually interchangeable. Moreover, NFT has to be purchased or sold as a single unit.

How do NFTs Work?

If you are a layman with little to no understanding of blockchain, then the whopping sell price of NFTs might not be making sense to you. How can a freely available & easily downloadable picture worth billions of dollars? But the truth is, it isn't about the picture. It is about its ownership. A painter can paint the exact Mona Lisa painting. However, the original one is still worth millions of dollars.

Also Read: The Rise of NFTs in 2021

NFTs are computer files that act as a deed. They exist on the blockchain. Ethereum is the most commonly used blockchain for NFTs. The value of an NFT is set by the highest bidder. The first-ever tweet on Twitter by Jack Dorsey was sold for 2 million dollars to the highest bidder.

How to Create NFTs?

A digital artist can easily turn his work into an NFT. They have to go through the following steps.

• Sign up on a digital marketplace.
• Mint Some digital tokens. The process of minting involves the upload and validation of information on Blockchain. It costs around $40 to $200.
• At the last stage, users can list their art piece on the NFT marketplace for bidding.

5 Best NFT Marketplaces

Now that NFTs are a hot topic. multiple NFT marketplaces are coming to the surface. Here are a few popular ones.

OpenSea:

OpenSea is the largest NFT Marketplace. Its offering includes art, censorship-resistant domain names, Virtual worlds, Trading Cards, Sports, and Collectibles. Visitors can buy/sell the most popular NFTs like CryptoKitties and Decentraland.

Rarible:

This NFT marketplace is owned by the community. The main focus of this platform is on selling art pieces like movies, digital art, music albums, books and Movies.

The active users of Rarible get the RARI token as a reward.

SuperRare:

SuperRare is popular among digital art creators. It is a social platform where visitors can create and purchase crypto art. Listing your art pieces on SuperRare requires some level of scrutiny. Creators have to submit their creation for approval first.

Decentraland:

Decentraland allows users to create, monetize and build their creations from scratch. It is a virtual reality platform powered by the Ethereum blockchain. You can visit Decentraland for purchasing a piece of virtual land also called 'parcel'. The land and creations on top of it are NFTs called LAND.

Atomic Market:

Atomic Market is a marketplace for atomic assets. It is a shared liquidity NFT market. Multiple websites utilize it. Shared liquidity essentially means that things listed on one market will also show up on other markets.

Are NFTs the Next Revolution in Digital Art?

The NFT markets are attractive due to their efficiency and liquidity. Digital art creators can sell their work for more than it's worth simply by tokenizing it. NFT marketplaces charge a minimal fee like 5-10% on transactions. It is helping young digital artists in earning money for their work without involving any intermediaries.

The non-fungible tokens have grown in popularity with more and more people showing interest in purchasing them. This unregulated market has been flooded with billions of dollars over the past few months. Artists are taking advantage of the art like never before.

The tokenized digital art is exclusive, unique and valuable. It allows monetization of old talents. Before NFTs, the unique work of the artists was made freely accessible to anyone on the internet. People could save, share or download work without ever wondering how it will affect the owner of the work. Now the ownership remains intact with a record on the crypto blockchain. Transfer of ownership happens with money. Thus, the artists get paid for their labour.

There is, however, one challenge associated with NFTs. A counterfeit can be easily created of digital art. Resultantly, the artist gets robbed of ownership as well as the money. Nevertheless, this threat is bound to diminish once the NFT market matures.

Closing Thoughts

NFTs are opening new avenues for digital artists. Many people have become millionaires overnight by selling their art for millions of dollars. The structure NFT market is different from the traditional market. You can easily buy NFTs and pay with cryptocurrency. The promising rise of this market has made it worth the hype.

NFTs craze is making some financial analysts call it a bubble. Nonetheless, bitcoin is touted as a bubble after every bull rise. Thus, we will have to wait for a few years to fully grasp the place of non-fungible tokens in the financial world.