Articles in Category 1X1

Cryptography is the theory and practice of sending secure, encrypted messages between two or more parties. Cryptographic processes make it possible to process transactions in digital currency securely and "trustlessly," without the need for clear names, banks, or other intermediaries.

I thought I'd quickly run through what cryptocurrencies like Bitcoin and Ethereum are all about. They're based on decentralised, open-source software called blockchain. Forks are carried out whenever a community makes a change to the blockchain protocol, i.e. the set of rules for a blockchain.

Hedging is a way of managing risk in trading and investing. It's used to reduce the impact of unexpected or unfavourable price movements. Simply put, a hedge is a trade or investment made with the aim of offsetting potential losses in another investment. Derivatives, including options and futures, are often used as a hedge against the underlying asset. Derivatives let you create trading strategies where losses in one asset are offset by gains from the derivative positions. Hedging isn’t without its own set of potential issues and limitations. If you're thinking about using hedging as part of your investment strategy, it's important to understand the pros and cons.

Multi-signature (multi-sig) is a security feature that requires multiple keys to authorise a cryptocurrency transaction. Multi-sig wallets are designed to provide extra protection, especially for organisations or groups that need to keep their digital assets safe. Multi-sig wallets have the potential to be really beneficial, but they also have their complexities and potential risks that users should understand before adopting this solution.

Decentralised finance (DeFi) is a term for peer-to-peer financial services offered via public blockchains, primarily Ethereum.

ERC-20 is a standard for creating assets on the Ethereum blockchain. It sets out how assets should work in the Ethereum ecosystem. ERC-20 assets can represent different digital assets and are used in many applications.

Liquidity mining is a way of getting rewards for contributing cryptocurrencies to pools. It is a DeFi strategy that lets users get rewards from their digital assets. To understand liquidity mining, you need to know about decentralised exchanges (DEXs) and automated market makers (AMMs).

PoW and PoS are used in cryptocurrency networks to validate transactions. PoW involves users solving puzzles to add new blocks to the blockchain. PoS lets users validate transactions based on the number of coins they hold and are willing to stake for network security.

A hardware wallet is a physical device designed to store cryptocurrencies securely offline. It doesn't store the cryptocurrency itself, but the private keys that allow access to the digital assets. Because they're offline and have extra security measures, hardware wallets are often used to store cryptocurrencies.

"Token" is another word for "cryptocurrency" or "crypto asset". However, the term has different meanings in different contexts. The first meaning is all cryptocurrencies apart from Bitcoin and Ethereum. In the second meaning, the term describes digital assets built on another cryptocurrency's blockchain, like many decentralised finance tokens. Tokens can be used for many things, from buying and selling in games to exchanging currencies. You can also trade or hold them like any other cryptocurrency.

Coins are digital assets on their own blockchain. Tokens are digital assets that work on an existing blockchain. Coins are mainly used as a medium of exchange. Tokens offer more functions within a specific project.

BRC-20 tokens are a new type of cryptocurrency. They are a new type of cryptocurrency.