Author Archive David Adamson

Since the time blockchain came into existence in 2009, its innovation has turned out to be not just amazing but even massive with a good blockchain development company building applications going past the domain of digital currencies. The utility aspect of blockchain app development service continues developing, and organizations are picking this innovation rapidly.

Brief roundup on Blockchain

A blockchain is appropriately disbursed records on a commonly open database. It is pretty much linked through multiple desktops or nodes connected across a network, with consensus protocols of cryptography and encryption securing them.

Structure of a Blockchain

A blockchain is comprised of a progression of blocks in an order that is systematically sequential as indicated by the respective blocks. Such blocks contain:

1. Payload data

2. Block with a timestamp

3. An identifiable hash value

4. A hash value of predecessor block

Payload data can be any information such as,

• Distributed ledger transactions

• Smart contract codes

• Stock and inventory records

• Music archives

• Documents or Text

• Photos

• Personal or private information

• Health or wellbeing information

• and more.

A hash value is a series of numbers with an aforementioned length that goes about as a finger impression, or an identifier, for the information contained within each block. The block’s hash value is formed when information on the inside of the block is fed to a cryptographic hash function (CHF), and information is changed even with one character alteration, leading to a new value.

Similarly, assuming information in the block is changed, even somewhat, the value of hash changes, and because each block should contain the past hash value, all of the accompanying block values change. Going one step further, CHFs have an exceptional element of single directional calculation – while it is not difficult to confirm the output by connecting to the input, reverse computation of calculating input from output is impossible.

Along these lines, each block of data is reliant and connected to the predecessor and successor blocks of information, the ones that come before and after it. This makes an exceptionally protected framework, essential for the motivation behind why blockchain is frequently portrayed as “incorruptible”, “immutable,” and “tamper-proof”.

Framing of the Blockchain

How the informational blocks are formed inside the chain is controlled by a bunch of protocols settled upon by the nodes. This arrangement of protocols is known as a consensus protocol.

There are various kinds of consensus protocols, however, two of the most generally utilized are Proof of Stake (PoS) and Proof of Work (PoW). Regardless of what consensus protocol is used, all blockchains are disseminated, implying that all nodes have a similar blockchain copy giving a “single source of truth” all nodes have settled upon.

A blockchain can either be public with a permissionless setting requiring no permissions, implying anybody can mine the blocks; or it can be private with a permission setting requiring permissions, implying only the associated nodes within the network can mine the blocks. Permissioned blockchains might be a superior decision for organizations who wish to receive the rewards of utilizing blockchain innovation and don’t want any outsiders to mine the blocks.

The nodes in a blockchain can confirm transactional exchanges using a private aka secret key (SK) or a public key (PK). PK acts as an address that is quite openly known, while SK is private and simply known to the owner itself.

6 Uses of Blockchain in Software Development

• Digital cryptocurrency and development of blockchain

Miners pick the type of block transactions to execute and afterward, they should address a cryptographic riddle that usually happens via a single server node or farms comprising of thousands of server nodes tracking down the info that will create the ideal hash yield. When a miner has the right information mined and executed, they accomplish Proof of Work (PoW).

As a prize, they get digital coins as an asset. The block then is then circulated and confirmed by different nodes, and at last, added to the blockchain.

Miners can likewise acquire cryptocurrencies utilizing transactional fees as a result of executing blocks on a blockchain. While digital blockchain IoT development is just one aspect, there are other different applications in enterprises and tasks.

• Use in smart contracts

The payload of a smart contract is an agreement written in code, which can be executed automatically once the information requests are met. Like vending machines, such contractual agreements are programmed, as long as the information prerequisites are met.

They are likewise free, since no outsider, is required altogether for the exchange to be executed. Smart contracts could be utilized in any industry or setting that would profit from programmed, autonomous, and quick execution of settled upon contracts.

By and large, two parties consent to an agreement through an outsider, similar to a legal advisor or bank. They likewise depend on outsiders, to execute or maintain those agreements when the terms are not met.

Smart contracts eliminate the requirement for outsiders because the agreement will consequently and freely perform. Also, once positioned in the blockchain, the agreement can’t be changed as smart contracts are savvy, quicker to execute, and better than conventional agreements, making it easier for software development companies to hire blockchain app developer.

• Usage in distributed applications (Dapps)

Distributed applications, or Dapps, are applications that tend to run on a network that is decentralized as you would ask any blockchain development company. They vary from conventional web applications in the sense that backend code doesn’t run on a server that’s centralized, yet are distributed on an apt arrangement of peer to peer (P2P) desktops, but do share a similarity with web applications as UIs and the front end can be written in any code.

• Managing and Securing individual identity information

As most of us are moving more towards the web, our personal information turns out to be vulnerable as it is prone to data hacks and frauds executed by hackers or scammers penetrating confidential records challenging safety-related threats. There are additionally those reaping out some exceptional profits by trading personal data since it is common to see people not realizing the benefits of their information.

Blockchain innovation within any kind of blockchain app development service can give secure and decentralized ID, separate from incorporated elements like government associations or banks. It can likewise make frameworks in which individuals can completely claim their information, and advantage monetarily from that information.

• Money transfer on a global level

A range of blockchain IoT development-based applications have made shared purchasing, selling, and loaning more straightforward, enabling cash flow to move with ease, saving a great deal of time with hassle-free transactions. Current financial frameworks are concentrated, implying that information is put away in a centralized data set rather than just distributed across in banks leading to higher expenses, and can require hours or days to process.

• Internet of Things (IoT) – Summing up discussion with this key application

Blockchain innovation takes into account brilliantly smart gadgets to communicate with one another on a solid distributed network, which could have an extensive impact on the Internet of Things (IoT) development requiring hiring blockchain app developers to do the job. The dispersed and decentralized highlights of a blockchain would permit brilliant gadgets to coordinate and speak with one another more effectively than the previous scenario was.

The first thing most people do when entering the crypto world using a decentralized exchange is to exchange their fiat currency for stablecoins, which can later be exchanged for other tokens. 

However, besides being the most important channels for users to start investing in crypto, stablecoins are also the foundation of the whole DeFi industry—acting primarily as a medium of exchange but also being used for liquidity pools and yield farming.  

Footprint Analytics：Stablecoin Classification

The market cap of stablecoins is still dominated by centralized stablecoins, with USDT occupying half of the market. DAI, the leading decentralized stablecoin, ranks fourth, while UST, an algorithmic stablecoin, follows in fifth place.

Footprint Analytics：Stablecoin Market Cap Share（Nov,2021）

Due to its close relationship with fiat USD, Tether has naturally attracted attention from regulators. There has also been rising concern that the currency’s under collateralization now poses a systemic structural risk. 

However, centralized, decentralized and algorithmic are all different. Are they all equally unstable? Is the fear of stablecoins warranted? Could Tether bring down all of DeFi?

1. Decentralized Stablecoins

USDT, which has a first-mover advantage, is the dominant centralized stablecoin. Its issuance model is that a user sends a certain amount of USD to Tether’s bank account, and Tether will transfer the same amount of USDT to that user after confirming receipt of the corresponding funds.

USDT’s price movements mainly stem from the degree of credit recognition of the issuing company, the depository bank, and the USD by the holders of the stablecoin. 

Tether’s transparency and compliance issues are problems that centralized institutions cannot get rid of. However, the huge number of users and wide use case base accumulated by USDT make people use it anyway. 

USDT’s market cap has been steadily growing, rising to as much as three times what it was at the beginning of the year in early November. USDC, in second place, has less than half of USDT’s market cap, despite being more transparent in its disclosure.

Footprint Analytics：Stablecoin Market Cap（Since Jan,2021） 

Centralized stablecoins rely on fiat currency to keep their projects viable. Compared to decentralized stablecoins, centralized stablecoins are vulnerable to regulation, and the fiat coins stored offline cannot be queried and bound by on-chain protocols. 

Despite the decentralized spirit of blockchain, a large number of key projects, like Tether, are centralized. Why is this problematic?

Imagine if the SEC brings charges against Tether, or if Tether is found incapable of providing sufficient reserves. Users holding USDT will not be protected from losses.

2.Overcollateralized Stablecoins

DAI, MIM, LUSD

MakerDAO, which launched in 2018, has led the way in the development of overcollateralized stablecoins. As a result, DAI has become the market cap leader for this category of stablecoins. Although Liquity, which went live in 2021, innovated and improved on MakerDAO, the lack of use cases for its stablecoin, LUSD, has limited its adoption. 

Abracadabra, which has a model similar to MakerDAO, has grown rapidly in two months with its interest-bearing tokens collateral, and the market cap of its stablecoin, MIM, has surpassed that of LUSD, which was one step ahead of it.

Footprint Analytics：Over-collateralization Stablecoins Market Cap（Since Jan,2021）

Collateral

Overcollateralized stablecoins mint $1 worth of stablecoins by depositing collateral worth more than $1. The collateral can therefore be other tokens that are not stable in their own way such as ETH, protocol tokens, and LP tokens. Such stablecoins are on the same chain as the collateral and the main risk comes from the fluctuation of the value of the collateral, so the liquidation mechanism of such protocols is particularly important.

On the collateral side, MakerDAO has introduced centralized assets such as USDT and USDC since March 2020, and doubts have grown about whether DAI is decentralized enough. The risks of DAI are tied to centralized stablecoins.

Liquity, a protocol whose only collateral is ETH to mint LUSD, strives to be decentralized in all aspects and has better capital utilization and liquidation mechanisms.

While Abracadabra’s core mechanism is similar to MakerDAO, allowing collateralized interest-bearing assets, it is more like a more aggressive MakerDAO deployed in multiple chains with more collateral, which allows its stablecoin, MIM, to grow rapidly, but also implies a higher risk.

Volume

The daily trading volume of DAI far exceeds that of all other stablecoins, mainly because DAI, as an early cultivator, can be supported on various protocols.

LUSD, due to its incentive mechanism, has more than 60% of stablecoins circulating within its own system, supporting fewer external use cases.  Even MIM’s trading volume far exceeds that of LUSD.This is mainly due to the fact that Abracadabra offers the ability to increase leverage by way of flash loans, as well as increasing the liquidity of MIM on Curve by incentivizing its token, SPELL.

Footprint Analytics：Over-collateralization Stablecoins Volume（Since Sep,2021）

Stability

In terms of stability, MakerDAO regulates the supply and demand of DAI through a stability fee and DSR (Dai Savings Rate), which affects the price of DAI. However, these adjustments are based on a vote by holders of MKR, the tokens issued by MakerDAO. Most MKR is held by early investors and large investors.

Even with these MKR non-centralized holdings, such adjustments are similar to central bank monetary policy—e.g. adjusting reserve ratios, benchmarking interest rates, etc.— except with a low threshold to vote. This has raised questions about the governance model’s fairness and prudence. 

Liquity maintains the price of LUSD through a “hard anchor” that opens up arbitrage opportunities to the entire market using a redemption mechanism, and a “soft anchor” that allows users to mint LUSD at $1 and burn LUSD at $1 at any time.

Abracadabra’s stabilization currency, MIM, is similar to DAI in terms of stabilization mechanism, and the minting rate is used to regulate the cost of funding of MIM, thereby affecting the balance of supply and demand.

Using Footprint Analytics data, we can see that DAI is the most stable in terms of price fluctuation. LUSD is relatively stable except when the price is slightly higher when it first came online. MIM is also relatively stable between $0.97 and $1.01.

Footprint Analytics：Over-collateralization Stablecoins Price（Since Jan,2021）

3. Algorithmic Stablecoins

UST, FEI, FRAX

Algorithmic stablecoins keep their value by incentivizing the market to speculate on tokens using their own protocols. The advantage is primarily that the uncollateralized mechanism allows for higher capital utilization, but can easily move the price out of anchor if the market does not arbitrage as the protocol is expected to be designed.

The standout among algorithmic stablecoins is Terra’s stablecoin UST. Terra uses a dual token model, with Luna, a token primarily used for governance, staking, and verification, and UST, a native stablecoin anchored to USD. UST is backed by Luna, and for each UST minted, one dollar worth of Luna must be burned, and Luna maintains the anchoring of UST to USD through an arbitrage mechanism.

Fei Protocol, which set a new fundraising record in DeFi, is also noteworthy. It minted $2.4 billion in market cap in one week since launch, then instantly fell to $500 million in three months. Fei anchor adjustment mechanism, based on PCV (protocol controlled value) and Ethereum’s redemption mechanism, maintains stability. Fei Protocol intends to solve the problem of inefficiency and difficulty of expansion of over-collateralized stablecoins, but community pressure has forced constant modifications of its mechanism after launch. It now uses the Peg Stability Module mechanism, similar to DAI.

Footprint Analytics：Algorithmic stablecoins Market Cap（Since Jan,2021）

Volume

UST tops other algorithmic stablecoins in terms of trading value, although there is still a big gap from the overcollateralized stablecoin DAI. Currently, UST is comparable to MIM in market cap.

The active volume of UST is mainly attributed to the fact that the entire Terra protocol is set up around its original stablecoin. Terra’s protocol has been equipped with UST transaction scenarios since its inception, and UST can be connected to offline payments, which in turn stimulate the demand for UST usage.

Footprint Analytics：Algorithmic stablecoins  Volume（Since Sep,2021）

Stability

Since the stabilization mechanism of UST is based on the promise to pay out with Luna, it is essentially backed by the promise of Luna rather than being an overcollateralized stablecoin proper. Based on trust in Terra as a whole, arbitrageurs will ensure the stability of UST through arbitrage behavior. If the price of Luna drops drastically, an anchoring crisis will occur as users lose faith in the market value of Luna.

The price of UST has been relatively stable, with the only de-anchoring occurring in May when the token price plummeted. This compares favorably to Fei, which has been live for more than half a year and experiences two serious de-anchors. In the first occurrence in early April，when Fei first went alive, Fei’s usage scenario was not enough to support the required minting, creating an imbalance between supply and demand. May’s de-anchoring mainly came from a big drop in token prices triggering distrust among users.

Footprint Analytics：Algorithmic stablecoins Price（Since Jan,2021）

Conclusion

The three types of stablecoins have their own unique advantages and disadvantages. 

• Centralized stablecoins：
  • Advantage: Largest market cap due, creating relative stability and a wide range of use cases
  • Disadvantage: The centralized security and lack of transparency is ripe for enormous abuse that poses a systemic risk to the whole system
• Overcollateralization stablecoins：
  • Advantage: Relative price stability due to overcollateralization
  • DisadvanageL Low capital utilization
• Algorithmic stablecoins：
  • Advantage: Maintain stability by incentivizing the market to arbitrage the stablecoin, solving the problem of capital utilization
  • Disadvantage: Potential for volatility in times of uncertainty.

Stablecoins an integral part of DeFi as a medium of exchange between assets. They do not have a strong backing like fiat currencies, and you should consider their security, stability and breadth when to use. 

The above content represents the personal views and opinions of the author and does not constitute investment advice. If there are obvious errors in understanding or data, feedback is welcome.

No more fans will have to ruffle through the crowd to get their favorite celebrities’ autographs or celebrity-featured merchandise. They can just tap into the NFT marketplace that features NFTs of celebrities. As the NFT marketplace is experiencing roaring growth these days, researchers and analysts predict that the marketplace will not be abated.

Will The Craze For NFTs Leap Forward, Or Deteriorate?

Though there isn’t an exact answer for this, we can speculate that the more the number of celebrities and corporates enter this sphere, the more will be the growth. Some of the famous brands have already stepped into this sphere by launching their iconic NFTs.

In this category, brands like Arizona Tea and Coca-Cola have launched their NFTs, which were released a few months ago. Arizona Tea is a beverage company based out of the US. They are popular for their tea mixes, energy drinks, and iced tea cocktails. Just last week, Arizona came up with its NFT, which is a comic-based one, in collaboration with Bored Ape Yacht Club.

The NFT arts of Arizona feature three bored apes, and one of them holds the iced tea can of Arizona. And notably, the number of collections available with them is limited to 10,000.

Similarly, Coca-Cola, too, has released its NFTs, which is quite interesting and makes sense. Basically, Coca-Cola’s NFT is a lot, which means it is a pack of non-fungible tokens.

Previously It Was OnlyFans And Now It’s NFT

These days, technology is holding a high hand on every aspect of our lives, which has become favorable for us. Alright! When the lockdown restrictions with respect to the pandemic were intense, celebrities and artists were struggling to find a source of monetization. That was when celebrities and talented artists explored the benefits of OnlyFans.

Artists and celebrities worldwide eyed OnlyFans as a platform where they can make money as well as keep their audience intact. On this platform, they can create and distribute different forms of content like images, videos, etc. For the majority of the days during the lockdown, this platform was the source of income for many artists (who were quite skilled in using it).

And now, celebrities and a horde of artists have started thronging towards the NFT trading platform. Notably, celebrities can sell any form of content that circles around them. For example, they can create NFTs that feature their movie collections or even their personal life. But there must be a high degree of rarity in each of the collections, and of course, that’s the definition of a non-fungible token.

What’s Brewing Up In The NFT Trading Platform Recently?

Amitabh Bachchan, the favorite actor for many and the amorously called Big B, has been the center of talk for the time he made his announcement on his NFTs. This news on the actor’s NFT collection appears on the news not just because he is a famous actor but also because he is the first actor in Indian cinema to move into the NFT space.

If you aren’t completely aware of his venture or holding a little bit of information about it, then here is the detailing. Amitabh, one of the most celebrated actors, has tied up with a Singapore-based NFT marketing and media management company Rhiti Entertainment to disclose his NFTs.

And now, the question would be about the types or categories of his collections. His collections range from voice notes to images. A special type of image called Big B punks, which are generated with respect to certain algorithms, is also one of the collections that reside in the collections.

Though the news on Amitabh Bachchan’s NFT collections is amplifying, we have to wait and watch whether the sales will satisfy the hype. However, on a broader scale, Big B’s historic venture into the non-fungible trading marketplace is believed to accelerate other actors worldwide, thereby bringing in more investors as well as creators.

Can You Expect More Such Celebrities?

A definite yes. In fact, two of the famous Bollywood actors Sunny Leone and Salman Khan, are in the pipeline to launch their versions of NFTs. While Amitabh Bachchan NFT is getting released on the NFT launchpad called BeyondLife.club, Salman Khan will release his collections on Bollychain, a platform that is exclusively developed for trading digital arts related to the film industry.

Another notable personality of the Bollywood industry Manish Malhotra, a costume designer cum filmmaker, has already released his NFTs (digital sketches), which were sold for $4000 (one piece) and another piece ranging from $2054 to $2535.

Conclusion

As the saying goes, “the future is unpredictable,” we have to watch the space to witness whether NFTs will sustain or the other way around. And heading back to square one, autographed Amitabh Bachchan’s NFT Physical Posters, BigB Punks, and NFT Arts will be shortly up for sale. Take a crack at the auction!

Cryptocurrency has certainly become a global phenomenon over the past few years. But still, there is a lot to learn about this evolving technology. There is an array of concerns as well as worries whirling around the technology and its potential in disrupting the traditional financial systems. Very recently, a professor at the Stanford Law School, named Joseph A. Grundfest, sat down to discuss the following. 

1. How is cryptocurrency currently being used?
2. Where have mistakes been made?
3. What the future holds for this technology?

As an expert on financial systems and the former commissioner of the Securities and Exchange, Professor Joseph A. Grundfest is in a unique position to shower his comments on the future of cryptocurrency.

An Idea About Cryptocurrency

For the ones who do not have a clear idea about cryptocurrency, they should know that it is a digital currency that is created as well as managed via the use of advanced encryption techniques referred to as cryptography. It is a virtual currency that is designed to work as a medium of exchange where the records of ownership are kept in a ledger that exists in the form of a computer database. The database to store records makes use of very strong cryptography for tightly securing records controlling the creation of additional coins, and appropriately verifying the ownership of coins. 

Like paper money, cryptocurrency does not exist in physical form. Moreover, it is typically not issued by any central authority. When a cryptocurrency is created or minted before issuance or issued by a single issuer, it is generally considered centralized. But at the time of implementation with decentralized control, each of the cryptocurrencies works via a distributed ledger technology, usually a blockchain that serves as a database for public financial transactions.

The Rise of Cryptocurrency

Cryptocurrency made a big leap from being only an academic concept to virtual reality with the creation of Bitcoin in the year 2009. The virtual currencies became popular in the financial system since their inception only over a decade ago in the year 2009 with the creation of Bitcoin by Satoshi Nakamoto. 

But several disagreements within the community of Bitcoin led to its schism and followed by the launch of Bitcoin cash along with the appearance of a few other decentralized e-currencies that further fragmented the landscape of digital payments as a whole. For example, we can consider the creation of the first ‘sharia-compliant currency’ in Dubai in the year 2017 and pegged to the price of gold. 

While Bitcoin gained a lot of popularity in subsequent years after 2009, it captured significant attention of the investors and media in the year 2013 in April when it reached to a record price of 266 dollars per Bitcoin after rising about ten times in the preceding two months. 

Bitcoin displayed a total market value of more than about two billion dollars at its peak, but a 50% dive down shortly thereafter gave rise to a raging debate about the future of Bitcoin in particular and cryptocurrencies in general. The investors are particularly lured towards Bitcoin by the high speculative potential of such virtual currencies as well as their ability to be exchanged for cash in several cases. But their value remains extremely variable with sudden rise and fall which is precisely the reason for hesitation among the investors.

A number of specialists are quite worried about the lack of transparency in their process of issuance, which is unregulated. There is no regulatory authority that supervises the issuance of cryptocurrency. In addition to this, there are a number of people who are quite suspicious of their true value and doubt the asset’s decentralized nature. 

In fact, there has been a rise in the popularity of ICO or initial coin offerings. ICO is a modern form of IPO released by the fintech companies for the purpose of crowdfunding new cryptocurrencies. This, in turn, has been propelling the virtual currencies’ prices in an upward direction. At present, there are more than about 50 ICOs launched every month. It is because of the fact that there is no regulation or scrutiny. Moreover, the investors are quite often not properly informed and hence have fallen victims to scams in several cases.

Cryptocurrency is now a very hot topic of discussion and has gained tremendous popularity in the last few years of time. More and more investors are ready to invest in cryptocurrencies especially Bitcoin, and Ethereum along with many more. As per the current trend, cryptocurrencies are expected to rise further in the time to come. 

The Fact About These Trustless Systems 

The ones favoring Bitcoin as well as other cryptocurrencies claim that these financial platforms are inherently trustless systems. It means that they are not directly attached to any nation, state, country, government, or body. They would also argue that cryptocurrency is much more superior as compared to the traditional physical currencies because it is not dependent on any regulatory authority. 

Professor Joseph A. Grundfest notes that irrespective of the fact whether cryptocurrencies are thought to be good or bad, it is not completely accurate. Cryptocurrencies are not really trustless at all. They are still dependent upon the underlying infrastructure that powers different cryptocurrencies like Bitcoin, Ethereum, etc. a major portion of which is located in the nation of China. The government of China could theoretically make amendments to cryptocurrencies at a fundamental level by striking its will on the data miners who keep them running.

What Future has in Store for Cryptocurrencies?

Predicting the future of the world of cryptocurrency might be the most difficult of tasks even for the most proficient experts in this field. The pool of cryptocurrencies is rising but we are not sure as to whether these payment tools would be truly responding to the precise needs of being a currency. There are some economic analysts who predict a big change in cryptocurrency as institutional money makes an entry into the market. There also exists the possibility of cryptocurrency floating on the NASDAQ. This, in turn, would enhance the credibility of blockchain further and its uses as an alternative to the traditional currencies. 

On the other hand, there are some who predict that cryptocurrency needs a verified ETF or exchange-traded fund. An exchange-traded fund would certainly make it easier for people to invest in cryptocurrencies. In spite of this ETF, there still needs to be the demand among the people to invest in cryptocurrency and this demand may not be automatically generated with the help of a fund. Cryptocurrencies are an intuitive result of the digitalization of the world. But the future of cryptocurrencies is dependent upon a wide array of factors listed below.

• Stability
• Security
• Transparency
• Users’ confidence

Additionally, the hacking attacks happen to be the most significant threat that might be leading to their complete abandonment by the wary users. The governments of several countries of the world are still hesitant to entirely accept cryptocurrencies. Many are of the viewpoint that cryptocurrencies can be an asset but never a currency. Thus, nothing can be specified about their future with certainty. So, there is still a big question mark on whether these alternative currencies will eventually supplant the conventional currencies or not or whether cryptocurrencies are a passing trend that will fade away with the passage of time.

Libra is Rising

Bitcoin, one of the most popular cryptocurrencies, might be ruling the world of crypto for five more years. But the giant in the crypto market might be looking over its shoulder as a few stablecoins such as Facebook’s Libra are starting to make their presence felt in the world of crypto. The contribution of Facebook to the world of cryptocurrency is Libra. It has been hyped as the appropriate answer to a wide range of financial issues. The platform was particularly designed to facilitate international payments along with the elimination of unnecessary transaction costs as well as other fees.

Professor Joseph A. Grundfest concedes that the goal is admirable, but at the same time, he believes that the approach is deeply flawed. According to him, the introduction of another cryptocurrency is not the right solution for the purpose of minimization of payment transactions. Moreover, he does not agree with the attempts from Facebook to completely dodge the traditional banking systems. 

Instead, he puts forward an argument that it would have been a better approach by Facebook to create its own bank which in turn could act as the primary institution for its users. The professor also said that Facebook could have focused more on developing banking systems customized to each nation or region, appropriately addressing each of the regulatory demands and driving down costs. He said that once these have been established and the trust of the public was built, it would make sense to easily link each of them for the creation of a global network. 

It is quite reasonable to expect that stablecoins will be preferred by a considerable volume of users as we progress through the 2020s. The stablecoins tie their values to some of the tangible real-world assets such as the US Dollar and gold. It means that they are almost sure to be free from the volatility of the market that we tend to see around cryptocurrencies like Bitcoin and Ethereum. The feasibility of stablecoins driven by blockchain integrated with their settled values will mean that there will be a wide range of applications for this new brand of cryptocurrency. At present, Tether is the biggest stablecoin with a market cap of about 4 billion dollars.

Is Stablecoin the Future?

Stablecoins have gained a lot of popularity in recent times as a way to support cryptocurrency with assets that hold real value. It is very much in the same way the currency of the United States used to be on the gold standard. Those assets can be other currencies or commodities or virtually anything. Professor Joseph A. Grundfest has two issues with this approach that are listed below.

1. It actually recreates a system that is already existing.
2. It would make it easier for users to commit fraud since it is not quite as easy to audit and monitor as the traditional currencies. 

In his comments, the professor also covered some stronger applications for cryptocurrency. For example, it might be a better option for the people residing in countries that have weak currencies to invest in cryptocurrency like Bitcoin as compared to investing in the local stocks and bonds. The future outlook of cryptocurrency is still an unanswered question. The supporters in favor of cryptocurrency see endless potential, while on the other hand, the critics see nothing but the only risk. Professor Joseph A. Grundfest in this regard remains quite skeptical but he does concede that there are a number of applications where cryptocurrency is undoubtedly a viable solution.

Is Investing in Cryptocurrency a Good Choice?

Investing in cryptocurrencies might be the best way to treat your investment. It is in the same way as you would be treating any other highly speculative venture. But it is of immense importance to always keep in mind the high volatility of cryptocurrency where you run the risk of losing most of your investment if not all. 

As mentioned earlier, cryptocurrencies hold no intrinsic value. It is just the value that a buyer is willing to pay for it at a given point in time. It is precisely the reason why cryptocurrencies are very much susceptible to huge swings in prices. This, in turn, readily increases the risk of loss for an investor. For example, during the early days of Bitcoin on the 11th of April 2013, its value was down to half from 260 dollars to 130 dollars within a timespan of just six hours. 

If as an investor you are able to digest that kind of volatility, it would be a good choice to invest in cryptocurrencies. Otherwise, it would be ideal to look for other investment options that best suit your profile. The opinions on the merits of investing in cryptocurrencies are deeply divided. The supporters point to its limited supply as well as growing usage as value drivers. On the other hand, the detractors see it like just another speculative bubble. So, it is completely up to the investor to invest in any cryptocurrency or not. 

Conclusion

Cryptocurrencies aspire to become a part of the mainstream financial system for which satisfying very divergent criteria is essential. Though this possibility looks remote, there is little doubt that the success or failure of cryptocurrency in dealing with the challenges might be the determining factor in their fortunes in the time to come. All we can do is wait and see what the future has in store for cryptocurrencies.  

When it comes to cryptocurrency, there is no one-size-fits-all approach. Fortunately, users have options regarding which digital coins they want to invest in and whether they’re more interested in trading or mining.

However, one topic tends to spark fierce debates in the Bitcoin community – the Bitcoin wallet. The discussion primarily revolves around the question of whether custodial or non-custodial wallets are better.

Both have advantages and disadvantages worth considering. Before you open a Bitcoin wallet account, it’s imperative to know all the relevant information about the two types of digital wallets – custodial vs. non-custodial wallets.

What Is a Custodial Bitcoin Wallet?

The basic premise of a custodial Bitcoin wallet is that a third party controls the private keys. Essentially, users are placing their trust in another entity, usually crypto exchange platforms.

Many first-time Bitcoin investors have relied on a custodial wallet at some point. If you create an account with well-known exchanges such as Coinbase or Gemini, you’ll have an opportunity to utilise a custodial wallet. It’s all a part of their service.

They want to protect your funds and will make every effort to do so, as it’s in their best interest as well. Custodial crypto wallets are often called hosted wallets by users.

Undoubtedly, custodial wallets relieve users of personal responsibility for their funds. Some will see this fact as a plus and others as a major red flag. Furthermore, custodial wallets are typically web-based, which, unlike hardware wallets, require a continuous internet connection.

Advantages of Custodial Bitcoin Wallet

In the crypto community, custodial wallets don’t have the best reputation. But it’s not because they’re considered unsafe. It’s the fact that the user doesn’t hold their private keys and essentially isn’t in charge of their funds entirely. To some, this lack of control is unacceptable.

To others, it’s precisely why they appreciate custodial wallets. The private key is the only way to access the money you’ve earned, but what happens if you can’t remember it?

It means that your Bitcoins are lost forever. That doesn’t happen with a custodial wallet, as exchanges take precautions to ensure you never lose access to the fund.

In general, custodial wallets are also a safer option as they provide better security against malware and phishing scams when it comes to web-based wallets.

There are a few downsides worth considering too. First, some exchanges require you to use their wallets. And the fact that you don’t hold the private keys means they can take your assets if they choose to do so.

What Is a Non-Custodial Bitcoin Wallet?

With non-custodial wallets, users have complete control of their private keys and funds. Typically, when users accumulate considerable amounts of Bitcoin in their exchange accounts, they want to open a Bitcoin wallet account of their own.

Naturally, the presence of a third party is cumbersome when you become savvier about Bitcoin. However, in contrast to custodial wallets, where you had to trust the platforms that provide them, with non-custodial wallets, you have to trust yourself to keep them safe.

If you’re using hot wallets, that means being mindful about the security of your internet connection and the health of your devices. You might have to use a VPN service or backup your wallet with a recovery phrase, known as the “seed phrase.”

Advantages of Using a Non-Custodial Bitcoin Wallet?

The most prominent reason non-custodial crypto wallets are the more popular choice is that they give users freedom and control. Freedom to choose the wallet they want and full control of their funds.

That’s not an insignificant advantage, especially when we consider that the appeal of cryptocurrency revolves around the fact that it’s a decentralised system without third-party involvement. Furthermore, a non-custodial wallet is not exclusively web-based.

If you want better security and to manage your Bitcoins offline, you can choose a hardware wallet. Selecting a hardware wallet also means having full access to staking rewards from your holdings.

But the notable downside is that trading will be slower as funds need to reach the exchanges first. Plus, user interfaces are typically less user-friendly.

Relinquishing Control: Yes, or No?

There are plenty of arguments why custodial wallets are the prudent choice, especially if you’ve only started with Bitcoin. But the deeper you get into the matter; you’ll likely prefer having a non-custodial wallet.

Some users appreciate a helping hand from a third party, and others dread it entirely. When it comes to everything crypto-related, there really is no uniform approach. Custodial isn’t better than non-custodial and vice versa. Both are simply options that can play a role in your Bitcoin career.

“HODL” is a misspelling of “hold,” which is an attempt to avoid the impulse to panic sell when Bitcoin prices drop. It is often used in online cryptocurrency forums or in the comments section of Youtube videos that discuss Bitcoin trading.

The term “HODL” originates from a cryptocurrency forum post entitled “I AM HODLING” made in 2013.

The community that was rapidly growing around Bitcoin at the time had grown accustomed to seeing prices go up, and when the price suddenly began falling due to an unexpected government announcement, many were caught off guard.

Bitcoin is a revolutionary invention that has already changed the world of finance and will continue to do so. The original purpose of this paper was to present an unbiased view of what Bitcoin is, how it came about, and where it’s going. However, since I believe that knowledge without action leads nowhere, I encourage you to take some time off from reading this paper and go try out bitcoin for yourself. Find a friend who owns some bitcoins and buy some for yourself on their recommendation.

What is Hodling?

HODL is a term used in the digital currency world that means holding on to your coins or tokens rather than selling them. The idea of HODL came from a drunk post on Bitcoin Forum about bitcoin not being able to be traded but only held for future use.

A Bitcoin maximalist is someone who holds that Bitcoin has the greatest chance of success in the cryptocurrency market. A bitcoin maximalist believes that a certain protocol, such as Bitcoin’s blockchain, will dominate all others and become a standard across markets.

Is HODL A Good Investment in Cryptocurrencies?

While the word HODL is a frequently used slang in the cryptocurrency world, it has been criticized for being a bad advice. HODL does not mean anything in terms of investment strategy, but some people consider it as a bullish sign when they see the term in crypto forums and communities. However, there are already some critics who believe that HODL can be a good way to lose money.

What is the HODL strategy?

The HODL strategy is based on investment in cryptocurrency without the intention of selling. The investor believes that the value of the cryptocurrency will increase over time, which will result in profit when it is sold at a higher price.

HODL Risks: The thing that worries me the most about HODL is that 80% of all “crypto” tokens on the market today are outright scams, and the people.

HODLers will also have other criteria for selecting an exchange. One of the most important factors is that the exchange is safe. There are several ways to determine this. First, exchanges that are not regulated are often unsafe because they do not have to disclose company information. Second, exchanges with low fees tend to be unsafe because they cannot provide adequate security for user funds.

Conclusion

HODL is the opposite of FUD. While FUD is used to drive fear into investors, HODL is used to drive hope into them. Why are some people using this term? Because they are trying to encourage others not to sell their cryptocurrencies during a downturn in prices.