Thumbnail What is Avalanche AVAX cryptocurrency and is it a good investment

Avalanche (AVAX) has been touted a potential Ethereum-killer, meaning it has the potential to outperform and replace Ethereum as the dominant smart contract token.

This token aims to change the way people send money around the world by providing both speed and security that other cryptocurrencies don’t have.

Avalanche has been around for a much shorter period of time compared to Bitcoin and Ethereum, but it already has millions of users across the world.

In addition, it is highly secure, fast, and easily scalable.

But will it be good enough to emerge the winner?

In this blog post, I’m going to cover everything you need to know about Avalanche, including how it works, why it’s so popular, and whether or not it’s worth investing in right now.

 

Infographic What is Avalanche AVAX stablecoin and is it a good investment

 

What is Avalanche (AVAX)?

Avalanche is basically a next-generation blockchain platform that enables rapid and secure transactions.

The platform is based on a unique consensus algorithm that allows for the instant finality of transactions.

The project has a team of experienced developers, computer scientists, and business professionals that are aiming to bring blockchain technology into the mainstream by creating an easy-to-use platform that anyone can use.

How Does Avalanche (AVAX) Work?

The project was built on the Ethereum blockchain and uses the ERC-20 token standard.

This means that all transactions are recorded on the public ledger and are freely available for anyone to view.

You can use AVAX (the native token of the Avalanche platform) to send or receive payments or to mine various cryptocurrencies.

There are two ways you can use AVAX tokens: You can send them in transactions with other users, or you can use them to mine various cryptocurrencies.

Users will be able to purchase AVAX tokens through a variety of methods, including credit cards, bank transfers, and cryptocurrency wallets.

What Makes Avalanche (AVAX) Different?

Avalanche is a cryptocurrency that is different from other cryptocurrencies in several ways.

1. High Scalability

AVAX is designed to be more scalable than other cryptocurrencies.

It can handle a larger volume of transactions compared to other cryptocurrencies, and it can also support a much larger number of users.

Furthermore, Avalanche is more decentralized than other forms of cryptocurrencies.

The transaction speed on Avalanche is much faster than mainstream cryptocurrencies like bitcoin, which means that you can send money instantly without having to wait for confirmations.

2. New Consensus Algorithmn

It uses a new consensus algorithm called Avalanche that is different from the proof-of-work algorithm used by Bitcoin and Ethereum.

The idea behind Avalanche is to come up with a way for nodes to reach a consensus on transactions without having to rely on expensive computations like those required by proof-of-work algorithms.

3. Built-in Governance System

Avalanche has a built-in governance system that allows users to vote on proposals to improve the network.

This means that developers can implement changes by changing how nodes validate transactions without having to hard fork.

4. Built-in Privacy

It also has a built-in mechanism for privacy.

This built-in mechanism helps to protect the identities of users and prevent censorship by governments or other entities.

In addition, Avalanche is compatible with Ethereum’s ERC-20 token standard, meaning that it can be simply continued as a base layer for other applications to build on.

5. Proof of Capacity

Finally, Avalanche is built on “Proof of Capacity” instead of “Proof of Work.”

This means that miners don’t have to use expensive, power-hungry computers to verify transactions, which makes it quick for anyone with a computer to be able to participate in the network.

In addition, Avalanche uses a “delegated proof of stake” consensus mechanism, which means that token holders can vote for delegates to maintain the network.

Reasons to Invest in Avalanche (AVAX)

Avalanche is a cryptocurrency that was created in 2020 and is well-known among investors.

Even though it is relatively new compared to Ethereum and Bitcoin, it has managed to grow to a large market cap within a short period of time.

So, let’s check out the reasons why investors think it is a good choice:

1. Smart Contracts

One important reason is its support for smart contracts, which allows developers to create applications on top of the Avalanche platform.

So, this means that Avalanche has a huge potential for growth.

In addition, it is also capable of creating decentralized applications (DApps) on top of the Avalanche platform, which opens up many possibilities for developers to build and deploy their own DApps.

2. High Liquidity & Security

Next to all of this, Avalanche is also a great investment option because it offers high liquidity.

This means that you can easily convert your tokens into cash whenever you want to sell them or transfer them to another wallet.

Furthermore, Avalanche also offers a lot of security.

This is because it uses blockchain technology to store all data, which makes it hard for hackers to access your information and steal your funds.

3. Easy to Use & Scale

Another advantage of the Avalanche platform is that it’s easy to use.

This means that developers can build DApps on top of the Avalanche blockchain without any need of technical knowledge about coding or software development.

This will make it more accessible for a wider range of people and companies to create and use their own DApps.

In addition, the Avalanche platform is also easy to scale, which means that it can compass a high transaction volume without slowing down or crashing.

4. Proof of Stake

Finally, the Avalanche consensus protocol is secure.

It uses a proof-of-stake model, which means that the Avalanche network depends on its users to verify the transactions and add new blocks to the blockchain.

As long as you have some tokens in your wallet, you can help maintain this network by staking them and earning more coins in return.

How to Buy & Store Avalanche (AVAX)?

Here’s a quick summary on how to buy and store cryptocurrencies safely:

  • Choose a reputable cryptocurrency exchange that supports AVAX, like Binance or Coinbase.
  • Open an account with the crypto brokerage.
  • Deposit fiat currency into your exchange account.
  • Buy needed AVAX with your fiat currency.
  • Store AVAX in a secure and offline wallet.

The Future of Avalanche (AVAX)

AVAX is a good potential long-term play because the company has a strong team and is making significant strides in its development plans.

In. addition, the AVAX token has a lot of potential.

As the company focuses on its technology, it will need to expand its user base and increase the adoption of the platform.

The more people who use it, the higher demand there will be for AVAX tokens.

Furthermore, the company plans to integrate its technology into other areas, such as e-commerce and biometrics.

If it succeeds in these pursuits, the demand for AVAX tokens could increase dramatically.

Concluding Thoughts

Overall, Avalanche (AVAX) is a very promising company that is well-positioned to capitalize on the growing demand for cybersecurity solutions.

It has a strong team and an impressive list of partners, which will help drive the adoption of its technology and increase the value of its token in the long term.

So, if you’re looking for a cryptocurrency that has a lot of potentials and could be an excellent investment for the long term, then AVAX is definitely one to consider.

Now that you know all about the Avalanche (AVAX) token, would you consider investing in it?

Do you think it has the potential to emerge as the dominant token for smart contracts?

Let me know in the comments below.

 

thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail What is Tether USDT and is it a good investment

Entering the world of cryptocurrencies is like stepping into a new dimension, with products such as stablecoins, NFTs, DeFi, Bitcoin, and many more coming out every single day.

It’s hard to keep up with everything, even for the most experienced traders. That’s why it’s important to know what you’re doing and where you’re headed before jumping in.

One of the most interesting but underrated products on the market today is stablecoins.

For those who don’t know, a stablecoin is a cryptocurrency that is pegged to an asset with a stable value.

The most popular and well-known stablecoin is Tether (USDT).

In this blog post, I’m going to cover the basics of stablecoins, before going in depth on what Tether (USDT) is, how it works, and whether or not it is a good investment.

 

Infographic What is Tether USDT stablecoin and is it a good investment

 

What is a Stablecoin?

A stablecoin is simply a digital asset that is pegged to a stable asset, such as the U.S. dollar.

The main advantage of a stablecoin is that it allows traders to avoid the volatility of the crypto markets while still enjoying the benefits of blockchain technology.

Also, with stablecoins, you can be sure that the value of your money will not fluctuate.

Why are Stablecoins Useful?

Stability is one of the essential features of any currency.

If a currency’s value fluctuates too much, it is impossible to use it in everyday life.

Stablecoins are pegged to an asset that is highly stable and unlikely to experience rapid changes in price over short periods.

Their stability makes them useful as a holding currency for saving, investment and transactions.

Now that you are armed with the right information about stablecoins, let’s move on to Tether (USDT).

What is Tether (USDT)?

Tether is a digital currency introduced by Bitfinex, a cryptocurrency exchange platform.

It is a tether-based stablecoin pegged to the U.S. dollar.

In simple words, one USDT is equal to one U.S. Dollar.

This means that if you have one Tether coin, then its value will remain the same, and you can use it as a substitute for USD currency.

The main function of Tether is to provide a stable alternative to traditional cryptocurrencies, which tend to be more volatile.

This helps  protect you from market volatility, so if you are worried about the security of your funds, then you can use Tether as a safe haven to hold your funds.

How Does Tether (USDT) Work?

Tether (USDT) works in the same way as other cryptocurrencies do.

You can transfer your Tether coins to another person or use them to purchase goods or services.

You can also store your USDT in a digital wallet, which is similar to a bank account.

As with other cryptocurrencies, all transactions for USDT are recorded on the blockchain and cannot be counterfeited.

Furthermore, the company behind Tether guarantees that every USDT is backed by a U.S. dollar held in reserve.

This means you can always redeem it for the cash value of the currency.

If you want to convert your USDT back into fiat, all you need to do is contact customer support and request a refund.

Reasons for Investing in Tether (USDT)

As we all know, Tether is one of the most popular stablecoins on the market.

It offers investors a secure alternative to volatile cryptocurrency investments while also providing opportunities for arbitrage and hedging.

Here are some of the smart key reasons why you should invest in Tether:

1. High Stability

Tether is a highly stable coin, so you know what you’re getting in terms of value.

It doesn’t fluctuate much and can be used for a variety of purposes, including as an investment, a store of value, or simply as a means to pay for goods and services online.

This makes it a go-about choice for those who want to protect their wealth from market volatility while still having access to the benefits of blockchain technology.

2. Transparent

Tether is very transparent in its accounts and reserves, and it has audited financials provided by Tether Limited.

No doubt Tether is one of the most transparent cryptocurrencies on the market today.

The company provides an audit report that details how much USDT there is in circulation and where it came from, which means you can rest assured your money isn’t being used for anything unethical.

3. Liquidity

The next most important thing to look for when choosing a stablecoin is liquidity.

When you want to convert USD into Tether, and Tether back into USD, it should be easy and quick.

You don’t want to have to wait days or weeks for your money!

Tether has maintained high levels of liquidity since its inception in 2014, which means you can be confident that you’ll be able to cash out of USDT whenever you need it.

4. Accepted on Many Exchanges

Many exchanges accept Tether, so it’s easy to trade with other cryptocurrencies.

Tether is the most widely accepted stablecoin in the world.

Many exchanges accept Tether as a way to deposit funds, so if you want to buy other cryptocurrencies like Bitcoin or Ethereum, you can deposit USDT into your brokerage account, then use that to buy other cryptocurrencies.

5. Security

Tether is 100% transparent, which means that you can see all of the transactions on their website.

This is paramount because it makes it easy for people to know how much money there is in circulation and how many tethers are being held by each exchange.

6. Reliable

Tether is a reliable cryptocurrency because it’s one of the most stable in the market.

It doesn’t fluctuate like other cryptocurrencies, which makes it great for people who want to make long-term investments or get stable yields via yield-farming, but also want to preserve the capital.

7. Decentralized

Tether is decentralized, which means that there is no central authority controlling its supply or price.

This makes it easier for anyone to use cryptocurrency without having to worry about regulations or restrictions from governments.

8. Quick and Easy

Tether is very easy to use because it can be used just like fiat currency.

Anyone who wants to buy Tether will only need a wallet and an internet connection; this makes it more convenient than other cryptocurrencies that require complicated mining procedures.

 

Risks of Investing in Tether (USDT)

Just with any stablecoin, there are risk associated with investing in USDT.

One of the main risk for cryptocurrencies is always the risk of getting hacked, but so far Tether (USDT) has been safe in this aspect, with no major hacking incidents related to the blockchain.

The other major risk for stablecoins is the risk of depegging, since the token is pegged to the US Dollar.

If depegging occurs, like what happened to Terra USD (UST), then the token can rapidly spiral to zero.

However, Tether has a healthy reserve to defend the peg, and the price has not deviated significantly from the peg before, so this risk is not too high as well.

How to Buy Tether (USDT)?

To buy Tether, you will need to register an account on an exchange that supports USDT, such as Bitfinex, Binance, or Huobi.

Once you have your exchange account set up and verified, you will be able to purchase Tether with either fiat currency or another cryptocurrency.

For more information about brokerages, you can check out our list of tools & resources.

The Future of Tether (USDT)

Tether, or USDT for short, is issued on the Omni Layer, a blockchain platform that is compatible with multiple cryptocurrencies, including Bitcoin, Litecoin, and Ethereum.

Each USDT unit you go for is backed by one U.S. dollar held in reserve by Tether Limited.

And with its recent expansion into Ethereum and other blockchain platforms, Tether’s future looks bright.

Concluding Thoughts

Tether is currently the go-to option for many people looking to use stablecoins, as it’s an ideal way to store your hard-earned money without having to worry about it losing value.

Furthermore, the fact that it’s backed by USD makes it a more stable option than other cryptocurrencies.

However, if you are looking for higher yields on stablecoins, then there are other stablecoins which offer higher yields, but also come with higher risk.

So in a sense, Tether (USDT) is like the blue-chip of stablecoins in the crypto universe.

Now that you know all about stablecoins and Tether (USDT), do you think they are good investments?

What do you think are some good strategies to profit from stablecoins such as USDT?

Let me know in the comments below.

 

thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail What is a Crypto Blockchain 51 Attack

In theory, any miner can choose to conduct a 51% attack on the network, where they control over 50% of the entire blockchain’s mining power and use it to alter transactions in their favor.

How is this possible?

Blockchain technology has made its mark on the world as one of the major technological advancements of our time, with one of its most famous applications being the decentralized cryptocurrency, Bitcoin.

While blockchain has already revolutionized how people exchange money, we are still just scratching the surface when it comes to what this technology can do.

Blockchain works because it is decentralized — no single entity controls the ledger.

But because of this, blockchain is also more vulnerable to attack than centralized ledgers are.

In this blog post, I will explain everything you need to know about a 51% attack on blockchain, what its impact is, and how it can be prevented.

Let’s jump right into it!

Infographic Crypto Blockchain 51 Attack

 

What is a 51% Attack?

A 51% attack occurs when a malicious user in a blockchain network gains the ability to control more than 50% of a given blockchain’s computational power, which lets them mine faster than everyone else on the network.

This gives them an advantage because they can alter data or stop transaction confirmations without having to get any consensus from other users on the network.

Depending on the mining power of the attacker, a 51% attack can often bypass the network’s security protocols.

While blockchains are generally secure, they are not perfect.

For instance, there is no way to guarantee that all of a blockchain’s participants are honest and will not manipulate transactions or data.

With Bitcoin, miners are in charge of adding new blocks to its blockchain and validating transactions.

Because they decide which transactions to validate, they can choose not to include some that their users want validated if it helps them get ahead.

But this isn’t a problem with most cryptocurrencies, including Bitcoin and Ethereum, because the computing power needed to attack such a huge established blockchain would be impossibly large.

We only see this type of behavior during so-called penny wars.

These occur when small players try to game the system by spamming large numbers of unimportant transactions to push up the price paid per kilobyte (KB) for mining these low-value transactions.

To combat such attacks, most blockchains also have built-in features and hard fork protocols that enforce changes in their system if necessary.

What is the Impact of a 51% Attack?

If miners get too much hash rate and collectively control more than 50%, they can theoretically form their own consensus and run a different version of the network history, allowing them to spend their money twice and double-spending other people’s transactions.

They would also be able to redirect any transactions they see as undesired by broadcasting one transaction but mining another block.

All these changes could impact end users because they allow an entity with majority mining power to manipulate the blockchain and its rules in ways incompatible with end-user expectations.

This kind of attack is why some people advocate for Segregated Witness (SegWit) or Lightning Network to handle Bitcoin transactions instead of on-chain transactions, as there would not be any need for a lot of hashing power to execute these types of transactions.

A 51% Attack Can Cause Network Disruption

One of the primary Blockchain protocols is referred to as Proof-of-work (PoW), which is used by Bitcoin, Ethereum, and other popular networks.

The PoW protocol essentially maintains that every 10 minutes, there will be new blocks added to a blockchain’s ledger.

For someone in a network to add new blocks to that blockchain, they must guess complex mathematical equations, which are nearly impossible to calculate if you don’t have access to high computing power.

However, in a 51% attack, the attacker can disrupt the entire network by interfering with unconfirmed blocks and transactions.

Cryptocurrency users might lose digital assets or cash due to a 51% attack.

This raises serious concerns about blockchain’s reliability and security among its users and miners.

Is the Damage Permanent?

It is important to note that while these types of malicious actors might be able to disrupt a blockchain and invalidate recent transactions temporarily, they do not necessarily have access to modify past transactions.

So even though it may seem like your money has disappeared forever during one of these attacks, rest assured that it won’t stay gone forever.

For example, if someone transferred Bitcoin to another individual or merchant, it would not be possible for an attacker to reverse that transaction.

They could still prevent future transactions from going through and might even be able to access your funds, but these are two different things entirely.

Once these attacks have ended, you will regain access to your funds.

How Different Is It from a 34% Attack?

A 34% attack is one where an attacker can control most of the network’s mining power, but does not have enough to control more than 50%.

In this instance, the attacker could alter the blockchain’s ledger.

The consequences of a 51% attack are far more severe.

A 51% attack would not stop transactions from happening, but it could severely disrupt blockchain’s peer-to-peer model and open doors for double-spending.

With more than half of all computing power available to an attacker, they could create multiple versions of their own chain to outpace that of a blockchain’s main network.

51% Attacks in Recent Times

a) Grin:

Grin, a blockchain cryptocurrency focused on preserving the privacy of its users, was the currency on the attack where an unknown miner took up 57% of the Grin hash power.

What the attacker intended is still a mystery.

Grin was forced to shut off payouts and urged miners to stop until the issue was fixed.

Grin later re-established the network and added additional measures to prevent the attack from recurring.

b) Vertcoin:

The cryptocurrency Vertcoin has been attacked several times over the past few years.

In one such attack, the attackers wrote their own blocks in place of the Vertcoin genuine blocks.

Vertcoin switched from the original blockchain to a new, more robust PoW system to keep attackers from double spending and getting their hands on users’ hard-earned money.

Moreover, it had to cut off powerful mining chips to keep its mining more community-based.

c) Bitcoin Gold:

Compared to other Bitcoin forks such as SHA-256, Bitcoin Gold (BTG) implements the Equihash consensus algorithm.

The developers intended to achieve decentralization by using GPU mining instead of ASICs.

However, an unknown miner managed to gain access to more than 51% of the overall BTG hash rate in 2018, resulting in heavy losses for the network.

Another 51% attack on BTG occurred in 2020, and the network experienced two reorganizations in two days.

An enormous amount of money was double spent.

There was a suspicion that the BTG network had ASIC mining devices that might have been hidden from the community.

The community then urged the blockchain to implement a more secure algorithm.

d) Ethereum Classic:

In 2020, the ETC blockchain was attacked three times in the same month.

ETC relies on the decentralized proof-of-work (PoW) consensus algorithm, just like Bitcoin, which makes it challenging to avoid or mitigate 51% attacks.

Though these attacks did not significantly affect ETC prices, they reduced users’ trust in the network.

Can a 51% Attack Be Prevented?

Although blockchain is a decentralized database, it is not immune to hacking.

The best way to protect against a 51% attack is to limit the amount of hashing power that any single miner has to 50%.

So no person or organization can control more than 50% of the total network’s mining power.

Another way to prevent a 51% attack is using the Proof of Stake (PoS) consensus mechanism.

PoS makes it more difficult for validators (not miners) to produce blocks and act maliciously because they don’t have an incentive to do so.

Instead, the validator’s stakes are at stake — their investment in the cryptocurrency.

For them to abuse their power, they would have to forfeit their entire stake.

The higher the stakes, the more difficult it becomes for them to act maliciously.

Concluding Thoughts

When blockchain was first introduced, it caused quite a buzz in the financial sector.

Because of its decentralized, trustless nature, this technology has captured everyone’s attention and promises to have a far-reaching impact on many aspects of everyday life.

However, blockchain isn’t infallible, and like any other technology, it has its vulnerabilities and risks that users should be aware of, such as the 51% attack and 34% attack.

Now that I have covered all you need to know about a crypto blockchain 51% attack, are you able to tell which new tokens are at risk of such attacks?

Do you think the upcoming new security protocols will be able to stop such attacks in future?

Let me know in the comments below.

 

thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail What are Blockchain Forks How do they Affect Your Trading Platform

Have you come across the term “blockchain fork”, “hard fork” or “soft fork”?

Everything moves fast in the world of cryptocurrencies, from price fluctuations to new technology being introduced to the market every day.

While this can be very exciting for an investor, it can also cause confusion and chaos when multiple versions of one cryptocurrency appear out of nowhere.

So, what exactly do these terms mean, and how does it affect your crypto holdings?

In this blog post, I will explain exactly what blockchain forks are, the different types of forks, and why it is important for your trading platform and portfolio.

 

What are Blockchain Forks

 

What is a Fork?

Cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) run on decentralized, open-source software, which anyone can contribute to — this software is called a blockchain.

Blockchains are named because they are blocks of data made up of transactions that can be traced back to the first-ever transaction on the network.

And because they are open-source, they rely on the work done by their communities to keep them up to date and actively develop the underlying code.

A fork is when a block of data suddenly diverges into two branches.

The new branch will share all of the earlier branch’s history but is headed off in its different chain.

Following this, they go on their way, each going in a separate direction.

There are many possible reasons for blockchain forks.

A fork may either be accidental or intentional.

Both soft forks and hard forks are subcategories of intentional forks.

Accidental Forks vs. Intentional Forks

Thousands of miners are constantly mining a new block at once.

In some cases, two or more miners may mine the same block, resulting in an accidental block.

As soon as an accidental block is mined, the network focuses on the longer chain and abandons the shorter one.

With an intentional fork, the network does not reconverge onto a single chain.

Developers often utilize this type of fork to amend the blockchain’s protocol or fundamental set of rules.

To take just a few examples, developers might use an intentional fork to alter the block size, reduce block time, or experiment with new consensus algorithms.

An intentional fork may be hard or soft.

These two differ in terms of their compatibility with other chains and their applications.

Soft Forks vs. Hard Forks

A hard fork is a permanent divergence from one blockchain that results in a new chain, rendering the previously valid transactions invalid.

This permanent separation requires all nodes to adopt new rules within their blockchain software, and as a result, nodes on different chains may not communicate with each other.

This type of split occurs when developers can’t agree on proposed changes.

If a hard fork occurs, users and miners must make a decision — keep running the old version of the software or upgrade to the newly-forked chain.

In any case, they now own cryptocurrency on both chains.

They still hold currency from the legacy chain and can claim the new protocol’s currency on the new chain.

Once a change has been implemented, any nodes that fail to upgrade to the new consensus rules are kicked off the main chain.

Without upgrading to the system’s latest version, the new consensus rules cannot be processed, which would make the original blocks split by a hard fork incompatible with the new version.

A hard fork may be done when there is an issue with how a cryptocurrency works or if changes are needed to increase scalability and solve other problems within their network, such as what happened with Bitcoin Cash in 2018.

In contrast to hard forks, changes made by soft forks are backward-compatible with the pre-fork blocks.

To make the chains backward-compatible, blocks created under the new consensus rules must also be valid under the pre-fork rules.

Therefore, soft forks do not require the nodes to upgrade — they can still participate in the new network as validators while running the old software version.

A soft fork is done to update and improve a cryptocurrency’s software.

This is done by making all its users change to new rules rather than enforcing them directly (like a hard fork).

Soft forks work because if you don’t update your software, you will still be able to use it as normal and interact with everyone else on the network who has updated their software.

Different Types of Soft Forks

User-activated soft forks (UASF) and miner-activated soft forks (MASF) are the two different types of soft forks.

A UASF is a mechanism that allows nodes to activate on a specified block height.

Once activated, these nodes enforce new rules across all blocks mined moving forward.

When a majority of hash power has signaled support for UASFs, only then will activation occur.

These nodes will reject any blocks generated according to older consensus rules.

Miners who have updated to newer versions of the software are more likely to mine blocks following the latest set of rules; however, if a large amount of hash power remains on outdated versions, this could lead to a replay attack where transactions occurring on one chain would appear on another.

A MASF differs from a UASF in that the change activates at an agreed-upon block number.

Nodes and miners trigger MASFs at regular intervals, which means there is some time before the full activation of new rules.

Miner-initiated soft forks are less disruptive than user-initiated ones because they don’t interfere with how users create transactions.

Blockchain Forks in Practice

Most digital currencies have communities of independent developers responsible for changing and improving the network.

So there are times when a cryptocurrency gets forked to add features or make it more secure.

Developers of a new cryptocurrency can also use forks to create an entirely new currency and ecosystem.

One popular currency that is a product of a hard fork is Bitcoin Cash (BCH), which forked from Bitcoin in mid-2017.

When Bitcoin Cash forked, the block size limit increased from 1 to 8 MB and later to 32 MB.

Created in October 2016, Ethereum Classic (ETC) is another popular example of a hard fork.

This currency was created after a group of developers rejected new rules implemented by hard forking.

Instead, they opted to continue using the old Ethereum chain, later renamed Ethereum Classic.

Because hard forks might cause the blockchain community to split into two separate groups, developers usually try to work on implementing soft forks first.

This way, they can update the network without changing its fundamental functionality and only allowing for new functionality.

In Bitcoin’s Segregated Witness (SegWit) protocol, for instance, it was thought that a hard fork would be required to make significant changes to the fundamental structure of transactions.

However, the developers found an efficient and forward-compatible solution, implementing SegWit with a soft fork.

Nodes that have not updated to SegWit still participate in the Bitcoin network by employing a soft fork.

With a soft fork, developers can also take advantage of upgrades in proof-of-work algorithms, like Ethereum’s move from Bitcoin’s SHA256 algorithm to Ethash.

If a cryptocurrency you are using undergoes a hard fork, this knowledge about forks will allow you to make an educated decision on which branch to  follow after the blockchain fork.

How do Forks Affect a Trading Platform?

The term fork is mainly associated with the hard fork of Ethereum  that led to the creation of Ethereum Classic.

A hard fork occurs when a cryptocurrency’s existing code is altered, typically because of an addition, deletion, or change in the code’s function.

In this case, Ethereum split into two versions with different rules for making changes.

However, not all forks are created equal.

The Bitcoin Cash hard fork took place in 2017 after a disagreement within the community about upgrades that needed to be made on Bitcoin’s software was not addressed by developers.

This caused those involved with BCH to make some changes so that there would be fewer restrictions on what you could do with Bitcoin.

This can significantly affect how you can buy, sell or trade a cryptocurrency.

Some crypto trading platforms provide access only to cryptocurrencies that are considered viable options for trading.

This could mean that if there is an upcoming hard fork, your platform may not support it or be disabled entirely during that time.

However, there are trading platforms that support all hard forks.

Some even allow you to buy during a fork by providing access to funds and cryptocurrency before trading begins on other exchanges.

This can give you some early insight into how certain changes will impact your crypto portfolio.

And it also means that your platform will be ready for trading as soon as one of these hard forks occurs—rather than waiting until another exchange offers support.

Concluding Thoughts

As cryptocurrencies continue to become more mainstream, and with the emergence of new cryptocurrencies, the need to understand blockchain forks becomes increasingly important.

While blockchain forks don’t happen often, they do have a major impact while such an event occurs.

I hope this guide will help you understand what happens during a fork and how it affects you as a trader or cryptocurrency owner.

The next time one occurs, you’ll be able to recognize what is going on, and make an informed decision regarding your crypto assets.

Now that you know all about the different types of blockchain forks, how would you go about deciding whether to follow the new or old blockchain when a fork does happen?

Would you prefer to sell off your tokens and buy them back after the fork, or just hold them through the forking process?

Let me know in the comments below.

 

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If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

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Have you ever wondered, what is the best way to buy Bitcoin and other cryptocurrencies?

Cryptocurrencies are on their way to becoming mainstream and are here to stay.

No one can say how long they’ll be around, but they have already made a mark on the world and are becoming more popular by the day.

Not only do they make it easier for people to send and receive money, but they also offer a level of privacy that traditional currencies don’t.

While many people are still wondering what all the fuss is about, many others are busy buying cryptocurrencies.

So, if you are one of those sitting on the fence and wondering what all the fuss is about and how you can get involved in this growing market, then you’ve come to the right post.

This post will discuss all the ins and outs of cryptocurrencies, including why they are valuable, where to buy as well as how to buy them.

So, before you get involved in this growing market, let’s understand the basics.

 

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Introduction to Cryptocurrency

Many people thought that cryptocurrencies were only a passing fad.

However, in the past years, it has been evident that they are here to stay.

So, what exactly is cryptocurrency?

In simple language, cryptocurrencies are digital currencies that are created and stored on the blockchain.

The blockchain is a digital ledger that keeps track of every transaction ever made with a cryptocurrency.

This allows people to keep track of their money without having to trust any third party like a bank or government.

If we talk about the cryptocurrency types, then the most popular ones are Bitcoin and Ethereum.

  • Bitcoin is the first and foremost valuable cryptocurrency that was created in 2009 by an anonymous developer named Satoshi Nakamoto. It is a decentralized currency, which means no central authority can control it or inflate its value.
  • Ethereum is the second most known cryptocurrency after Bitcoin. It was developed in 2013 by a team of developers led by Vitalik Buterin and is used more as a platform for decentralized applications (dApps).

Apart from this, there are many more, like IOTA, Litecoin, Neo, and Cardano.

So, it’s difficult to answer which one is better than the others. The only thing that matters is what you want to achieve with the currency.

If you want a cryptocurrency that can be used for payments and storing value, then Bitcoin is the best choice.

On the other side, if you choose a platform to create dApps or smart contracts, then Ethereum is your best bet.

Why are They Valuable?

Cryptocurrencies are valuable because they are decentralized, meaning no one governing body controls it.

It’s also encrypted so that only the owner of the wallet has access to their funds.

This makes it super challenging for hackers to steal your money.

Also, the fact is that cryptocurrencies are global means they can be sent anywhere in the world without any hassle.

This makes them highly valuable to those who need to send money overseas.

How to Buy Crypto?

If you are a beginner or new to the world of cryptocurrencies, then you will feel lost in this big sea.

But no panic; here is a step-by-step guide to help you understand the process of buying cryptocurrency.

1. Choose a cryptocurrency to invest in

There are many different cryptocurrencies, so the the first step is to decide what cryptocurrency you want to invest in.

Bitcoin (BTC) is one of the most popular choices because it’s been around since 2009 and has proven itself a valuable investment option.

You can also choose Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and others, depending on which ones appeal to you most.

2. Choose a broker or crypto exchange

The next step is to choose a broker or crypto exchange.

A broker will help you to purchase cryptocurrency, but you’ll need to be careful to choose a reputable one.

A crypto exchange is like an online bank where you can buy and sell cryptocurrency.

This option is easier than using a broker, but it’s also less secure because it doesn’t have the same security measures in place.

However, some exchanges are better than others, so make sure that you research the ones that interest you before choosing one.

If you are looking for a list of recommendations, you can check our full list of tools and resources.

3. Create your account

Feeling excited? You should be!

The next crucial step is to open up your crypto account.

Once you have chosen a broker or crypto exchange, you’ll need to sign up for an account with them.

This will involve providing some personal information like your name and address, but it also means that the company has all of your details in case anything goes wrong.

4. Fund your account

You will need to fund your account before you can buy any cryptocurrency.

This means that you need to deposit some money into the exchange so that it can be used as a base currency amount for buying or selling cryptocurrencies.

The amount of funds you need to deposit will depend on how much cryptocurrency you want to buy and what type of coin it is (e.g., Bitcoin or Ethereum).

5. Place your order

Once you have deposited funds into your account, it’s time to place an order.

This is when you tell the exchange what type of coin you want to buy and how much of it.

You should also specify which currency should be used as a base (e.g., USD) and whether or not you want immediate delivery or if you want to set up a future date for receiving the coins.

6. Store safely

Once your order has been placed, you will receive your coins at the specified wallet address, and it is then crucial to keep it safe.

Storing your crypto assets on an exchange might be convenient, but it is also more vulnerable to theft.

So, if you want to avoid this, then consider using an offline hardware wallet. They allow you to store your private keys on secure devices that are not connected to the internet.

This way, if someone were to steal them from you, they would be unable to access your coins.

Now that you are equipped with how to buy Bitcoin and other cryptocurrencies let’s move on to where to buy.

Where to Buy Crypto?

You will be mesmerized to know that the value of Bitcoin has increased from $0.5 to $20,000 in just months.

This is the reason why people are investing in Bitcoin and other cryptocurrencies today.

However, with numerous such choices available, it can be confusing to find a reliable place to buy your coins.

That’s why we’ve come together with this handy guide on the best places to buy Bitcoin and other cryptocurrencies online.

There are two ways to get started.

One is going through a broker, and the second is using a cryptocurrency exchange.

Below are the pros and cons of both options so that, in the end, you are piped line with the right information to make an informed choice.

a) Broker:

A broker is simply a person or a company that acts as an intermediary between you and the cryptocurrency exchange.

They provide a platform where you can buy, sell, and trade cryptocurrencies.

The benefit of using a broker is that they offer a simple and convenient way of purchasing Bitcoin or other cryptocurrencies.

You can also use a broker to sell your coins when you want to close your positions or rotate back to fiat currency.

The only drawback is that they charge higher fees than cryptocurrency exchanges do.

b) Cryptocurrency exchange:

A cryptocurrency exchange is a platform where you can buy and sell cryptocurrencies.

It works much like a stock exchange, except that it deals with digital currencies instead of stocks or bonds.

The primary benefit of using a cryptocurrency exchange is that it provides you with a wide range of coins to choose from.

You can also use it to trade different cryptocurrencies against each other.

The only drawback is that you’ll have to pay fees for each transaction, which can be pretty high if you make a lot of trades.

Concluding Thoughts

Cryptocurrencies are becoming increasingly mainstream, and with that comes an increase in the number of ways to buy Bitcoin and other digital assets.

While there are many different exchanges available, not all of them are created equal.

It is supreme to do your own research to find an exchange that is reputable and offers the features that you are looking for.

Now that I have shared where and how to buy Bitcoin and various cryptocurrencies, which do you think is the best way to do it?

Let me know in the comments below.

 

thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”