Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The Crypto Market ends the week at a total market capitalization of $1,071 trillion. Bitcoin is up by over 3% after a successful week. Ethereum decreased by almost 2% over the past seven days. XRP gained nearly 2% in value this week. Almost all altcoins are trading in the green, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Public vs. Permissioned vs. Private Blockchain
A private blockchain is a completely closed network to the public and can only be accessed by a pre-approved set of participants. Only authorized users can participate in the network, view the ledger, and validate transactions. This type of blockchain is typically used by organizations that want to keep their transactions and data private and secure.
A permissioned blockchain, also known as a consortium blockchain, is similar to a private blockchain in that it is not open to the public. Still, it is slightly more decentralized than a private blockchain. In a permissioned blockchain, a group of pre-approved organizations or individuals can validate transactions and maintain the network. This type of blockchain is often used in finance and supply chain management industries, where multiple parties must share data securely.
A public blockchain, on the other hand, is a network that is open to the public, and anyone can participate in the network, view the ledger, and validate transactions. This type of blockchain is decentralized and is not controlled by any single entity. Examples of public blockchain networks include Bitcoin and Ethereum.
Examples of Public, Permissioned, and Private Blockchains
Some examples of public blockchain networks include:
- Bitcoin: The first and most well-known cryptocurrency, Bitcoin uses a public blockchain to secure and validate transactions on its network.
- Ethereum: A decentralized platform that enables the creation of smart contracts and decentralized applications, Ethereum also uses a public blockchain.
Some examples of permissioned blockchain networks include:
- Hyperledger: An open-source project created by the Linux Foundation, Hyperledger is a collection of permissioned blockchain frameworks and tools often used in enterprise settings.
- R3 Corda: A permissioned blockchain platform designed specifically for financial services companies, Corda is used by a consortium of over 200 banks and financial institutions.
Some examples of private blockchain networks include:
- Quorum: An enterprise-focused version of Ethereum, Quorum is a private blockchain often used in the finance and healthcare industries.
- Chain Core: A private blockchain platform designed to be highly scalable and secure, Chain Core is used by various organizations in industries, including finance and supply chain management.
A private blockchain is closed off and only accessible by pre-approved users. A permissioned blockchain is semi-decentralized and open to pre-approved users, while a public blockchain is decentralized and open to the public.
What Are DeFi Lending Platforms?
Decentralized finance (DeFi) lending platforms are decentralized applications (dApps) built on blockchain technology that enable users to borrow and lend cryptocurrency. These platforms use smart contracts to automate the lending process, eliminating the need for intermediaries such as banks. Here's an example of how a DeFi lending platform might work: Alice wants to borrow 100 ETH, so she goes to a DeFi lending platform and posts a request for a loan. Bob, who has 100 ETH to lend, sees Alice's…
What is The Capital Gains Tax in Crypto?
Cryptocurrency capital gains tax is the tax imposed on the profit made from the sale or exchange of a cryptocurrency. The tax rate for capital gains can vary depending on the country or jurisdiction. Still, in the United States, it is typically calculated as the difference between the cryptocurrency's purchase price (or cost basis) and the sale price multiplied by the individual's marginal tax rate. In some countries like the US, you only need to pay the capital gains tax…
Cryptocurrency vs. FIAT Money
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central bank or government. Bitcoin, the first and most widely used cryptocurrency, was created in 2009. FIAT money, on the other hand, is a currency a government has declared legal tender, but a physical commodity (such as gold) does not back it. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material…
Short-Term vs. Long-Term Crypto Investors
Short-term crypto investors typically buy and sell digital assets within a short time, often within a few hours or days. They are often driven by market fluctuations and aim to make quick profits. Long-term crypto investors hold onto their assets for longer, often for several months or years. As a result, they often believe in the technology and potential of the digital asset they are investing in and need to be more focused on short-term market movements. Short-Term vs. Long-Term…
What Are Bitcoin Maximalists?
Bitcoin Maximalists believe that Bitcoin is the only true cryptocurrency and that all other cryptocurrencies are inferior or unnecessary. Therefore, they often advocate for using and adopting only Bitcoin and reject the idea of diversifying one's cryptocurrency portfolio with other coins or tokens. Bitcoin Maximalists are known for their strong belief in the value and potential of Bitcoin as a decentralized and scarce digital asset. They often view it as a store of value or hedge against traditional fiat currencies…
Coins vs. Tokens: What Are the Differences and Similarities?
Crypto coins and tokens are digital assets that use blockchain technology, but they have some key differences. A crypto coin, like Bitcoin or Litecoin, is a standalone digital currency used to buy goods and services or traded on cryptocurrency exchanges. Coins have their blockchain and can be mined (created by solving complex mathematical equations) or minted through staking. On the other hand, a token is a digital asset built on top of an existing blockchain, like Ethereum or BNB Chain.…
What Are Overbought and Oversold Conditions in Crypto Trading?
Overbought and oversold conditions in crypto trading refer to situations where the price of a cryptocurrency has moved to an extreme level in one direction or the other. An overbought condition occurs when the price of a cryptocurrency has risen significantly and is considered too high relative to its recent trading history. This can indicate that the market is becoming too bullish and that the price may soon experience a correction. An oversold condition occurs when the price of a…
What is Crypto Tokenomics?
Crypto tokenomics refers to the economic principles and mechanisms that govern the creation, distribution, and use of tokens within a blockchain-based network. A token is a digital asset that can be traded on blockchain platforms and represents a certain value or utility within a specific ecosystem. For example, consider a decentralized application (dApp) built on the Ethereum blockchain. The dApp might issue its token, let's call it "APP," which can be used to access certain features or services within the…
What Are Gold-Backed Tokens?
Gold-backed tokens are digital assets backed by a physical asset, in this case, gold. They are typically issued by a company that holds a certain amount of gold in reserve. The company will issue certain tokens representing a specific amount of gold. For example, one token might represent one gram of gold. These tokens can be bought and sold on various cryptocurrency exchanges, similar to how other cryptocurrencies, such as Bitcoin, can be traded. The token's value is tied to…