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 $1,070 trillion. Bitcoin is down by nearly 2% after intense seesawing this week. Ethereum increased by almost 2% over the past seven days. XRP lost more than 1% in value this week. Almost all altcoins are trading in the red, with a few exceptions. The DeFi sector decreased the total value of protocols (TVL)…
What is a Blockchain Protocol?
A blockchain is a decentralized, distributed database that allows a network of computers to reach a consensus on the state of a set of records called blocks. The blocks are linked in a chain containing a cryptographic hash of the previous block, a timestamp, and transaction data. The blockchain is typically managed by a peer-to-peer network of computers that work together to validate and record transactions on the blockchain.
Many blockchain protocols are in use today, each with features and characteristics. Some of the most popular blockchain protocols include:
- Bitcoin: This is the original blockchain protocol, developed in 2009 to enable peer-to-peer electronic cash transactions without needing a central authority. It uses a proof-of-work consensus algorithm, which requires network participants to solve complex mathematical puzzles to validate transactions and add new blocks to the chain.
- Ethereum: This is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. It uses a proof-of-work consensus algorithm, but it is planned to move to a proof-of-stake algorithm shortly.
- Ripple: This is a real-time gross settlement system, currency exchange, and remittance network created by Ripple Labs Inc., a US-based technology company. It uses a consensus algorithm called the “Ripple Protocol Consensus Algorithm” (RPCA) to validate transactions and add new blocks to the chain.
- Hyperledger Fabric: This is an open-source blockchain protocol developed by the Linux Foundation specifically for enterprise settings. It uses a pluggable consensus algorithm, allowing users to choose the algorithm that best fits their needs.
- Corda: This is an open-source blockchain protocol developed by the R3 consortium for financial services. It uses a unique consensus algorithm called the “Notary” that allows for the validation of transactions without the need for a central authority.
The Most Common Consensus Protocols
- Proof of Work (PoW): This is the most widely used consensus algorithm and is used by cryptocurrencies such as Bitcoin and Monero. In a PoW system, network participants, called “miners,” compete to solve complex mathematical puzzles to validate transactions and add new blocks to the chain. The first miner to solve the puzzle gets to add the block to the chain and is rewarded with a certain number of tokens. The main advantage of PoW is that it is secure and resistant to attacks, but it can be energy-intensive and slow.
- Proof of Stake (PoS): In a PoS system, the probability of a network participant being selected to validate a transaction and add a new block to the chain is based on their “stake” in the network. This stake is typically represented by the number of tokens the participant holds. The main advantage of PoS is that it is more energy-efficient than PoW, as it does not require miners to perform resource-intensive computations.
- Delegated Proof of Stake (DPoS): This is a variation of PoS in which network participants vote to elect a group of “delegates” responsible for validating transactions and adding new blocks to the chain. The delegates are typically chosen based on their stake in the network and their reputation. DPoS is designed to be faster and more scalable than other PoS systems.
- Practical Byzantine Fault Tolerance (PBFT): This consensus algorithm is used in distributed systems such as Corda. In a PBFT system, network participants communicate to reach a consensus on the system’s state. If a participant behaves improperly, it can be “slashed” or punished by other participants. The main advantage of PBFT is that it is fast and efficient, but it requires a relatively small number of participants for it to be secure.
- Ripple Protocol Consensus Algorithm (RPCA): This is a consensus algorithm used by the Ripple payment network. It is based on a network of trusted nodes that reach a consensus on the state of the network through voting and validation. The main advantage of RPCA is that it is fast and efficient, but it relies on a central group of trusted nodes, which may not be as decentralized as other consensus algorithms.
What Is Crypto Historical Data and How to Use It in Trading
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How to Effectively Predict Crypto Prices
Predicting crypto prices is a complex task and requires a combination of technical analysis, fundamental analysis, and market sentiment. Here's a guide to help you effectively predict crypto prices: Technical Analysis: This involves studying past market data, including price and volume trends, to identify patterns and predict future price movements. Use charting tools, such as candlestick charts, to visually represent this data. Fundamental Analysis: This involves analyzing the underlying factors that may impact the value of a cryptocurrency, such as…
Guide to Value a Cryptocurrency
Valuing a cryptocurrency can be difficult and subjective, as many factors contribute to its worth. However, here are some steps and considerations for valuing a cryptocurrency: Market capitalization: This is the total value of the cryptocurrency in circulation. It is calculated by multiplying the total number of coins by the current market price. Adoption and usage: The more people use cryptocurrency, the more valuable it is likely to become. This includes individuals and businesses using it for transactions or as…
The Best Crypto Portfolio Trackers (Coin Trackers)
Crypto portfolio trackers are apps or websites that allow users to monitor their cryptocurrency holdings across multiple exchanges and wallets in one place. They connect to users' exchange and wallet accounts through APIs (Application Programming Interfaces) and automatically track the user's cryptocurrency holdings and transactions. The tracker updates in real-time and provides an overview of the user's total portfolio value, asset allocation, and returns. This allows users to track their investment performance and make informed decisions easily. What Should The…
An Overview of Different Cryptocurrency Scams
Cryptocurrency scams are fraudulent schemes that are becoming increasingly common as the popularity of cryptocurrencies continues to grow. They can take many forms and are often designed to appear legitimate investment opportunities or exchanges. Unfortunately, these scams can cause significant financial losses for individuals and harm the reputation of the cryptocurrency industry as a whole. It is crucial for anyone considering investing in cryptocurrencies to be aware of the various types of scams and to take steps to protect themselves.…
What Are Crypto Data Aggregators?
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What Is CoinGecko?
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What Is CoinMarketCap (CMC)?
CoinMarketCap (CMC) is a website that provides information about the cryptocurrency market and tracks the capitalization of various cryptocurrencies. It was founded in 2013 and has become one of the most popular cryptocurrency data providers. CMC aggregates information about the prices, volume, and market capitalization of cryptocurrencies from various exchanges and calculates the average value. Furthermore, the website displays this information in real-time, giving users a comprehensive overview of the cryptocurrency market. CMC tracks over 22,000 cryptocurrencies, including Bitcoin, Ethereum,…
What Are Crypto Pyramid Schemes?
A crypto pyramid scheme is a fraudulent investment scheme where returns are paid to existing investors from funds contributed by new investors. It's called a "pyramid" because it typically has many new entrants at the bottom, with each layer representing fewer investors. Example: John starts a pyramid scheme and invites five friends to invest 1 Bitcoin each. John promises to return 2 Bitcoins to each participant in a month. John needs 10 Bitcoins to fulfill his promise, so he invites…