Introduction to crypto world

Introduction to crypto world

Tim Reznich

Here is an ultimate list of different crypto projects I collected:

https://github.com/imbaniac/awesome-blockchain

Best site to find cryptocurrency, check prices and it's changes

https://coinmarketcap.com/

Find/check bitcoin transaction - https://blockchain.info/

Find/check ethereum transaction - https://etherscan.io/

How works / What is blockchain, bitcoin etc

Here is a great interactive introduction to know better how works blockchain, bitcoin and other cryptocurrencies :

https://anders.com/blockchain/

And something to read:

https://blockgeeks.com/guides/what-is-blockchain-technology/

https://bitsonblocks.net/2015/09/09/a-gentle-introduction-to-blockchain-technology/

What is XBT, BTC, satoshi

XBT and BTC are tickers for Bitcoin

Satoshi is smallest BTC part - 1 / 100 000 000

What is an altcoin / pump / dump

Altcoin is any coin that is not Bitcoin. Until recent time Bitcoin had over 50 or even 80% of cryptocurrency market and most of other coins was Bitcoin forks (Lightcoin, Dash, Dogecoin, PIVX etc).

Pump is a very fast growth of cryptocurrency. Dump is exactly opposite.

What is SegWit

In short - it's a way to increase the number of transactions in a block by moving out some protocol stuff out. There was a SegWit soft fork this summer (2017). For more detailed info:

https://blockgeeks.com/guides/what-is-segwit/

What are hard/soft forks

Be aware that this is not same as a fork in programming.

A hard fork is a software upgrade that introduces a new rule to the network that isn't compatible with the older software. You can think of a hard fork as an expansion of the rules. (A new rule that allows block size to be 2MB instead of 1MB would require a hard fork). Nodes that continue running the old version of the software will see the new transactions as invalid.

So, to switch over to the new chain and to continue to mine valid blocks, all of the nodes in the network need to upgrade to the new rules. If some part of nodes won't do it, there will be a split. This is how we have Bitcoin Cash, Ethereum Classic etc.

A soft fork, is any change that has backward compatible. Say, instead of 1MB blocks, a new rule might only allow 500KB blocks. Non-upgraded nodes will still see the new transactions as valid (500k is less than 1MB in this example). However, if non-upgraded nodes continue to mine blocks, the blocks they mine will be rejected by the upgraded nodes. This is why soft forks need a majority of hash power in the network. If it won't have majority - soft fork can't happen.

There are a few Bitcoins, which one to choose

Bitcoin (BTC) is the only bitcoin. Bitcoin Cash (BCash, BCH, BCC) and Bitcoin Gold (BTG) are hard forks of Bitcoin and attempt to get more money under cover of fairy tells about better technologies and more decentralization.

Seems, that hard forking became a new way of creating altcoins.

What is PoW/PoS

Proof of Work (PoW) is described in previous links. In short, it's the main algorithm for keeping blockchain in sync, mint new coins and to protect from spam by solving a complicated math puzzle.

Proof of Stake (PoS) alternative algorithm that doesn't require solving puzzle and creator of a new block is chosen in a deterministic way, depending on its wealth, also defined as stake.

More on there is written here:

https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/

https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ

What about mining

Bitcoin mining is the process by which transactions are verified and added to the blockchain, and also the means through which new coins are released.

I've never been mining, don't know anything about it except that is very risky and low profitable (at least today).

Even more - there are more efficient algorithms than PoW and the mining will be obsolete in a few years.

What is mempool

When a Bitcoin transaction is transmitted to the network it first gets verified by all of the Bitcoin nodes available. After it successfully passes verification it goes and sits inside the mempool (short for Memory Pool) and patiently awaits until a miner picks it up to include it in the next block. So the mempool is basically the node’s holding area for all the pending transactions. Like RAM in your device.

What is an Ethereum / Smart Contracts / ERC20 / Solidity

Ethereum - 2nd cryptocurrency by capitalization with killer feature - smart contracts. Works on Proof of Work algorithm but soon be changed to Proof of Stake.

Smart contracts - self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. Ethereum is the most popular platform for creating smart contracts, but there are some alternatives (working or soon to be) - NEO, EOS, Tezos, Waves etc. You can even have contracts on Bitcoin network - https://en.bitcoin.it/wiki/Contract;

Solidity - main programming language for smart contracts on Ethereum

ERC20 - token (smart contract) standard describes the functions and events that an Ethereum token contract has to implement. Many of coins today is not independent coins but Ethereum Smart contracts working on Ethereum network. There are some ERC tokens you may have seen: Golem, Iconomy, Aragon, EOS, OmiseGO.

Something to read:

https://blockgeeks.com/guides/what-is-ethereum/

https://ethereum.org/ether

https://github.com/ethereum/wiki/wiki

What is an ICO / Pre-ICO

Initial Coin Offering - very similar to crowdfunding and IPO. Bunch of people who has an idea, ambitions and at best a working demo are selling "candy wrappers" for your real Ethers and Bitcoins. For the time being, no ICO gives you guaranty to build anything. And if they will disappear you'll most likely lose money. But sometimes the project can bring big profit (x10-x100) and build a working product. Unfortunately, the success rate is very low and most tokens price is lower that ICO price.

Pre-ICO is a relatively new strategy to get even more money. You propose more profitable conditions before the main sale with some restrictions and when the sale starts you look like you got many investments in short time, even though you may have collected them for a long time. For me, it looks like cheating on the investor.

I'm not telling you that investing in ICO is wrong, I personally has more than 50% of my crypto in different ICOs. But be aware of risks and be ready to say good-bye for your money.

Also be very careful, a lot of scams around i.e. making a similar site to fool you (phishing), hacking ICO sites and more.

What is signals / pump groups / 3% day investments

Scam, scam, scam.

Signals - nobody knows what happens on market and even if somebody would know they wouldn't share it.

Pump groups require the whole article for discussions, but in short - a couple of greedy people use a bunch of stupid greedy people to artificially pump some altcoin to sell it and gain profit.

And people who offer stable >100% monthly return are scammers too, it's not possible to have such high profits and if somebody would be able he wouldn't share.

Contact

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If you need help, have some questions or propositions feel free to contact me at https://t.me/@tmaniac
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