NFT Tech

What is a Blockchain Bridge?

Modern blockchain technology has its limitations, especially with how quickly the Web3 space moves. With that comes the need for more options for users and increased scalability for blockchain developers. That is why blockchain bridges play an important role in the development of blockchain technology.

A blockchain bridge, aka a cross-chain bridge, connects blockchains together so that users can send and receive digital assets and data between different blockchains.

With that comes many questions regarding the impact of blockchain bridges, their purpose, as well as their safety. In this article, we cover it all.

What is a blockchain bridge?

The main point of a blockchain bridge is to act as a way for different blockchains to interact with each other. Many blockchains lack interoperability, meaning that they can’t communicate well with each other on their own. Hence why a bridge has to be implemented.

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Considering assets from one blockchain are generally not compatible with a foreign blockchain, a bridge actually acts as an asset from another blockchain.

For example, say you want to bring Bitcoin to the Ethereum blockchain to spend it, the bridge wraps the Bitcoin in a blanket of code so that it is compatible with the target blockchain.

In the case of Ethereum, the bridge simply turns the Bitcoin token into an ERC-20 token—the native fungible token of Ethereum—which allows it to be used as if it were an Ethereum native token.

Types of blockchain bridges

There are a couple of variations of blockchain bridges. Below are the two types of blockchain bridges that currently exist.

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  • One-way bridge (unidirectional)
    A one-way bridge allows you to send assets only to the target blockchain, but not back to its native blockchain. For example, Wrapped Bitcoin allows you to transfer Bitcoin to Ethereum as an ERC-20 token, but you can’t send ETH back to the Bitcoin blockchain.
  • Two-way bridge (unidirectional)
    A two-way bridge allows you to trade assets freely between blockchains. You can send ETH to the Solana blockchain, and likewise, you can transfer SOL to the Ethereum blockchain.

In addition to the freedom of which direction bridges allow you to send and receive assets, there is also a variation in the bridge’s custodian, or, who controls the assets used to create the bridged asset.

  • Custodial (centralized or trusted)
    If a bridge is custodial, that means only one centralized entity is in control of the assets. Take Bitcoin for example. All wrapped Bitcoin is held by BitGo, a centralized digital asset trust company.
  • Non-custodial (decentralized or trustless)
    A trustless or decentralized bridge operates on the blockchain using smart contracts and algorithms, as a result, users remain in control of their assets.

So what makes a blockchain bridge so significant then?

Why are blockchain bridges important?

All blockchains have their limitations, that’s exactly why bridges have been created.

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Blockchain bridges are important because they enable users to move and utilize their digital assets in more efficient and effective ways, as well as scale to support growth and change.

For Ethereum to keep up with demand, rollups have been implemented. Of course, mainnet blockchains like Avalanche have created a network to enable higher throughput, but at the cost of decentralization.

However, blockchain bridges allow networks that are limited to scale and communicate in ways they were not originally designed to do.

Blockchain bridges enable the following:

  • Cross-chain transfer of digital assets and data.
  • Dapps to access the benefits of various blockchains which enhances their capabilities.
  • Collaboration between different blockchains allows more options for its users.
  • Users to access new platforms and enjoy the benefits of different blockchains.

Blockchain bridges also come with many pros and are the reason why so many people choose to use a bridge, including:

  • Lower transaction fees.
  • Better interest rates for certain Dapps.
  • Own native crypto-assets (you can own a Bitcoin NFT like Rare Pepe on the Ethereum blockchain).

Although there are many benefits to using bridges, you can expect there to be some cons as well. This leads many of us curious to know if blockchain bridges are safe to use.

Are blockchain bridges secure?

Blockchain technology, especially bridges, is still in the very early stages of development so of course there are going to be some concerns. Below is a list of concerns that have been exposed when using blockchain bridges.

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  • Smart contract hacks
    Errors in a blockchain bridge’s smart contract put users at risk of the bridge being hacked and funds being stolen. Most recently, the popular blockchain game Axie Infinity—which utilizes the Ronin bridge—was hacked resulting in $600 million of stolen funds.
  • Custodial risk
    Technically, operators of custodial blockchain bridges could seize the funds of all their users, and even shut down the bridge to stop users from transferring assets.

In general, users of blockchain bridges are at risk if:

  • The smart contract has a bug.
  • The user makes an error.
  • The blockchain is hacked.
  • The bridge gets hacked.
  • The operators have bad intentions.

At this point in time, it doesn’t seem uncommon for bridges to be hacked. That’s why you should always educate yourself on the potential risks of using bridges, as well as the specific bridge you are contemplating using.

Obviously, blockchain bridges provide great opportunities for the market and a promising future for multi-chain interactions. But at what cost? Only time will tell.

NFT Tech

What Is the Avalanche (AVAX) Blockchain?

Although many NFT and crypto enthusiasts enjoy the Ethereum blockchain, we all wish for lower gas fees and quicker transaction times. Well, our wishes have been answered by the Avalanche blockchain.

Avalanche (AVAX) is the fastest smart contracts platform in the blockchain world, as measured by time-to-finality. Avalanche is an open, programmable smart contracts platform for decentralized applications.

Curious to know more about Ethereum’s competitor? Continue reading below to learn more about the Avalanche blockchain.

What is Avalanche (AVAX)?
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Avalanche is a smart contract capable blockchain that focuses on interoperability, scalability, and usability. Often the Avalanche blockchain is referred to as Ethereum’s rival blockchain, due to its smart contract capabilities.

The Avalanche blockchain delivers a scalable blockchain while still maintaining decentralization and security, and emphasizes lower transaction costs, quick transaction speeds, and being environmentally friendly.

Avalanche is powered by its native token AVAX and several consensus mechanisms. The cool thing about Avalanche is that users can create their own interoperable blockchain, and all that is required to do this is a subscription fee.

How does Avalanche blockchain work?
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Many modern-day blockchains like Bitcoin and Ethereum are plagued with a lack of interoperability and problems with scalability and usability. That’s why Avalanche’s mainnet uses three different blockchains to solve this problem.

C-Chain: This chain uses what is called the Snowman consensus protocol and is used to create smart contracts. 

P-Chain: This chain is used to coordinate validators and also uses the Snowman consensus protocol.

X-Chain: This chain is used to manage digital assets and uses the Avalanche consensus protocol.

The Avalanches’ consensus protocol’s main purpose is to check validators’ transaction confirmations at random, by enabling all nodes to work parallel with each other. Essentially, repeatedly doing random checks increases the likelihood of a transaction being true.

The Snowman consensus protocol works similarly to Avalanche’s protocol but uses the blocks in a linear process.

What is Avalanche (AVAX) crypto used for?

AVAX serves as Avalanches’ native utility token. In other words, AVAX is the main currency used on the Avalanche blockchain for things like transaction fees, incentives, and many other use-cases.

The native cryptocurrency is also used for staking AVAX, which secures the blockchain network. As a reward, stakers are given more AXAV—and in some cases—will even earn passive income as a result of staking.

Is the Avalanche blockchain safe?

Overall, the Avalanche blockchain is considered to be safe due to its proof of stake protocol, with nearly $10 billion of staked value securing the network.

However, the DeFi platform Vee Finance which utilizes Avalanche has been exploited twice, with the most recent attack resulting in $35 million of stolen ETH and Bitcoin.

Benefits of Avalanche blockchain
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  • Interoperability
    Avalanche allows different blockchains to share data and various types of cryptocurrency effectively interoperating with one another.
  • Scalability
    Compared to a blockchain like Ethereum, Avalanche was built to be scalable and executes sub-second transaction times along with impressive processing capacity.
  • Usability
    The Avalanche blockchain provides a platform that can easily incorporate new technology and software in various applications and use-cases.
  • Low fees
    Many people consider Avalanche to be one of Ethereum’s main competitors, and with that, Avalanche loves boasting fees as low as $0.12 for creating and minting assets. Compared to Ethereum, Avalanche blockchain fees blow Ethereum fees out of the water.
Avalanche vs. Ethereum

Currently, the main difference between Avalanche and Ethereum blockchains is that AVAX uses a proof of stake protocol, whereas ETH uses a proof of work.

Also, Avalanche has faster transaction speeds of around 4,500 transactions per second (tps), compared to Ethereum’s 15 tps maximum. However, Ethereum is in the process of upgrading to its own proof of stake protocol as we speak.

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It’s hard to say for sure if the Avalanche blockchain will continue to scale to be something great, but as we know it today, Avalanche shows real potential to be a competitor in the blockchain industry. With its incredibly fast transaction speeds and low costs, it gives the current Ethereum network a run for its money.

Curious about how to do your own research when it comes to buying crypto? Make sure to check out our article that teaches you all you need to know about doing your own research.

While you’re at it, you might benefit from learning about one of the safest and most effective investment techniques in crypto, called dollar-cost averaging.

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What is Zcash?

If you have ever used the Bitcoin or Ethereum blockchain, then you know that any transactions that occur on the blockchain can transparently be tracked and verified. But, what if you don’t want your transactions to be displayed for the world to see? That is where Zcash comes in.

Zcash is a fast and confidential cryptocurrency with low fees. Zcash uses the zk-SNARK security protocol to ensure that any party involved in a transaction is verified without revealing any information about the transaction to the other party or the network.

Still curious to know more about this extremely secure cryptocurrency? Continue reading below to learn all about Zcash.

What is Zcash?
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Zcash is forked from the original Bitcoin blockchain, aka an Altcoin. This means that a team of developers made a change to the Bitcoin blockchain’s protocol to create a new version of the blockchain, which is known today as Zcash.

Eli Ben-Sasson, Alessandro Chiesa, Christina Garman, Matthew Green, Ian Miers, Eran Tromer, and Madars Virza, who are scientists from MIT, Josh Hopkins, and other respected intuitions noticed in 2014 that there were security flaws in the original Bitcoin blockchain.

That’s why they decided to create Zerocash, which was later rebranded to Zcash, in 2016.

With Zcash, you can pay your friends, family, and service providers while taking advantage of Zcash’s shielded transactions that keep all your financial information private and in your control.

Also, you can use Zcash at many of your favorite stores and online retailers. From buying bagels to buying a beach vacation, Zcash is accepted by many retailers.

Understanding Zcash

At its core, Zcash is similar to Bitcoin with a maximum supply of 21 million coins, and approximately 14 million coins in circulation at the time of writing this. The main difference between Bitcoin and Zcash, however, is that Zcash encrypts its transaction data, whereas Bitcoin does not.

With that, the entire Zcash blockchain is encrypted, plus the security protocol zk-SNARK adds even more anonymity and security for its users.

Moreover, Zcash currently utilizes a proof-of-work (PoW) hashing algorithm called Equihash, which is incompatible with mining hardware and software used to mine Bitcoin.

However, a blog post published on November 19, 2021, by the company, stated they are working on transitioning from a PoW algorithm to a proof-of-stake (PoS) algorithm in the next three years, which is more environmentally friendly and efficient.

How does Zcash work?
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When it comes to using Zcash, you have two options to choose from.

  • Transparent addresses (t-addresses): mean that addresses can be tracked on the Zcash blockchain similarly to the Bitcoin blockchain.
  • Shielded addresses (z-addresses): are encrypted using zk-SNARK transactions, meaning you can’t see the data on the blockchain so transactions sent to them are not visible, nor are the funds a z-address holds.

That means if a t-address sends funds to a z-address, public eyes are not able to see where the funds were sent to. Likewise, if a z-address sends funds to another z-address, the transaction is completely shielded from the view of public eyes. This creates one of the most privatized and secure ways to send and receive cryptocurrency.

To use Zcash, you will first need to get your own Web3 wallet, and then purchase Zcash from any of their supported cryptocurrency exchanges.

After purchasing your own Zcash, you can use it to buy various goods and services, or you can exchange it for another type of money, including US dollars, Euros, or another fiat currency.

The future of Zcash

Considering Zcash was created to be an efficient, safe, and anonymous way to transact, Zcash aims to be around for years to come. And although Zcash is one of the top privacy coins available on the market, the developers promote complying with all regulatory requirements.

How safe is Zcash?
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Compared to a credit card or cash, Zcash is much more secure because it is attack and censorship-proof, private, and only auditable with the users’ permission. Even when compared to Bitcoin, Zcash is more secure thanks to its encryption and an extra layer of security through zk-SNARk.

Below are some of the key features of Zcash’s safety.

  • Decentralized and attack-resistant
    Zcash is decentralized, meaning that it is maintained by a network of people and machines, not a centralized entity like a bank. Also, there is no central database, single point of failure, and no authority that can shut it down, you are in full control of your money.
  • Private addresses & transactions
    Zcash’s privacy means that users can send and receive cryptocurrency without disclosing any information about the transactions. However, if users want to be more transparent, they have that option as well.
  • Audit- and regulation-friendly
    Private addresses and transactions can be disclosed by users if they need to share information or comply with third-party audits and regulatory requirements.

Zcash is likely one of the most secure and confidential forms of cryptocurrency on the market with many pros that users can benefit from. As the world continues to evolve and accept cryptocurrency as a form of payment, I wouldn’t be surprised to see Zcash at the forefront of the market. 

Their dedication to security and privacy is admirable, and their commitment to comply with all regulatory requirements is promising.

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What Is Fully Diluted Market Cap in Crypto?

Trying to determine the future value of a cryptocurrency can be difficult, especially if it is a new token. However, metrics like fully diluted market cap can help you make the best decision when it comes to investing in crypto.

A fully diluted market cap in crypto is the total value of crypto at today’s token price if the total supply of cryptocurrency were in circulation. To determine the fully diluted market cap, multiply the token’s current value by the total supply of cryptocurrency.

What is fully diluted market cap in crypto?

A cryptocurrency’s fully diluted market cap is just one piece of the puzzle when it comes to determining the overall risk and value associated with buying crypto.

Not to be confused with market cap or circulating supply, a fully diluted market cap is an estimate of what the market cap will be once all the tokens in a project are in circulation. In other words, you are predicting the future market cap of a cryptocurrency.

Fully diluted value (FDV) = Maximum supply of a tokens x Current market price

To calculate the fully diluted market cap of a cryptocurrency simply multiply the token’s individual value by the maximum supply of tokens.

For example, if there are 100,000 tokens total in a project, and the token price is at $5.00 each, multiply 100,000 tokens by $5.00 to determine the fully diluted market cap of $500,000.

Limitations of fully diluted market cap
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Determining the fully diluted market cap of a cryptocurrency can be a good factor to help you decide if a cryptocurrency might be a good investment or not, however, there are some things that the fully diluted market cap does not take into consideration, including:

  • Future developments of the project
  • Additions or departures from the development team
  • Future market relevance of a project
  • Competitor cryptocurrencies

In addition to these factors not being taken into consideration, a fully diluted market cap does not take into account the effect that an increase in token supply will likely have on the individual token value. 

Rather, if a token has a circulating supply of 50,000, and a token price of $5.00, it’s assuming that the token price will remain at $5.00, even once the maximum supply of 100,000 is in circulation. However, this is generally not the case.

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That being said, a fully diluted market cap cannot be the sole metric used to determine if a cryptocurrency project will be a good investment or not.

There are several other factors that play a role in the overall value of cryptocurrency, and the fully diluted market cap is just one of them. To learn more about how to do your own research in crypto, make sure to check out our guide.

Also, if you are considering investing in crypto, consider trying one of the safest investment strategies, known as the dollar-cost averaging method.

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What Is Circulating Supply in Crypto?

Investing in cryptocurrency can be overwhelming. Knowing all the different terms such as circulating supply, can help you make better investing decisions though.

Circulating Supply in crypto is the total number of coins that are currently available for trade and are circulating in the market and in the general public. When a new crypto is released, only a certain number of tokens go into circulation. The circulating supply is always less than the fully diluted supply.

What is circulating supply in crypto?
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Below is a more in-depth explanation of circulating supply and why it is important.

When a cryptocurrency is launched, not all of the tokens are launched at the same time. Generally, a set amount is launched initially, then over a period of time, the remaining tokens are mined into the blockchain. 

For example, Bitcoin is mined approximately every ten minutes until it reaches its fully diluted amount of 21 million coins. Also, coins may be burned to permanently reduce the total supply in circulation.

It’s important to note that the circulating supply only refers to the total amount of coins available to the public, not the fully diluted (max supply) overall.

Why is circulating supply important in crypto?
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The circulating supply is important in crypto because once multiplied by the per-unit price, investors can better understand the approximate valuation of various cryptocurrencies, also known as the market cap. To do this, simply take the circulating supply and multiply it by the current market price of the crypto.

So, if there is a circulating supply quantity of 100,000 crypto coins and the current market value of the coin is at $5.00 each, that means the market cap is $500,000. Figuring the market cap is important because it can be used to help determine the overall risk and stability of crypto that you might be considering investing in.

Generally, a cryptocurrency with a greater market cap (greater than $10 billion) means that it is less likely to be affected by significant fluctuations in the market, hence it may be a safer bet in terms of investing.

Whereas a cryptocurrency with a lower market cap (less than $1 billion) is greatly affected by significant fluctuations, such as if a holder with a lot of tokens sold off their supply.

Ultimately, the circulating supply of crypto is an important metric to know, especially if you are considering investing in crypto.

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What Is Market Cap in Crypto?

With so many different cryptocurrencies flooding the market, it’s important to understand ways that we can determine the risk and potential upside of various cryptos. That’s why market cap in crypto is important to understand.

Market cap in crypto is the total dollar value of a token multiplied by the total amount of currency that’s currently in circulation. A cryptocurrency’s market cap highlights the long-term stability of an asset. Generally, crypto with a large market cap indicates more stability, smaller caps are more susceptible to market sentiment.

What is market cap in crypto?
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In general, most people tend to look at the market cap as an estimate of the overall stability of a cryptocurrency. The thought is, the greater the market cap, the better a cryptocurrency will perform overall in a volatile market. 

Bitcoin is a good example of crypto with a large market capitalization, which seems to do well overall. However, that’s not to say that it doesn’t have its ups and downs.

What about circulating supply and fully diluted supply? Great question! Circulating supply is the total supply of cryptocurrency that is currently flowing through the market. Fully diluted supply is the total supply of crypto, including the amount that is not currently circulating in the market. 

Depending on the preferred method of who is supplying the market cap data, some will measure the cap using the currently circulating supply, while others will use the fully diluted supply.

Make sure you are aware of how a market cap is being measured if you are using the data to help with an investment decision.

Why is market cap in crypto important?
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Market cap in crypto is important because it’s used as a tool to measure the overall potential of a certain cryptocurrency and to compare value across other cryptocurrencies. Market cap can help indicate the growth potential of certain crypto and whether it’s safe to buy, compared to others.

Below is an example of how you can use market cap to help compare value across various cryptocurrencies:

  • Say Cryptocurrency A has 200,000 coins in circulation and each coin is worth $1, it’s market cap is $200,000.
  • Say Cryptocurrency B has 50,000 coins in circulation and each coin is worth $2, it’s market cap is $100,000

This shows that even though the individual price of Cryptocurrency B is higher than Cryptocurrency A, the overall market cap of Cryptocurrency A is double Cryptocurrency B’s.

It is still important to note that many cryptocurrencies’ market cap still fluctuates drastically because the overall market is extremely volatile.

What can you do with market cap knowledge in crypto?
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With the knowledge of a cryptocurrency’s market cap, you are able to compare the total value of one crypto with another, allowing you to make better investment decisions. Cryptocurrencies are classified into three categories according to their market cap.

Small-cap: Small-cap cryptocurrencies have a market cap lower than $1 billion and are at the highest risk for fluctuations based on market sentiment.

Mid-cap: Mid-cap cryptos have market caps between $1 billion and $10 billion. Mid-cap cryptocurrencies generally have greater potential upside, but also higher risk.

Large-cap: Large-cap cryptos, like Bitcoin and Ethereum, have a market cap of over $10 billion. These are considered to be the lowest risk investments because they have already proved a positive track record of growth. Also, large caps can withstand higher volumes of investors cashing out without the price being impacted too much.

Knowing what market cap in crypto is and how it can help you determine risk when investing in cryptocurrency is important, especially considering how volatile the current market is.

Always do your own research, even if a certain crypto has a large market cap.

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What is KYC in Crypto?

With all that is happening in the world, as well as new technologies, many people are turning to cryptocurrency exchanges to invest their money. Considering crypto’s decentralized economy, however, many users have a problem when it comes to KYC.

KYC, aka, know your customer, refers to a cryptocurrency exchange’s obligation to perform certain identity and background checks on its customers before allowing them to use their platform. KYC is used to deter money laundering and other illegal activities that may occur when using crypto exchanges.

What is KYC in crypto?
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KYC is required by many cryptocurrency exchanges in the U.S. and is used to combat potential money laundering activities in the crypto space and beyond. The problem is that many people who are currently involved in crypto and its surrounding technology are all for decentralization, which revolves around anonymity.

For crypto exchanges, KYC is a way to identify and confirm that a customer is who they say they are. It’s a multi-step process that helps to prevent the creation and use of fraudulent accounts.

Some of the most popular cryptocurrency exchanges including Coinbase, Binance, Kraken, and Gemini abide by KYC regulations to stay compliant with the law.

That is why you will notice that many crypto exchanges require your name, DOB, address, a copy of your ID, as well as a picture of you holding your ID to prove it’s not stolen.

Why do crypto exchanges require KYC?
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Cryptocurrency exchanges require KYC to establish the legitimacy of a customer’s identity and identify risk factors. KYC procedures help prevent identity theft, money laundering, financial fraud, terrorism financing, and other financial crimes.

Moreover, cryptocurrency’s decentralized aspect opens the door to even more financial crime opportunities. If you know the government, they like to have their hands in just about everything, and in the case of KYC and crypto, even more so.

If crypto exchanges didn’t adhere to KYC law, they’d simply be breaking the law and would be heavily fined for their negligence. 

A prime example of this comes from BitMEX, the cryptocurrency and exchange derivative platform that was fined a hefty $100 million by the Commodity Futures Trading Commission (CFTC), in August 2021, for failing to implement anti-money laundering and KYC programs.

That being said, we can’t be mad at the cryptocurrency exchange, they’re just abiding by the law.

What are the pros of KYC in crypto?
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It goes without saying that there are many pros when it comes to KYC in crypto, including:

  • KYC limits fraud caused mostly by identity hiding
  • KYC prevents money laundering and other illegal financial behavior
  • KYC increases the country’s stability and investment by making the financial structure more trustworthy and less volatile
  • KYC reduces the uncertainty and helps institutions to lend more to clients while increasing profits
  • KYC helps investors assure the security of their personal data and prevents fraudsters from gaining access to their accounts
  • KYC enables clients to recover their accounts if access is lost
  • Without KYC, vendors have no idea who their consumer is, making it impossible for them to defend themselves from harmful behavior.

KYC doesn’t only benefit exchanges and the government, more importantly, they protect the customers who are using these crypto exchange platforms.

From assisting in a swift recovery of stolen funds to allowing customers to exchange larger sums of money in a single transaction, KYC is beneficial for everyone.

What are the cons of KYC in crypto?
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Given the digital state of crypto, and all that’s involved in the new digital economy, some may argue that KYC has cons as well, such as:

  • KYC is seen as an extra hurdle to accessing the cryptocurrency and Web3 space
  • Investors may be concerned about the privacy and security of their personal data as a result of the KYC procedure

If you ask me, the pros of KYC far outweigh the cons, especially when it comes to crypto. Most of us will just have to learn to live with KYC laws until something better is implemented.

Otherwise, there are some options to completely avoid KYC when it comes to cryptocurrency exchanges.

How to avoid KYC in crypto
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Keep in mind that KYC is a good thing for users of crypto exchanges, but, if you are completely against KYC, I understand.

Always do your own research before trading any kind of cryptocurrency and make sure you’re aren’t breaking any local laws. This article is strictly for entertainment purposes only.

To avoid KYC in crypto, you will need to find a non-custodial crypto exchange (custody of the wallet is 100% in your control). A good non-custodial crypto-exchange platform encrypts private communication, keeping your fiat-based identity secret.

Although I won’t mention any specific non-custodial exchanges here, they do exist. I’m going to leave it up to you to find one that works best for you and your situation. 

Also, keep in mind that laws and regulations are always changing. So, just because a crypto exchange advertises no KYC, that doesn’t mean it will stay that way.

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More and more crypto exchanges are beginning to implement KYC due to the government cracking down on exchanges that don’t currently perform KYC checks.

As the crypto space continues to evolve and become adopted by the masses, I expect the government to get involved as much as possible.

That being said, I think KYC is a good thing overall, but only time will tell if there are better options to achieve the same results, with less invasion of customers’ privacy.

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What is Dollar Cost Averaging in Crypto?

Let’s say you want to invest in a cryptocurrency like ETH, but you’re unsure of when the best time to invest is. The mathematically smartest way to do this is by implementing the dollar-cost averaging investment strategy.

What is dollar-cost averaging in crypto?
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Dollar-cost averaging (DCA) is an investment method in which you invest a set amount of money in smaller increments at regular intervals. This allows you to profit from crypto market downturns without putting too much cash at risk at any particular moment, allowing you to maintain more liquidity and still profit from market increases.

DCA is not a new strategy, in fact, this investment method has been used for quite some time in the stock market with great success. When using the dollar cost averaging method, you are buying in at both the highs and the lows in the market.

Ultimately, DCA averages out your investments so that over time you are putting money into your choice of crypto, without being drastically affected by extremely high or low points, as much as if you were to invest a large sum all at once.

How do you use dollar-cost averaging in crypto?
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To implement the dollar-cost averaging method, simply choose a set amount of money you want to invest into your choice of crypto, over a set period of time. Then, regardless of where the market sits, you keep investing your money until you reach your set time.

It may be a good idea to create a spreadsheet to keep track of your investments as well. Once you start investing, the most important thing to do is stay committed to your goal. This can be the hardest part of the dollar-cost averaging process, but it will be worth it in the long run.

The temptation to withdraw money from your investments once you began profiting can be hard to resist, but it’s critical that you stick to your plan in order to earn the most, and minimize your risk.

Is dollar-cost averaging a good idea?
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Dollar-cost averaging is a good idea because it allows you to invest smaller amounts of money over a longer period of time, eliminating the fear of losing all your money. Also, it’s easier to commit to investing a small set amount of money as opposed to large sums of money all at once.

Although investing large amounts of money all at once has the maximum gains if done at the right time, DCA has been proven to avoid major losses. DCA is also important because it eliminates the physiological barrier to investing.

As well, instead of wasting your time watching the market for dips every day, you can spend your time more wisely learning a new hobby or increasing your knowledge in other ways.

How often should you invest in dollar-cost averaging?
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You should utilize the dollar-cost averaging method as often as needed to achieve your financial goals or as your wallet allows. This may equate to days, weeks, months, or even years of investment strategy.

Keep in mind that trading platforms such as Coinbase and Gemini charge a fee each time you submit a transaction. So if you are transacting often, you are going to incur more fees when using the dollar-cost averaging method. It may be wise to extend your transactions into monthly or even bi-monthly increments to avoid these fees.

If you are investing in crypto on a weekly basis and you are paying a fee every time, this will cut into your overall profit, so transacting less frequently may be the best way to optimize your DCA investment strategy.

Also, considering that DCA is generally a long-term investment strategy, your profit gained overtime should more than cover the cost of any transaction fees you may incur.

Example of dollar-cost averaging in crypto
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If you are looking to utilize the dollar-cost averaging method in crypto, you can use a cryptocurrency exchange such as Coinbase or Gemini to set up recurring purchases of your choice of crypto. This allows you to effortlessly invest in crypto without having to do anything except reap the profits.

For example, a person whose dollar-cost averaged into Bitcoin by purchasing $5 weekly in 2020 would have earned $692 from a total investment of $275, yielding a 160 percent return.

Is dollar-cost averaging crypto safe?

Dollar-cost averaging cryptocurrency should be approached with extreme caution and thoughtfulness. Not all crypto will result in a good return on investment. Always do your own research (DYOR) before decding to use the DCA investment strategy for investing in crypto.

However, if you DYOR and invest in a sustainable cryptocurrency, the DCA strategy is one of the safest investment strategies known in the game.

Final thoughts

Overall, if you are interested in investing in crypto but you don’t want to risk losing all your hard-earned money, then dollar-cost averaging might be the best option for you.

Simply choose your crypto, decide how much money you want to invest, and then figure out the best increments in which you want to buy crypto and for how long. Play your cards right and you may just end up with a good hand.

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How to Properly Do Your Own Research for NFTs and Crypto

Between the mass amounts of NFTs flooding the market, and the numerous cryptocurrencies available to invest in lies a group of people who are eager to get started in the space, and perhaps benefit from their investments.

However, considering both markets are so new and still very little is known about the longevity of both NFTs and crypto, it can quickly become an overwhelming feat that many don’t feel comfortable attempting. 

For those who do try, a majority may end up losing money resulting in a tight spot that can be difficult to climb out of. That’s why it’s so important to always do your own research (DYOR). But, what is the best way to conduct proper research?

How to properly do your own research

When it comes to doing your own research, there is a lot to take into consideration to ensure you are investing your hard-earned money and time into things that will yield you the best results with the least amount of risk.

Let’s break the research down into two separate categories starting with NFTs.

How to DYOR when buying NFTs

When you DYOR on which NFT to buy, there are a few things you need to look into. However, before looking into these very important aspects, the first rule should be to find an NFT that you genuinely like. That way regardless of what happens to the value of your NFT, you aren’t upset if it drops below what you purchased it for.

Here’s what to research when attempting to buy a good NFT with long-term value. I like to refer to these as the three C’s. The creator, community, and the contract. Let me explain.

1. Creator

The first task during your NFT research should be to find out who the creator behind the brand is. Generally, a reputable NFT project will have a doxxed creator(s) and be completely transparent with their intentions of the project.

Remember, you’re investing in the person behind the NFT and their ability to execute, not necessarily the NFT itself. So it’s important to understand that the success of any NFT project ultimately depends on the creator’s ability to see it through.

I’m well aware that the common misconception is to look at a project’s roadmap to determine if the NFT will be sustainable or not, but in all reality, a roadmap is nothing more than an idea. Anyone can say what they’re planning to do, but actually executing that plan is what will make or break any NFT project.

An example of a good NFT project is VeeFreinds, a project built around meaningful intellectual property by a successful entrepreneur, businessman, and investor Gary Vaynerchuk. Knowing Gary’s history of building proper brands and businesses, combined with his ability to spot trends far in advance, you can assume Gary may be a good person to invest your money in.

If you find that you can’t figure out who the human is behind a project, then it’s best to approach the rest of your NFT research with extreme caution and thoughtfulness. Generally speaking, if a creator behind a project isn’t willing to disclose who they are, then it’s likely that the person is not confident in their ability to execute or they have bad intentions.

2. Community

After determining who the creator is behind an NFT project and if you feel good about them, next you can move on to exploring the community. When researching an NFT project’s community, make sure to cover all your bases.

Currently, platforms such as Twitter, Discord, Instagram, and YouTube can all be places you may find an NFT community hanging around. A good NFT project will usually have an overall positive outlook on the project, the team, and the future of the brand, all projected by members of the community.

You should always feel free to ask any questions you may have directly aimed at the community, this will not only help you understand the project better but will also give you a better understanding of what kind of people are involved in the community.

A solid community will be happy to answer any questions you might have or at least give you some direction on where to find the answers.

Other signs to watch for when researching any NFT project are how often they post on social media, their interactions with others, and how willing they are to help others.

If a project’s feed is only full of free giveaways demanding retweets and shares in return, then you may want to think twice about why they are doing this, and what benefits it provides for their brand in the long run. You may find that the only benefit is short-term gains and exposure

3. Contract

If you like what you see in both the creator and community, then you can begin to dig even deeper into the actual utility of the project and what value it provides you through the smart contract.

It’s fair to say that not every NFT you look into buying will have a smart contract. If you are buying a nice piece of art or a collectible item, you may simply be buying that NFT as a collectible, and that’s completely fine if that’s what you want.

However, there are many NFTs that may offer actual utility to collectors, and sometimes that utility will also come with very specific terms and conditions. If you can’t find the terms and conditions attached to the NFT itself, then you should be able to view everything included with the purchase of said NFT on the brand’s official website.

If you value everything that the NFT has to offer you as a collector and you’ve covered the three C’s extensively, then you should be all set to purchase your NFT.

How to DYOR when buying cryptocurrency

Buying and investing in Crypto is a similar process to buying good NFTs, but you’re looking for different things. Here’s how to do your own research on when buying crypto.

1. Purpose

Almost all cryptocurrencies should aim to serve a purpose. ETH, for example, exists as a reward for verifying blocks and transactions on the Ethereum blockchain. ETH is a great example of a cryptocurrency with a purpose considering that Ethereum is the most used blockchain for trading NFTs.

Another example of a cryptocurrency that serves a purpose is MANA—a token on the Ethereum blockchain that powers the virtual world of Decentrland. MANA is the native token of Decentrland, allowing users to buy and sell land and other digital assets within the Decentraland economy.

If the crypto you’re looking to invest in doesn’t aim to solve a problem or serve a purpose, then you may want to move on.

2. Whitepaper

Once you’ve determined that the crypto you’re looking at exists to serve a purpose, next you should figure out how the currency functions and how it will execute its purpose. That’s exactly what the whitepaper is for.

The whitepaper is a publicly available document that lays out the goal of the cryptocurrency and how it plans to achieve that goal. When reviewing the whitepaper, it should be made clear exactly how the crypto aims to serve its purpose.

If the whitepaper appears to be poorly written or you simply can’t understand its context, then either move on or find someone who can interpret what the whitepaper states. It’s best not to invest in anything you don’t completely understand.

3. Creator(s)

Let’s be honest, any legitimate cryptocurrency project will have members of their team listed publicly as well as any partner organizations who support the development of the project. You may not recognize every single name if any, but you should always do the research to find out who each individual is and what their background is.

A person or company’s history can tell you a lot about their reputation and what you might expect to see from such people. If you can’t find anything about the founders or if they have a poor reputation, this should be a huge red flag.

4. Sustainability

Now that you’ve taken into consideration everything a cryptocurrency has to offer and aims to achieve, you can make an educated decision on the overall sustainability of the crypto.

Ultimately, cryptocurrency worth investing in should provide some sort of value or aim to solve a problem that the creator of the currency has deemed an issue.

If you come to the conclusion that what the creators have determined to be a problem actually is an issue, and their plan of action using the cryptocurrency to solve that problem seems reasonable, then you may decide to invest some of your own money into it in hopes of a return on your investment.

One of the lowest risk investment strategies for investing in cryptocurrency is the dollar-cost averaging method. Dollar-cost averaging is a strategy that many investors have used, and continue to use, due to its low risk and a high potential for substantial gains.

DYOR best practices

Overall, when doing your own research there are some best practices that you may want to follow to minimize your risk when investing. Here are some simple points to consider:

1. Never spend more money than you can afford to lose. Investing smaller amounts over a longer period of time will decrease risk, but not necessarily your gains.

2. Patience is key when it comes to doing your own research. Even if you see the floor of an NFT project steadily rising, or a cryptocurrency blasting off, it’s always best to make sure you do thorough research before committing to anything. 

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Gary Vee recommends at least 50 hours of research before pulling the trigger on any NFT, but this holds true for any investment you may be considering.

3. Don’t take anyone else’s word. It’s one thing if someone tells you to look into something, but to blindly invest your money into something you don’t completely understand is a huge risk. Just because someone who’s very knowledgeable in the space, or an influencer is buying into something doesn’t mean it’s a good investment.

Take everything with a grain of salt and always DYOR to come to your own conclusion. 

4. Join a community. If you can find a good community that is talking about the project, you’re more likely to come up with additional questions, seek more answers, and gain more knowledge. Any insight that you can get on a project is good, so seek out others who are talking about it as well.

5. Avoid falling victim to fear of missing out, better known as FOMO in the crypto community. FOMO can be brought on by a number of things such as hype induced by influencers and groups of people, limited quantities, and pumping floor prices.

If you see this, just be aware that these are tactics used to induce fear into the market so people buy without giving much thought to what they’re actually buying.

Final thoughts

The moral of this article is to always do your own research in order to come to your own conclusions, regardless of the circumstances. If you make sure to do your own research every time you’re considering investing in crypto and NFTs, then you’re more likely to invest in the right things, and reduce your overall risk of investing in a bad project.

So what will it be? Will you take the time to do the research? Or are you going to risk it all and blindly invest your hard-earned money? The choice is yours.

Finance NFT

A Beginner’s Guide to Staking Crypto

Any active crypto investor should be familiar with the concept of staking, aka winning bags for HODL. Let’s learn more about what staking is, why you may want to do it, and how staking can help optimize your portfolio.

In web3, there are many opportunities to automate your alpha. When I think of staking, I think of the age-old adage: let your money work as hard for you, as you work for it.

While I wouldn’t consider staking an aggressive investment strategy, it is a relatively safe and easy way to actively earn interest on your hard-earned money.

What is staking?

In crypto, staking is the process of committing assets to a blockchain network. By committing assets, you allow block transactions to be validated. The more staking occurs, the more robust a blockchain becomes.

So by improving their reliability, networks are willing to reward you with more coins for staking, thus earning you interest for basically just hitting a button and walking away.

How does staking work?

Your commitment to an asset is used to confirm transactions and provides stability to a network. When the protocol chooses your commitment to confirm blocks of transactions, you are rewarded with more cryptocurrency as the validator of that transaction.

Proof-of-stake currencies rely on staking as a means for validating transactions. Proof-of-work blockchains, like Bitcoin, do not permit staking and instead rely on mathematical puzzles to reward validators.

The benefits of staking

When it comes to staking, there are many benefits you may discover, such as:

  • Earning interest on your cryptocurrency
  • Low barrier to entry (no hardware, expensive tools, or technical expertise needed)
  • Requires less energy than mining crypto

So if I stake ETH, I don’t have to be a programmer, I don’t have to gobble up carbon, and I earn interest? What’s the catch?

Well, for networks like Ethereum, you need meaningful holdings to be eligible for staking. You couldn’t buy 1 ETH and expect to win rewards as a validator. More on that in a sec.

What cryptocurrencies can I stake?

To stake, a cryptocurrency must support a proof-of-stake model. For example, Bitcoin only allows proof-of-work (here’s the exception to bitcoin staking).

Ethereum, on the other hand, incorporates a hybrid model of proof-of-work and proof-of-stake and plans to go full stake with Ethereum 2.0.

Here are some popular cryptocurrencies you can stake:


The OG programmable blockchain, Ethereum allows staking with returns as high as 17 percent, but you need a minimum of 32 ETH to qualify. With that said, platforms like Aave and Polygon, built on Layer 2 Ethereum, enable staking of their tokens with no minimum required.

Staking MATIC (polygon) and AAVE is an easy but effective way to put ETH-universe dollars to work. These platforms allow you to quickly exchange your ETH for L2 tokens, earn interest, and bring it back to L1 in minutes. Now we just need to lower gas fees.


Tezos incorporates a proof-of-stake model, known for its energy efficiency compared to Bitcoin’s proof-of-work. You can stake Tezos with solid returns on platforms like Everstake. Tezos has proven its reliability over the years and there are a lot of new projects launching on their network.


Solana, Ethereum’s main scalable competitor, has several wallets that support staking such as and

Solana rewards as much as 6.35% APR as of September 2021.
You can learn more about staking Solana here.


Staking Cardano is comparable to a traditional savings account, whereby holders can stake their assets with the click of a button and expect positive long-term results.

Even after staking, you can move your ADA freely and take it out of staking completely if you’d like.


Staking on Polkadot requires a minimum of 120 DOT and they have a set maximum of nominators at 22,500.

You can not transfer your tokens on Polkadot while they are bonded. The current annual yield on Polkadot is around 10%, according to Ledger.

How to stake crypto:

Using an exchange

Crypto exchanges can be used to stake cryptocurrency. Bear in mind that you do not actually hold the cryptocurrency to earn rewards for staking. Rather, you are providing liquidity for the exchange to stake on your behalf.

Coinbase would be a popular example.

Using a wallet

Some wallets also permit staking. LedgerLive is one of the most popular choices for users looking to stake cryptocurrency directly from their web3 wallet.


If you are worried about slashing (losing your funds due to price drops), you can employ a staking service provider that will closely monitor your funds around the clock to avoid that doomsday scenario.

DeFi staking

As mentioned, an L2 Ethereum defi protocol like Aave allows you to easily stake cryptocurrency. There are a plethora of defi platforms that enable staking.

Similar to an exchange, when using a defi platform, you are lending your cryptocurrency to the protocol. The most secure way to stake an asset is directly on a cold-chain wallet. Defi protocols, however, are popular because of their ease of use.

Some tools like Binance offer flexible versus locked staking. If you choose flexible staking, you earn lower APYs but can more easily liquidate your funds.

Ultimately, there are many options for staking in the Defi space. It’s up to you to decide which option is right for you and understand the risks that are involved in the staking process.