📔Beginner

Wallet Types for Different Cryptocurrencies:

Hot Wallets:

• ETH: Metamask & Trust Wallet

• SOL: Trust Wallet, Phantom, & Solflare

• BSC: Trust Wallet & Binance Chain Wallet

• BTC: Binance Chain Wallet, Xverse

Cold Wallets:

• ETH, SOL, BSC, BTC: Ledger S, X, & T

Multi-Signature Wallets:

• ETH: Gnosis Safe

• SOL: Solana Multisig

• BSC: Binance Multi-Sig

• BTC: BitGo

Hot Wallets: Online wallets for easy access and daily transactions but are more vulnerable to hacking. Cold Wallets: Offline wallets used for secure, long-term storage of cryptocurrencies. Examples include hardware and paper wallets, offering better protection from cyber threats. Multi-Signature Wallets: Require multiple keys to authorize transactions, enhancing security and preventing unauthorized access. Commonly used by groups or organizations.

Smart Contracts:

Smart Contracts: Self-executing contracts with the terms of the agreement directly written into lines of code. They automatically execute and enforce the contract when predetermined conditions are met, without the need for intermediaries. They run on blockchain platforms, ensuring transparency, security, and immutability.

Key Features:

• Automation: Once the conditions are met, the contract executes automatically.

• Transparency: All parties can see the terms of the contract and the execution process.

• Security: They are encrypted and stored on the blockchain, making them tamper-proof.

• Immutability: Once deployed, the code cannot be changed, ensuring the contract terms are enforced as written.

Examples of Smart Contracts:

Ethereum (ETH):

• DeFi:

  • Uniswap: A decentralized exchange that uses smart contracts to facilitate automated token swaps.

  • Aave: A decentralized lending and borrowing platform where users can earn interest on deposits or borrow assets.

• Games:

  • Axie Infinity: A blockchain-based game where players can earn tokens through gameplay and contributions to the ecosystem.

  • Decentraland: A virtual world where users can buy, develop, and trade virtual real estate.

• DAO (Decentralized Autonomous Organization):

  • MakerDAO: A decentralized credit platform that allows users to generate DAI, a stable coin pegged to the USD.

  • Compound: A protocol that allows users to lend and borrow cryptocurrencies directly from their wallet.

Solana (SOL):

• DeFi:

  • Serum: A decentralized exchange (DEX) offering high-speed and low-cost trading.

  • Raydium: An automated market maker (AMM) and liquidity provider built on the Solana blockchain.

• Games:

  • Star Atlas: A space-themed MMORPG where players can explore, build, and trade within the virtual universe.

  • Aurory: A turn-based strategy game that utilizes NFTs.

• DAO:

  • Mango Markets DAO: A decentralized autonomous organization managing Mango Markets, a Solana-based trading platform.

Staking:

Staking: The process of actively participating in the validation of transactions on a blockchain that uses a Proof of Stake (PoS) consensus mechanism. In PoS-based blockchains, participants, known as validators, lock up a certain amount of cryptocurrency (their "stake") to support the network and earn rewards.

Key Concepts:

• Proof of Stake (PoS): A consensus algorithm where validators are chosen to create new blocks and confirm transactions based on the amount of cryptocurrency they hold and are willing to "stake" as collateral.

• Validators: Individuals or entities that participate in the staking process. They are responsible for validating transactions, securing the network, and adding new blocks to the blockchain.

• Staking Rewards: Validators earn rewards for their participation in the network. These rewards typically come in the form of additional cryptocurrency, which is proportional to the amount staked.

• Slashing: A penalty mechanism in PoS blockchains to deter malicious behavior. If a validator acts dishonestly or fails to meet network requirements, a portion of their staked cryptocurrency can be "slashed" (confiscated).

Benefits of Staking:

• Earnings: Stakers earn rewards, typically in the form of additional tokens, providing a source of passive income.

• Network Security: By staking their assets, validators help secure the network, making it more resistant to attacks.

• Governance: In some networks, stakers have a say in the governance and decision-making processes of the blockchain.

Risks of Staking:

• Market Volatility: The value of staked tokens can fluctuate, affecting the value of rewards.

• Lock-Up Periods: Some networks require tokens to be locked up for a certain period, limiting liquidity.

• Slashing Risks: Validators may face penalties for dishonest behavior or downtime.

Examples of Staking Cryptocurrencies:

• Ethereum 2.0 (ETH): Transitioning from PoW to PoS with its Beacon Chain. Users can stake ETH to become validators.

• Cardano (ADA): Uses the Ouroboros PoS algorithm. ADA holders can stake their coins through various wallets like Daedalus or Yoroi.

• Solana (SOL): Validators and delegators (stakers) secure the network and earn SOL rewards.

• Polkadot (DOT): Employs a nominated Proof of Stake (NPoS) model, where nominators back validators with their stake.

Crypto Glossary and Trading Definitions:

• ATH (All-Time High): The highest price a coin or token has risen to.

• Blockchain: A digital ledger in which transactions made in a cryptocurrency are recorded chronologically and publicly.

• FUD (Fear, Uncertainty, and Doubt): The malicious spread of negativity to cause inexperienced members to sell.

• Fiat: A currency that a government has declared to be legal tender but is not backed by a physical commodity (e.g., $, £).

• ICO (Initial Coin/Token Offering): When a new coin is sold at a base price before the launch of the service it is associated with.

• Mining: The act of contributing processing power to a blockchain network to help determine the next block.

• Paper Wallet: A printed document containing the information linked to your wallet (e.g., private key, public key).

• KYC (Know Your Customer): A standard process used by financial institutions to verify the identity of their clients.

Technical Analysis (TA): Financial analysis techniques that use patterns in market data to identify trends and make predictions.

• Stop Buy: An order triggered by a traded crypto going above a price set by the trading party.

• Stop Loss: An order triggered by a traded crypto falling below a price set by the trading party.

• Whales: Traders with massive amounts of the currency being traded. They can manipulate the market price in the short term for financial gain.

• Long Position (A Long): Making a purchase with the hope that the item will increase in value so it can be sold for a profit.

• Margin Short (Shorting): Selling something that you've borrowed with the hope of buying it back later at a lower price.

• Margin Trading: Trading on money that has been loaned to you by an exchange. A deposit of capital must be placed to receive the loan.

• Market Order: Placing either a buy or a sell order on the market with no regard for price.

Avoid Crypto Scams:

• Use Strong Passwords: Create complex passwords that include a mix of letters, numbers, and special characters.

• Enable Two-Factor Authentication (2FA): Use authentication apps like Google Authenticator or Authy instead of SMS-based 2FA.

• Keep Software Updated: Regularly update your wallet, exchange apps, and operating system to protect against vulnerabilities.

• Beware of Phishing Scams: Be cautious of emails, messages, or websites asking for your private key, seed phrase, or passwords.

• Avoid Public Wi-Fi: Use a Virtual Private Network (VPN) if you need to access your accounts on public networks.

• Use Hardware Wallets: For long-term storage, use hardware wallets like Ledger or Trezor, which keep your private keys offline and secure.

• Backup Your Seed Phrase: Do not store your seed phrase digitally or share it with anyone.

• Verify Smart Contracts: Interact only with reputable smart contracts and decentralized applications (DApps).

• Use Reputable Exchanges: Trade on well-known and established exchanges with strong security practices.

• Be Skeptical of Promises of High Returns: Be wary of schemes that promise unusually high returns with little risk.

• Monitor Your Accounts Regularly: Keep an eye on your wallet and exchange accounts for any unauthorized transactions.

• Learn and Stay Informed: Educate yourself about common scams and security practices in the crypto space.