Crypto 101

#Glossary: ▪️Tokenomics: Cryptocurrencies are governed by a set of rules called “tokenomics.” The term, a portmanteau of token and economics, refers to the monetary policies baked into each token or coin. A cryptocurrency's tokenomics govern its supply, outlining how and when more tokens are added into circulation. @Crypto101_en

Use Cases ▪️Litecoin was forked from Bitcoin’s code to tackle issues of cost and scalability. These differences make Litecoin more favorable for merchants, since payments and transactions can be carried out quickly at a cheaper rate. ▪️Ethereum focuses on smart contracts, transfer of asset ownership and DApp production. Smart contracts are software programs that take action when specific predetermined criteria are met. This procedure makes sure that every Ethereum transaction is secure for the user. ▪️Additionally, asset exchanges like the transfer of property or money may be included in the contracts. Ethereum’s unique feature is that it allows programmers to directly interact with its underlying network, a capability that Bitcoin and Litecoin do not support. #LTC_ETH @Crypto101_en ⏺ PREVIOUS LESSONS

#Glossary: ▪️TOR: TOR is an abbreviation for ‘The Onion Router’. Onion routing is a method to send data anonymously over the Internet. The TOR Network consists of thousands of proxy servers on the Internet run by volunteers, which enables the routing. There are already cryptocurrencies that support ‘nodes’ on the TOR network. @Crypto101_en

Consensus Mechanisms ▪️Litecoin utilizes the Proof-of-Work (PoW) consensus, similar to Bitcoin, where miners compete to solve complex mathematical puzzles to validate transactions and add blocks to the blockchain. ▪️Ethereum also started with PoW but has transitioned to Proof-of-Stake (PoS) this year. PoS relies on validators who are chosen to create blocks based on the number of coins they "stake" as collateral, offering a more energy-efficient and scalable approach compared to PoW. #LTC_ETH @Crypto101_en ⏺ PREVIOUS LESSONS

#Glossary: ▪️Total Supply: This measure indicates the total number of tokens in existence. This is different from the ‘max supply’, in which future coins are included. The total supply is greater than or equal to the ‘circulating’ supply’. It can consist of tradable and non-tradable coins, such as reserved or not yet released coins for the team or investors. @Crypto101_en

Mining Rewards ▪️Litecoin began with a reward of 50 LTC per block mined. Following three halvings, with the most recent one taking place on August 2, 2023, current reward stands at 6.25 LTC per block. Rewards are halved in order to limit the quantity of each cryptocurrency released into the circulating supply, thus creating scarcity. Litecoin block rewards are halved every 840k blocks. ▪️Ethereum now utilizes a PoS consensus mechanism so there are no rewards for block mining. Instead, participants are rewarded by staking their Ethereum on the network to participate in block validation. Depending on the staking program in which users choose to participate, their rewards can fluctuate, anywhere from 2% to 20%. #LTC_ETH @Crypto101_en ⏺ PREVIOUS LESSONS

#Glossary: ▪️Transactions Per Second (TPS): This refers to the number of transactions that a network can process each second. For example, the TPS of Bitcoin is around 5 and that of Ethereum is around 10 at the moment. This means that a higher fee is needed to have a transaction processed quickly. New Blockchains can distinguish themselves by having a much higher TPS, but this often comes with more centralization of lower (chain) security. @Crypto101_en

Litecoin vs Ethereum: Introduction Before we jump into the details about the differences, let’s learn about the basics of Litecoin and Ethereum. ▪️Litecoin is a decentralized, open-source coin designed for P2P transactions. It was created by a former Google employee and launched in 2011. Often referred to as the "silver" to Bitcoin's "gold," Litecoin shares many similarities with Bitcoin but has faster block times and lower transaction fees. ▪️Ethereum, on the other hand, is a public blockchain that goes beyond simple transactions. Proposed by Vitalik Buterin in 2013 and launched in 2015, Ethereum features a distributed computing machine called the Ethereum Virtual Machine (EVM). It enables developers to build and deploy DApps using smart contracts. Ethereum's native currency, Ether (ETH), is used to facilitate transactions and incentivize network participants. #LTC_ETH @Crypto101_en ⏺ PREVIOUS LESSONS

#Glossary: ▪️Transaction ID: All transactions in the Blockchain, such as the amount, the address of the sender and recipient and the date of transfer, are provided with an identification, which is publicly accessible in the ledger of the Blockchain. This is the ‘Transaction ID’. @Crypto101_en

Litecoin vs Ethereum While Litecoin and Ethereum both use blockchain technolog and facilitate transactions between users, they have distinctive features that set them apart. Litecoin is a fork of Bitcoin, providing a more economical alternative to the original cryptocurrency and its blockchain. It leverages similar mechanisms to Bitcoin, allowing faster transaction coonfirmation times. Ethereum is designed as a decentralized platform that allows developers to build and deploy their own smart contracts and DApps, running independently of any central organization. #LTC_ETH @Crypto101_en ⏺ PREVIOUS LESSONS

#Glossary: ▪️The Stock-to-Flow model: This is a quantitative measure used to assess the scarcity of a particular asset, such as Bitcoin or gold. It calculates the ratio between the existing supply of the asset (stock) and the rate at which new units are produced or mined (flow). A higher Stock-to-Flow ratio indicates greater scarcity, suggesting potential implications for the asset's value and long-term prospects. @Crypto101_en

#Glossary ▪️Howey Test: The Howey test is a legal test used in the US to determine whether a transaction qualifies as an investment contract and, thus, is considered a security under federal law. The test gets its name from the 1946 Supreme Court case of SEC vs the WJ Howey Company. The Howey Test consists of four prongs, all of which must be satisfied for the SEC to classify a transaction as a security. The four conditions are: 1⃣ an investment of money, 2⃣ in a common enterprise, 3⃣ with the expectation of profit 4⃣ to be derived from the efforts of others. @Crypto101_en

#Glossary ▪️Howey Test: The Howey test is a legal test used in the US to determine whether a transaction qualifies as an investment contract and, thus, is considered a security under federal law. The test gets its name from the 1946 Supreme Court case of SEC vs the WJ Howey Company. The Howey Test consists of four prongs, all of which must be satisfied for the SEC to classify a transaction as a security. The four conditions are: 1⃣. an investment of money, 2⃣. in a common enterprise, 3⃣. with the expectation of profit 4⃣. to be derived from the efforts of others. @Crypto101_en

#Glossary: ▪️Open Interest: Open interest is the total number of outstanding derivative contracts for an asset, such as options or futures, that have not been settled. Open interest keeps track of every open position in a particular contract rather than tracking the total volume traded. Open interest can provide a more accurate picture of an asset's liquidity and interest, identifying whether money flows into the asset are increasing or decreasing. @Crypto101_en

#Glossary: ▪️Open Interest: Open interest is the total number of outstanding derivative contracts for an asset, such as options or futures, that have not been settled. Open interest keeps track of every open position in a particular contract rather than tracking the total volume traded. Open interest can provide a more accurate picture of an asset's liquidity and interest, identifying whether money flows into the asset are increasing or decreasing. @Crypto101_en

#Glossary: ▪️UXTO: UXTO is the abbreviation of ‘Unspent Transaction Output’. The total balance of Bitcoins on an address can be spread over multiple blocks in the blockchain. The unspent Bitcoins have a UXTO attribute. By searching the blockchain for the UXTO’s, which belong to a ‘wallet’ address, the total spendable balance can be determined. This is displayed by the wallet when it is fully synchronized. @Crypto101_en

▪️WEEKLY REVIEW▪️ This week you've learned about Crypto Mixers: ▪️ Introduction ▪️ Use Cases ▪️ Advantages and Disadvantages ▪️ Most Popular Crypto Mixers ▪️ Types of Crypto Mixers Our next topic will be covering tools and websites every crypto trader should be familiar with. #Crypto_Mixers @Crypto101_en

#Glossary: ▪️Wei: A ‘Wei’ is the smallest denomination of Ethereum. 1 Ethereum = 1,000,000,000,000,000,000 Wei (10^-18) @Crypto101_en

Types of Crypto Mixers There are several types of crypto mixers available, each with its own approach to enhancing privacy and anonymity in cryptocurrency transactions. ▪️ Centralized Mixers: These mixers are operated by a centralized entity or service. Users deposit their funds, and the mixer handles the mixing process. While convenient, they may pose trust and privacy risks as the operator has control over user data ▪️ Decentralized Mixers: These mixers operate on decentralized networks and protocols, such as CoinJoin. Users collaborate to mix their transactions, ensuring that no single entity controls the process. Decentralized mixers offer increased privacy and security ▪️ CoinSwap: This protocols allow users to directly exchange their coins with others in a trustless manner, making it difficult to trace the transaction flow ▪️ Stealth Addresses: These mixers generate unique, one-time addresses for each transaction, making it challenging to link addresses to the same user ▪️ Zero-Knowledge Proof (ZKP) Mixers: Utilizing cryptographic techniques like zero-knowledge proofs, ZKP mixers allow users to prove the validity of their transactions without revealing specific details, enhancing privacy #Crypto_Mixers @Crypto101_en ⏺ PREVIOUS LESSONS

#Glossary: ▪️Wholecoiner: A wholecoiner is someone who owns 1 full Bitcoin. The higher the price of Bitcoin gets, the harder it becomes to achieve this. Therefore, the number of ‘wholecoiners’ will also be limited. @Crypto101_en