Since then, ICOs have supported billion-dollar ventures alongside monumental flops, all on the main stage of crypto finance. They’ve helped raise money for everything from metaverse games to decentralized platforms like exchanges, while offering early contributors a stake in either future utility or governance.

If you’re curious about joining an ICO or launching your own, it’s crucial to understand how these token sales work, the risks they carry, and how they stack up against traditional fundraising. In this straightforward but detailed guide, we’ll take the mystery out of ICOs, look at previous ICO campaign events, and look at a checklist for evaluating opportunities on their own merits.

What Is an Initial Coin Offering (ICO)?

An initial coin offering, or ICO, is a method of crowdfunding a blockchain project. An ICO helps raise capital by selling tokens instead of issuing equity like a conventional startup. The dev team mints a set supply of crypto assets, typically from the utility or governance allotment, on a smart-contract platform such as Ethereum, BNB Chain, or Solana.

Early buyers can exchange established cryptocurrencies like ETH, BNB, and USDC for the new asset at a special new token price. These purchases fund development while acquiring an asset that may appreciate if the project ends up succeeding.

ICOs will usually happen before the project is fully built, so contributors can bet on future points of utility, like access to decentralized storage, discounted trading fees, governance votes, staking rewards, and more. This fundraising model has more or less become the standard since projects like Filecoin and Bancor raised millions in the blink of an eye.

Although regulatory scrutiny has since tightened, especially in the United States, where many tokens risk classification as unregistered securities, ICOs remain popular in jurisdictions that embrace innovation.

The key features of ICOs include increasing the total global reach of the project (since essentially anyone with internet access can participate), rapid settlement via existing smart contract networks, and funding transparency searchable on public blockchains.

That said, with minimal gatekeeping comes the increased risk of scams, overpromised roadmaps, and poorly audited code. Successful ICOs balance bold vision with verifiable progress, detailed tokenomics, and clear legal disclosures.

How Does an ICO Work?

In the simplest sense, an ICO follows a very simple sequence of events. First, the team publishes their white paper, deploys a smart-contract sale contract, and collects crypto in exchange for newly minted tokens.

Behind that quick process rundown, however, is a complex array of moving parts like legal vetting, ongoing marketing campaigns, community discussions and engagement, and large-scale liquidity planning. These are generally the components that will ultimately determine the fate of the project.

White Paper Release

The white paper is the beating heart of any ICO and serves multiple audiences at once: prospective investors, regulators, auditors, and future community members. An ideal document begins with an executive summary that explains the real-world problem and why blockchain is the optimal solution, written in language clear enough for non-technical readers. It then dives into a technical architecture section, laying out consensus mechanisms, data structures, and interoperability layers. Diagrams, sequence charts, and gas-usage benchmarks help developers verify feasibility.

Next comes tokenomics. Here, the dev team must specify total supply, initial circulating supply, vesting cliffs, inflation schedules, and burn mechanics. Transparent formulas show that the team has stress-tested incentives against edge cases like whale dominance or governance gridlock. Projects also outline fund allocation: what percentage of raised capital goes to R&D, marketing, audits, liquidity, or legal reserves, often accompanied by Gantt-style timelines and quarterly milestones.

A credible white paper includes a risk disclosure section, candidly addressing smart-contract exploits, regulatory shifts, and market volatility. Teams bolster trust by publishing code repositories and commissioning third-party security audits, linking hash-verified PDF reports directly in the document. Legal analysis is increasingly standard; reputable projects append memoranda explaining why the token is a utility token under Swiss FINMA or Singapore MAS guidelines, or how U.S. purchasers are geo-fenced to avoid securities violations.

Lastly, leading white papers will lay out a go-to-market strategy that details partnership pipelines, exchange listing plans, and community incentive programs. Clear KPIs like monthly active wallets or TVL targets help investors more easily track execution, post-ICO.

What it really comes down to is that a white paper isn’t just a marketing or publicity asset. A thorough white paper is a technical blueprint, financial prospectus, and legal affidavit rolled into one, providing the transparency necessary for informed participation.

ICOs vs. Traditional Fundraising Methods

Traditional fundraising routes, like angel rounds, venture capital, and IPOs, all require extensive due diligence, board approvals, and often months of negotiation. They also impose geographic and accreditation barriers, restricting access to institutional money and accredited investors.

ICOs flip that script by automating issuance and settlement through smart contracts, enabling projects to raise millions in days from a global contributor base. Fees are lower, and founders retain more equity because they issue tokens rather than shares.

On the flip side, ICO investors receive no ownership stake and limited legal protections, so if the project fails or founders disappear, recourse is minimal. Regulatory certainty is stronger for IPOs, where underwriters and the SEC enforce disclosure standards, while ICOs operate in a patchwork of global jurisdictions, increasing legal risk for both issuers and participants.

Who Can Launch an ICO?

Theoretically, any individual, startup, or DAO with a compelling or interesting enough idea and the technical expertise for execution can launch an ICO. Practically, the team needs smart-contract developers to write the token contract, legal counsel to navigate securities laws, marketing specialists to cultivate the community, and auditors to vet code.

This means paying attention to jurisdiction, since it matters the most for getting a token off the ground with an ICO. Switzerland, Singapore, and the Cayman Islands offer clearer token guidelines, whereas the United States and China impose stricter rules.

An ICO launch also requires a solid treasury capacity for treasury management. There needs to be multisig wallet setup, creation of vesting contracts, and deciding on liquidity strategies for post-sale trading.

Pros and Cons of ICOs

ICOs help to democratize a project’s fundraising by allowing entrepreneurs to tap a global pool of crypto-savvy backers. However, that same openness can end up exposing participants to higher levels of risk. Being clear about expectations on both sides of the fence can help backers decide whether to launch an ICO, and can help investors size their investment and portfolio positions appropriately.

Pros of ICOs

• Global, frictionless capital: Anyone with an internet connection and a crypto wallet can join, expanding the funding base far beyond Silicon Valley or Wall Street.
• Speed to market: Smart-contract sales close in days or weeks, giving teams immediate resources to build without lengthy VC negotiations.
• Early community engagement: Token holders become evangelists, testing products, providing liquidity, and driving network effects from day one.
• Founder equity preservation: Instead of selling company shares, founders issue utility tokens, retaining corporate ownership while still raising substantial capital.
• Programmable incentives: On-chain vesting, staking rewards, and burn mechanics can align long-term user behavior automatically, reducing reliance on legal contracts.

Cons of ICOs

• Regulatory uncertainty: In major markets such as the United States, tokens risk classification as unregistered securities, exposing issuers and buyers to enforcement actions.
• High scam frequency: Minimal gatekeeping attracts fraudulent teams that copy code, spoof audits, and disappear post-raise, leaving investors with worthless tokens.
• Information asymmetry: White papers are not standardized; missing financials and unaudited claims make due diligence difficult for retail participants.
• Extreme volatility: Tokens can list at 10× presale price and crash 90 % within days, driven by thin liquidity and short-term speculation.
• Reputational risk: Failed milestones or hacks quickly erode trust, depressing secondary-market value and hindering future partnerships or regulatory approvals.

Examples of Initial Coin Offerings

1. Ether (2014)

Source: Coincodex

Raised about $18 million in BTC by selling Ether at roughly $0.31. The ICO funded the launch of a programmable smart-contract platform that now underpins most DeFi and NFT activity. Early participants saw exponential returns when ETH later traded above $4,000.

2. Filecoin (2017)

Source: Coincodex

Secured $257 million via SAFT (Simple Agreement for Future Tokens), promising decentralized storage. Despite launch delays, Filecoin shipped mainnet in 2020, and FIL reached a $10 billion market cap peak.

3. Binance Coin (2017)

Source: Coincodex

Binance raised $15 million, using BNB to offer trading-fee discounts and later to pay gas on BNB Smart Chain. BNB became a blue-chip utility token, climbing from $0.11 in the sale to over $600 during the 2021 bull run.

4. Tezos (2017)

Source: Coincodex

Tezos initially collected $232 million, but internal governance disputes delayed the mainnet launch for roughly a year. The result was Tezos DAO ultimately deciding to implement on-chain self-amendment, allowing XTZ to remain an active staking asset. Tezos also acts as an illustration of how larger governance challenges can be solved with transparency and community.

5. EOS (2018)

Source: Coincodex

EOS ran a rolling ICO that raised more than $4 billion. While EOS itself delivered high throughput, long-term adoption failed largely due to criticism over centralized governance and SEC fines.

How to Launch an ICO: Step-by-Step

If you’ve been itching to start a new cryptocurrency project, launching a public or private ICO is going to require a few steps. Let’s take a look at what you’ll need to think about and accomplish in order to launch an ICO.

1. First is the concept validation. You need to start with a clear value proposition, where you can identify a genuine market gap and determine why a token is foundational to your solution. Do a competitor analysis, build out a rough prototype, and get feedback from experts in the space to be sure there’s enough demand for the solution before committing to legal and marketing spend.
2. Now comes the jurisdictional decision and legal structuring. Engage experienced counsel to map regulatory risk. Choose a crypto-friendly headquarters where you can incorporate an entity to handle the token issuance. Draft your legal opinions surrounding token utility, KYC/AML policies, and any investor accreditation requirements.
3. Here’s where you really get into the guts of how things are going to work. For your tokenomics, you need to design supply, distribution, and incentive mechanics that align long-term user growth with your overall treasury sustainability. Write and intensely test ERC-20 or other chain-specific contracts, and use them to integrate time-locked vesting, multisig admin controls, and upgradeability safeguards. Be sure you commission at least one independent audit and publish those findings to cultivate confidence with investors.
4. With all the details mapped out, it’s time to create your white paper and official website. Here’s where you’ll have your roadmaps, team bios, audit links, and legal disclosures all available to the public, and where you’ll declare your official social channels. You should create a content calendar so you can maintain transparent communication.
5. Next comes your private and pre-sale rounds. Here, you’re conducting a sale limited to strategic partners, VCs, angel investors, etc., usually with longer vesting to keep skin in the game. Well-structured pre-sales raise crucial capital for marketing, while also showing the demand potential.
6. Public sale mechanics are going to matter, so think about whether you’ll be selling with fixed-price, Dutch auction, or dynamic cap. Integrate KYC gates if required, set contribution caps to mitigate whale accumulation, and configure smart-contract limits to pause the sale when hard-cap or time limits are met. Provide real-time dashboards for investors to track funds raised during the ICO.
7. Always set aside a portion of funds and tokens for initial DEX liquidity pools or negotiate centralized-exchange listings. Announce listing timelines in advance to prevent misinformation and coordinate with market-making partners to stabilize early trading.

Key Differences Between ICO vs IPO

• Regulation: IPOs undergo a stringent review by bodies like the U.S. Securities and Exchange Commission (SEC), requiring audited financial statements and a detailed prospectus. ICOs survive in a patchwork of global jurisdictions and often rely on legal opinions rather than formal approval, leaving participants with fewer protections.
• Availability: ICOs are generally open worldwide to anyone with internet and crypto funds, while IPO shares are usually offered to accredited or institutional investors during book-building, with retail access only after listing.
• Time & Cost: IPOs can take 6–18 months and millions in underwriting, legal, and road-show expenses. On the other hand, ICOs can fully launch within weeks with lower costs.
• Transparency: ICO teams provide white papers and audits, but rarely face standardized accounting rules, making diligence variable and rather subjective. IPO firms, however, publish extensive audited financials, risk factors, and executive compensation.

FAQs

What is the meaning of ICO?

ICO stands for Initial Coin Offering. Initial coin offerings are crowdfunding campaigns where a blockchain project issues newly minted tokens to raise capital before its product is fully built. Contributors pay in established cryptocurrencies, and in return, they are given governance or utility tokens tied to the project’s future ecosystem.

How Can I invest in an ICO?

First, vet the project’s white paper, audits, and team credentials. Confirm legal eligibility, since many ICOs geo-block U.S. residents. Create a compatible wallet, complete any KYC, and fund it with the accepted currency. On the sale day, connect your wallet to the project’s smart-contract interface or launchpad, specify the contribution amount, and approve the transaction. Always use a fresh browser tab to avoid phishing sites.

Why is ICO not allowed in the US?

The U.S. Securities and Exchange Commission often classifies token sales as unregistered securities offerings under the Howey Test. Issuers would need to register or qualify for an exemption, which is a process that tends to be time-consuming and cost-prohibitive. To limit legal exposure, ICOs will typically exclude US customers and restrict American IPs from accessing the system.

What is an ICO crime?

ICO-related crimes include market manipulation, insider dumping of unlocked tokens, selling tokens that constitute unregistered securities, and fraud. Fraud covers a lot, including raising funds with no intention of building the promised product. Penalties range from investor lawsuits to SEC enforcement actions, criminal wire-fraud charges, asset freezes, and prison sentences for founders.

The post Initial Coin Offering (ICO): What It Is, How It Works, and Examples appeared first on NFT Evening.

We’re going to dig into exactly what a halving event is, when Bitcoin halving occurred in the past, and even when the next upcoming Bitcoin halving may happen. Along the way, we’ll look at how halving events impact the Bitcoin market price and behavior, and how that all helps shape ongoing trends. Buckle up, there’s a lot to cover.

What Is Bitcoin Halving?

Bitcoin halving is a function hardcoded into the Bitcoin network that occurs every 210,000 blocks, or roughly every four years. The difficulty mechanism is created to scale difficulty in response to hash rate, with the goal being a steady time between blocks mined. This leads to a controlled, deflationary supply, capped at 21 million Bitcoins.

Source: Coinwarz.com

Halving events are central to the design and ethos of Bitcoin, and they help to create scarcity. As Bitcoin becomes more popular and widely adopted and hash rates go up, block rewards go down, fewer Bitcoins are produced, and scarcity is created in the crypto market.

The role of miners in the Bitcoin network

Miners are the backbone and beating heart of the Bitcoin network. Not only do they work to validate transactions, earn transaction fees, and keep the network secure, but they also actively crunch the numbers needed to solve the equations that create the blocks during the mining process.

If a single miner finds the block, they get the full reward of new coins deposited into their wallet, however, most mining operations are pools that split the reward based on the last N shares of the solution that the various miners returned.

When rewards are reduced, it can lead to fewer miners, but it can also spark innovation in mining technology in the long run.

The significance of block rewards in the Bitcoin ecosystem

Block rewards are the main incentive for devoting computing power to mining. The algorithm used by Bitcoin to secure the network takes immense computational power, particularly with the constant upward trend of hash rate and the wider adoption of Bitcoin.

Source: Blockchain.com

Is Bitcoin Halving Good?

Inflation

Bitcoin halving plays a key role in controlling inflation within the Bitcoin ecosystem. By reducing the issuance of new bitcoins, halving limits supply expansion and helps preserve value over time. This built-in scarcity mechanism mimics the effects of a deflationary currency, which can bolster investor confidence.

Demand

As the new Bitcoin supply shrinks after a halving event, demand can rise significantly, driving prices higher. Increased scarcity, combined with growing global adoption and institutional interest, tends to create a positive feedback loop. Market participants often anticipate higher future values, which further amplifies demand.

Investing

From an investment perspective, Bitcoin halving is seen as a bullish signal. Historical data shows that halving events have preceded significant price rallies. Investors view the reduced supply as a catalyst for long-term appreciation, prompting many to buy and hold.

That said, short-term volatility is still quite common, with the price of Bitcoin moving several thousand dollars in either direction during the average day.

Mining

Miners face both opportunities and challenges during halving events. While reduced rewards can squeeze profit margins, improvements in mining efficiency and technological advancements can offset these effects.

Halving pressures miners to innovate, reduce costs, and upgrade equipment. In the long run, a tighter supply of new bitcoins can lead to a more competitive, resilient mining ecosystem that drives overall network security.

Consumers

Consumers reap perhaps the biggest benefits from Bitcoin halving through increased stability in the cycle following the event. Even though volatility spikes after a halving, it tends to be short-lived.

Previous Bitcoin Halving Events

First halving: November 28, 2012

• Block height: 210,000
• Block reward reduction: 50 BTC to 25 BTC
• Market reaction: Sparked growing interest, setting the stage for Bitcoin’s mainstream visibility

Second halving: July 9, 2016

• Block height: 420,000
• Block reward reduction: 25 BTC to 12.5 BTC
• Market reaction: Price appreciated steadily over the subsequent months, reinforcing the bullish narrative

Third halving: May 11, 2020

• Block height: 630,000
• Block reward reduction: 12.5 BTC to 6.25 BTC
• Market reaction: Occurred against a backdrop of global economic uncertainty, but Bitcoin’s price rose significantly in the following year.

Fourth halving: April 20, 2024

• Block height: 840,000
• Block reward reduction: 6.25 BTC to 3.125 BTC
• Market reaction: Sparked renewed discussions about Bitcoin’s scarcity and future price potential

When Is the Next Bitcoin Halving?

Fifth halving and beyond

• Projected date: March 28, 2028
• Block height: 1,050,000
• Block reward reduction: 3.125 BTC to 1.5625 BTC
• Expected outcomes: Continued deflationary pressure on Bitcoin’s supply, potential upward price trends if demand holds
• Longer-term perspective: Each subsequent halving pushes Bitcoin closer to its maximum supply of 21 million coins, fueling debates on mining viability and network security

In total, there will be 33 halving events in the Bitcoin network’s lifecycle. The 33rd halving event will technically not be a “halving” event in the truest sense since the 32nd reduced the block reward to a single satoshi. Since a satoshi is the smallest possible unit of Bitcoin, the Bitcoin mining reward will become zero.

Impact of the Bitcoin Halving On the Cryptocurrency Ecosystem

Halving events influence much more than Bitcoin’s supply schedule. They can shift market psychology, reshape mining profitability, and even spark new waves of retail and institutional interest.

Price trends around historical halving events

Historically, Bitcoin halving dates have always preceded extended bullish cycles. Though sudden surges in the price of Bitcoin are not uncommon, they have become less frequent with Bitcoin’s price approaching $100k again.

Supply and demand dynamics

With each halving, the flow of newly minted bitcoins is reduced, reinforcing the deflationary nature of Bitcoin. If demand remains steady or rises, the restricted supply can lead to higher valuations. This phenomenon helps Bitcoin stand out from fiat currencies, which often face inflationary pressures and lose significant value over time.

Effects on Bitcoin miners and profitability

Miners rely on block rewards for revenue, so halving cuts can strain operations. To remain profitable, they may upgrade hardware or consolidate mining pools. This highly competitive environment fosters greater efficiency and has prompted a massive push toward cheaper, greener energy sources.

Conclusion

Bitcoin halvings are integral to the core design of the network and the deflationary nature of the coin itself. While the immediate price impact can vary wildly, all previous halvings led to subsequent bullish cycles. Miners will continue to adapt by creating new mining equipment that increases their efficiency, and investors will continue to debate whether or not it’s time to enter or exit the market.

One thing is for sure, though. With the fourth halving now behind us and the fifth on the horizon, each one refines Bitcoin’s evolving role as the leading digital store of value.

FAQs

What happens when Bitcoin is halving?

The block reward is cut in half, making it less profitable for miners and reducing the rate at which new Bitcoins enter the market.

Should I buy Bitcoin before or after halving?

While this isn’t investment advice, historical data demonstrates significant price hikes after halving events, so if that holds true, buying before the next Bitcoin halving would be smart.

Is Bitcoin halving good for the price?

In the past, halving events have all preceded substantial bull runs, though they also ramp up volatility.

Will Bitcoin go up or down after halving?

Nothing is guaranteed, though most people agree that, given historical precedent, the price of Bitcoin will rise after a halving event.

The post Bitcoin Halving: What It Is and Why It’s Important for Investors? appeared first on NFT Evening.

Understanding exactly how spot trading works and why it’s an important strategy is critical to making better, more informed investment decisions. By learning how to focus on market volatility in real time, spot trading can help fulfill the typical traders’ aim to buy low and sell high without worrying about dealing with lengthy settlement times or potential margin calls.

What Is Spot Trading In Crypto?

In crypto, spot trading is a method of trading digital assets where orders are executed and filled immediately at the current market price. This means you are granted immediate delivery and ownership. It’s a very direct approach to asset ownership that works for traders who want straightforward exposure to price movements without the additional complexity of derivatives or margin trading.

Source: Pixabay.com

How Does Spot Trading Work?

Spot trading depends on real-time transactions, so trades happen more or less instantly at prevailing market prices. When you submit an order, you are buying or selling coins for the most immediate settlement possible.

Spot trading is generally done with either market orders or limit orders. Market orders will buy or sell specific quantities of coins at current market prices, while limit orders set a price and only execute at that price or better.

What Is a Spot Market?

A spot market is a platform where financial instruments related to crypto are bought and sold at their current prices for immediate delivery. On these spot exchanges, market participants have direct control over their transactions, locking in trades based on current supply and demand conditions. This setup fosters a clear price discovery mechanism, allowing traders to see real-time bids and offers.

Spot Trading in Other Markets

Spot trading is popular with crypto, but that’s not the only space you’ll find it. You’ll find spot trading in forex, precious metals, commodities like steel and oil, and more.

While each spot market may have unique trading hours, liquidity levels, or regulatory frameworks, the core principle remains the same: a clear, real-time transaction occurs when you buy or sell. This universality makes spot trading accessible and straightforward across multiple asset classes.

Best Spot Trading Strategies

Buy and Hold

This long-term strategy involves acquiring crypto at a lower price and holding it for an extended period. It’s particularly popular with investors who believe in the technology’s long-term promise.

Dollar-Cost Averaging (DCA)

Rather than making a single lump-sum purchase, DCA spreads out investments over regular intervals to mitigate the effects of short-term price fluctuations.

Trend Following

Traders analyze market patterns using indicators like moving averages or MACD. When a clear upward or downward trend emerges, they align trades to ride the momentum until signs of a reversal appear.

Spot Trading Vs. Futures Trading Vs. Margin Trading

Advantages of Spot Trading

• Immediate Ownership: You buy crypto assets outright, avoiding the complexities of leveraged positions or contract expirations. This allows you to store coins in your wallet, reducing counterparty risk.
• Lower Complexity: Spot markets are straightforward compared to derivatives trading, making them a popular choice for new entrants who want to focus on direct price movements.
• No Margin Calls: Because you only invest the capital you have, you don’t risk liquidation or margin-related losses associated with leveraged trades.
• Transparent Pricing: Transactions occur at current market prices, offering clarity and reducing guesswork about future settlements or hidden fees.
• Ideal for Long-Term Holding: Many spot traders adopt a buy-and-hold strategy, especially for assets they believe will appreciate over time.

Disadvantages of Spot Trading

• Tied-Up Capital: You must pay the full amount upfront, which limits buying power and potential returns compared to leveraged trading.
• Slower Growth: Gains depend entirely on price appreciation; you don’t have the advantage of amplified returns that margin or futures might provide.
• Volatility Risks: Swift price swings can quickly erode principal, especially for smaller altcoins with low liquidity.
• Limited Hedging Options: Without derivatives, you can’t short assets as easily or protect holdings from sudden market downturns.

How To Start Spot Trading In Crypto?

1. The first step to spot-trading crypto is to choose an exchange that supports the crypto you want to buy or sell.
2. You’ll need to create an account on your platform of choice and complete any KYC requirements.
3. Once you’ve been verified, it’s time to fund your account. Transfer fiat currency using any of the methods supported by the exchange.
4. Place a market order to buy or sell crypto at the current market price or create a limit order to specify a price at which to buy or sell a quantity of assets.
5. After your buy or sell order has been placed and filled, you should consider moving your assets to a hardware or software wallet you have full private key control of.

Alternatives to Spot Trading In Crypto

If spot trading doesn’t sound right for you and you’d like a few alternatives, there are plenty, as long as you’re able to cope with the added complexity and risk. The most popular alternatives are margin trading, options trading, and futures trading.

Futures trading strategies involve entering into a contract to buy or sell assets on a specific date in the future. This lets you hedge against current positions or speculate on price movements over time, frequently with leverage. The risk here is that market fluctuations could force liquidation if trades move against you.

Margin trading is a general strategy that lets you borrow funds to open a leveraged position, potentially multiplying gains as well as losses. Traders on margin trading platforms must maintain a specific balance to avoid liquidation, which makes risk management a core component.

Options trading is where you buy the right, but not the obligation, to buy or sell a specified asset at a specified price on a predetermined date. This is often used for hedging strategies or to profit from predicted market movements without actually holding the asset. Successful options trading demands an understanding of premiums, strike prices, and a complex set of metrics known as “the Greeks”.

Conclusion

Crypto spot trading is a cornerstone element of the broader crypto market, helping to provide a clear, uncluttered path to digital asset ownership. With a strict focus on immediate transactions at current market prices, you can more easily avoid the complexities native to contract-based trading strategies.

While spot trading doesn’t have the leverage options of futures or margin markets, it also comes with fewer inherent risks, particularly concerning liquidation. Now that you understand how spot trading works with crypto, you can combine this new knowledge with personal risk management to make more effective investment decisions.

FAQs

What is an example of spot trading?

An example of crypto spot trading is buying Bitcoin with a market order through any common platform or exchange. The order is filled at the time it is placed at the currently available price.

Can you make money by spot trading?

Yes. You can profit from buying digital assets and selling them for a higher price when market values increase, but there will always be risks.

Is crypto spot trading safe?

It’s considerably safer than leveraged trading strategies, but substantial market risks are still involved. Volatility is one major concern since substantial crypto price fluctuations are common.

Which crypto exchange is best for spot trading?

The best crypto exchanges for spot trading are platforms like Coinbase, Kraken, Binance, and more.

Is spot trading good for beginners?

Spot trading is much easier to understand than futures trading and less risky than margin trading, so it’s a great starting point for crypto beginners.

The post What Is Spot Trading in Crypto and How Does It Work? appeared first on NFT Evening.

This article explores the key strategies for navigating a bull market, including understanding market cycles, leveraging technical indicators, and managing risk effectively. Whether you’re a seasoned trader or just starting out, learning these techniques can help you maximize gains and make informed decisions in a rapidly evolving crypto market.

Keep in mind that none of this information is investment advice. We’re merely looking at popular investment strategy types to consider when crypto bull markets happen.

What is a Bull Market?

A bull market, or bull run, in the crypto world refers to a prolonged period of rising prices and high investor confidence. During these phases, digital assets such as Bitcoin, Ethereum, and various altcoins experience significant gains, often driven by increased adoption, positive news, and robust trading volumes.

Bull markets tend to be fueled by optimism, where investors expect continual upward movement, leading to a self-reinforcing cycle. This period is marked by a surge in buying activity, which drives prices higher and attracts more participants, creating a positive feedback loop.

With that in mind, bull markets are always finite and often see eventual corrections or reversals as market dynamics change.

Factors Influencing Crypto Bull Runs

• Investor confidence, optimism, and hype drive rapid buying.
• Tech innovations like breakthroughs in blockchain tech and DeFi spur confidence.
• Favorable news on industry regulations typically boosts investor confidence.
• Macro-scale external factors like low interest rates and generally higher economic growth typically support higher valuations.
• Media coverage can sway public opinion substantially, with positive articles and social content amplifying momentum.

How do crypto bull markets start and end? 

Crypto bull markets typically begin when positive market sentiment is sparked by breakthroughs, strong adoption, or favorable regulatory news. They often end when investor exuberance wanes, external economic pressures mount, or technical indicators signal overbought conditions, leading to market corrections.

How long do crypto bull runs last? 

The duration of one crypto bull market to another can differ wildly. Some are over in months, some last for years, and some are over in just weeks. Each one will depend on variables like investor behavior, market dynamics, and countless external economic factors.

Top Narrative to Watch in Bull Market

One of the most compelling narratives in any crypto bull market is the rise of blockchain projects that disrupt traditional finance and foster decentralized innovation.

In this cycle, key trends include the growth of DeFi platforms, increased institutional participation, and the integration of AI and machine learning for improved trading strategies. Investors are increasingly drawn to projects that blend cutting-edge technology with robust risk management, as these ventures offer both growth potential and stability.

What is a Bear Market?

A bear market in the crypto space refers to a prolonged period where prices steadily decline, leading to a widespread sense of pessimism among investors. During these phases, market sentiment shifts dramatically, and trading volumes often decrease as confidence wanes. Investors begin to liquidate their positions, fueling further downward pressure on prices.

Bear markets can be triggered by a range of factors, including adverse regulatory news, macroeconomic downturns, or overextended bull runs that lead to profit-taking and market corrections. In a bear market, the overall value of crypto assets drops significantly, and volatility tends to increase as panic selling takes hold.

While these periods are challenging, they can also present opportunities for long-term investors to acquire assets at lower prices. Understanding the signs and underlying causes of bear markets can help traders and investors navigate the downturn and position themselves for recovery when market sentiment eventually shifts.

Reasons Why Crypto Bull Markets Turn into Bear Markets

• Profit-Taking: Investors often sell assets to lock in gains, reducing buying pressure.
• Market Saturation: Excessive optimism leads to overvaluation, triggering corrections.
• Regulatory Changes: Negative or unexpected regulatory news can undermine investor confidence.
• Macroeconomic Shifts: Economic downturns or rising interest rates may divert capital from crypto markets.
• Technological or Security Issues: Major hacks or system failures can erode trust in digital assets.
• Liquidity Shortages: Reduced liquidity during market corrections can intensify price declines, hastening the conversion of bull to bear markets.

Bull Market vs Bear Market: Key Differences

Crypto Bull Market Strategies 

1. Using technical indicators to spot a bull run

Traders rely on technical indicators such as moving averages, RSI, and MACD to identify bullish trends. By analyzing these metrics, investors can detect momentum shifts, assess overbought or oversold conditions, and time their entry points for maximum profit potential during a bull run.

2. Take profits regularly with sell limit orders

Implementing sell limit orders at predetermined price levels enables investors to secure gains as prices rise. This strategy helps avoid the pitfalls of emotional decision-making and market volatility, ensuring that profits are systematically locked in, even if a sudden market reversal occurs during a bull run.

3. HODL but earn interest

Long-term holders can continue to HODL their assets while earning interest through staking or yield farming. This approach combines the benefits of holding crypto during a bull market with additional passive income streams, allowing investors to maximize returns even when market conditions fluctuate.

4. Reduce gains with HIFO accounting

Using the HIFO method, or highest-in-first-out, can help investors reduce taxable gains during a bull market. By selling the most expensive assets first, traders minimize capital gains taxes, preserving more profit and enhancing overall investment returns when market prices eventually decline.

5. Take profits in stablecoins

Converting a portion of your crypto portfolio into stablecoins during a bull run can secure gains and protect against volatility. Stablecoins provide a predictable value, allowing investors to re-enter the market when prices stabilize while maintaining liquidity and minimizing exposure to sudden downturns.

6. Diversify holdings

Diversification is crucial during bull markets. Spreading investments across various assets, including major cryptocurrencies, DeFi tokens, and stablecoins, helps reduce risk and smooth out volatility. A diversified portfolio can better withstand market corrections and capture gains from multiple emerging trends simultaneously.

7. Have an exit strategy

Develop a clear exit strategy that defines profit-taking thresholds and stop-loss levels. Knowing when to exit ensures that you lock in gains and minimize losses. This disciplined approach prevents emotional decisions and enables you to adapt swiftly if market conditions shift, preserving capital for future opportunities.

History of bull and bear markets

2013 Bull Run

Source: TradingView

In 2013, Bitcoin’s price surged from under $100 to over $1,000 in a short period, igniting widespread interest in cryptocurrencies. This early bull run was driven by increasing media attention, technological breakthroughs, and growing global awareness, setting the stage for future rapid growth in the crypto market.

2017 Bull Run

Source: TradingView

The 2017 bull run saw explosive growth across the crypto market, with Bitcoin reaching nearly $20,000 and numerous altcoins skyrocketing. This period was marked by a surge in ICO activity, intense investor enthusiasm, and significant adoption of blockchain technology, though it later led to heightened market volatility.

2020-2021 Bull Run

Source: TradingView

From 2020 to 2021, the crypto market experienced a prolonged bull run fueled by institutional investments, mainstream adoption, and innovative DeFi projects. Bitcoin and major altcoins hit new all-time highs, while investor confidence soared amid supportive economic conditions and rapid technological advancements in the blockchain space.

2021-2022 Bear Market

Source: TradingView

Following the highs in 2021, the crypto market entered a bear phase in 2021–2022. Heightened regulatory scrutiny, profit-taking, and macroeconomic uncertainty led to a sharp decline in prices. This period of correction highlighted the market’s volatility and the inherent risks of rapid bull run cycles.

Conclusion 

The crypto bull market offers exciting opportunities, but it is also a dynamic cycle of peaks and corrections. Through a basic understanding of the fundamentals of bull and bear markets and as many of the factors that impact crypto as possible, you can better navigate market swings and maximize gains. As the market evolves, ongoing research and disciplined strategies will be the keys to thriving in this volatile yet potentially rewarding landscape.

FAQs

Why is it called a bull and bear market?

Bull markets are named for the upward thrust of a bull’s horns, symbolizing rising prices, while bear markets reference a bear’s downward swipe, indicating declining prices.

Is a crypto bull run coming? When is the next crypto bull run?

Predicting a bull run is challenging; market trends, investor sentiment, and external factors all influence timing. Analysts use technical indicators, but exact timing is impossible to predict.

Is crypto in a bull market now?

Market conditions constantly change. While recent trends might indicate bullish sentiment, always refer to up-to-date market analysis and indicators before making investment decisions.

What to do during a crypto bull run?

During a bull run, consider taking profits regularly, diversifying holdings, and using technical indicators to time your trades. Maintain an exit strategy and invest in assets with strong fundamentals to safeguard gains.

The post What is a Bull or Bear Market in Crypto? The Beginner’s Guide appeared first on NFT Evening.

Because of the incredible amount of speculation and potential volatility involved in cryptocurrencies, getting a clear understanding of a crypto coin’s market capitalization can help gauge risk as well as identify growth potential. No matter what coins you’re looking into, market cap can give you priceless insight into their current standing and future prospects.

What is Market Cap in Crypto?

In crypto, a coin’s market cap is the total value of capital invested in that asset, effectively measuring the overall market share and perceived worth in the wider crypto ecosystem. Looking at the market capitalisation can help you quickly compare one coin to another.

Generally speaking, higher market caps mean a more established project with a more stable track record, while lower caps may represent younger, riskier ventures with potentially higher upside.

The crypto market is typically split into categories based on total market cap, including large-cap coins like Bitcoin and Ethereum, mid-cap cryptocurrencies like Tether, BNB, and CRO, and smaller market caps still in their early growth and adoption stages.

How is Market Cap Calculated?

It’s easy to calculate crypto market cap for any particular asset. You take the number of coins or tokens in the currently circulating supply and multiply that by the current price. So, if there are one billion tokens, and the current value of each token is $0.20, that crypto would have a market capitalisation of $200 million.

Source: CoinMarketCap.com

Why is the Crypto Market Cap Important?

The crypto market cap plays a significant role in helping investors gauge a project’s scale, maturity, and overall stability. It offers a straightforward reference for comparing different cryptocurrencies, providing insight into relative size and perceived potential.

Generally speaking, the market cap also influences investor sentiment and liquidity. If a coin lacks a sizable market cap, day-to-day price movements can be more volatile, making it difficult to buy or sell large amounts without affecting the market. Conversely, coins with larger market caps typically exhibit more stable pricing due to their robust trading volumes.

What is a liquid market?

A liquid market is one where buyers and sellers exchange assets without delay or price impact. In crypto, liquidity is typically tied to the trading volume. Higher liquidity leads to buying and selling at more predictable pricing, while lower liquidity can mean higher slippage and more frequent market distortions.

Having a liquid market is critical for all major cryptocurrencies. It cultivates confidence, helps stabilize the price, and staves off market manipulation.

Circulating supply vs fully diluted supply

Circulating supply is the term for the number of coins currently available to the public. This statistic includes all coins held in wallets but not coins that have yet to be mined or minted.

However, the fully diluted supply includes all tokens that could enter future circulation, such as those locked in smart contracts, reserved for development, or vesting schedules for team members.

For anyone getting involved in the crypto space, this is crucial information, particularly with coins and tokens that don’t have caps and could be minted or mined without limit.

Difference Between Small, Mid, & Large-Cap Cryptocurrencies

Since we categorize cryptos by their market cap size, it’s helpful to understand the relative risk and growth prospects. While the specific thresholds might vary from one source to another, the categories usually break down into small-, mid-, and large-cap cryptos.

Small-cap cryptocurrencies

With small-cap cryptocurrencies, you’re probably looking at market caps of a few hundred million or less. They will usually have higher volatility due to limited liquidity. While they might hold the potential for rapid, substantial gains, they also come with significant risk.

Mid-cap cryptocurrencies

Mid-cap cryptos hold a middle ground that combines maturity with the potential to still grow. They’ll usually have a market cap of between a few hundred million and a few billion dollars.

Large-cap cryptocurrencies

Large-cap cryptocurrencies, such as Bitcoin or Ethereum, have well over one hundred billion dollars. These cryptos have seen widespread adoption, strong liquidity, and powerful infrastructure created to support them.

Why Are Large-Cap Cryptocurrencies Considered to Have Lower Risk Profiles?

Generally speaking, large market caps have more established communities, extensive ecosystem support, and unshakable liquidity. While they aren’t immune to big market movements, they are relatively well-insulated from massive corrections.

Market Cap vs. Volume vs. Cash Inflow

Market cap is the overall measure of the value of a particular cryptocurrency. Trading volume tracks the number of coins traded over a specified period, indicating the ongoing liquidity and general investor interest. On the other hand, cash inflow concerns the fiat currency entering the asset.

Even though all three of these metrics give valuable insights, they serve different purposes. High market caps don’t necessarily mean high trading volume or a strong cash inflow.

Top 10 Cryptocurrencies by Market Cap

1. Bitcoin (BTC) – $1.72T
2. Ethereum (ETH) – $243.3B
3. Tether (USDT) – $144B
4. XRP (XRP) – $140B
5. BNB (BNB) – $88.8B
6. Solana (SOL) – $71.5B
7. USDC (USDC) – $60.1B
8. Dogecoin (DOGE) – $29.2B
9. Cardano (ADA) – $27.1B
10. Tron (TRX) – $21.7B

Conclusion

Market cap is a cornerstone metric that helps you gauge the relative size, stability, and growth potential of different cryptocurrencies. It can be a powerful tool for assessing new opportunities, but thorough research and disciplined risk management will always be critical for applying the insights it provides to your investment strategy.

FAQs

What is a good market cap in crypto?

“Good” is a relatively subjective term and will largely depend on your personal investment goals and risk tolerance. Large-cap cryptocurrencies are more stable, but smaller market caps have more growth potential.

What does market cap tell you?

Market cap reveals a cryptocurrency’s total value based on its current price and circulating supply, serving as a quick way to compare one coin to another.

Is a higher market cap better?

Not always. While higher caps usually mean greater stability and adoption, smaller caps might yield bigger returns if the project succeeds. It really comes down to individual risk preferences.

What crypto under $1 will explode?

While predicting the next coin to explode is mostly speculation, there are some solid cryptocurrencies to look at for surges in growth. Look at low-cost, high-utility coins and tokens like Cronos (CRO), Stellar (XLM), VeChain (VET), and Tron (TRX).

What is the current crypto market cap?

According to data from CoinMarketCap, the crypto market cap as of March 26, 2025, is $2.83T.

The post What is Market Cap in Crypto & Why It Matters for Investors? appeared first on NFT Evening.

As a programmer, writer, and thought leader, Buterin’s contributions have propelled the crypto space forward, inspiring developers to build software for a decentralized future. This article explores his life, accomplishments, and the lasting impact he has on the crypto industry.

Who is Vitalik Buterin?

Vitalik Buterin is a Russian-Canadian programmer, writer, and entrepreneur who co-founded Ethereum in 2013. Renowned for his contributions to blockchain technology, Buterin championed Ethereum’s smart contract functionality, propelling the network beyond simple peer-to-peer transactions. His philosophical foundations revolve around decentralization, community governance, and the belief that blockchains can transform various industries, from finance to social media.

Source: Bloomberg

Before creating Ethereum, Buterin co-founded Bitcoin Magazine, where he explored the potential of cryptographic transaction ledgers. This early involvement in the Bitcoin community shaped his understanding of blockchain’s shortcomings, motivating him to address problems such as limited scripting capacity and network congestion. Recognized by prominent economists and technologists, Buterin has received accolades, including a World Technology Network award, for his forward-thinking vision of the blockchain revolution.

Today, Buterin remains an influential figure in crypto, advocating for advanced scaling solutions like shard chains and sustainable approaches like proof of stake. Through the Ethereum Foundation and various crypto projects, he encourages developers around the world to collaborate on open-source initiatives and harness blockchain’s power for real-world impact.

Vitalik Buterin’s Personal Stats

Full Name: Vitaly Dmitrievich Buterin

Birthplace: Kolomna, Russia

Nationality: Russian-Canadian

Education: Briefly studied computer science at the University of Waterloo

Notable Works: Co-founder of Ethereum, co-founded Bitcoin Magazine

Primary Focus: Decentralization, open-source development, and crypto innovation

History of Vitalik Buterin

Vitalik Buterin was born in Kolomna, Russia, in 1994. He moved to Canada at age six when his family sought better educational opportunities. Demonstrating an exceptional aptitude for math and economics early on, Buterin attended a private high school that nurtured his analytical skills. During his teenage years, he discovered Bitcoin and delved into its underlying technology.

Eager to write about blockchain developments, Buterin co-founded Bitcoin Magazine, becoming a key voice within the crypto community. While studying computer science at the University of Waterloo, he formulated new ideas for a more programmable blockchain platform.

Convinced that Bitcoin’s scripting language was too limited, he wanted a blockchain that could handle complex ideas and decentralized applications. After winning the Thiel Fellowship and receiving a grant for $100,000, he dropped out of college to focus on Ethereum full-time.

The Creation and Development of Ethereum

Source: ethereum.org

By creating an entire, Turing-complete programming language as a native aspect of blockchain technology, Buterin and his team have provided developers with powerful tools to create dApps. Unlike Bitcoin, which prioritized secure, peer-to-peer transactions, Ethereum offered a broader framework capable of supporting thousands of unique crypto projects.

Developed in close collaboration with other co-founders Gavin Wood, Joseph Lubin, and Charles Hoskinson, Ethereum is the product of ideas and innovation from across the entire crypto landscape. The project took shape under the guidance of the Ethereum Foundation, an organization that directs research and resources toward the platform’s ongoing growth.

Over time, Ethereum garnered attention from mainstream enterprises, spawning countless Ethereum-based projects focused on DeFi, NFTs, and more. While the network confronted issues of scaling and network congestion, Buterin and the Ethereum developers continually sought solutions to advanced problems, such as transitioning to proof of stake, to keep the Ethereum network resilient and future-ready.

The Ethereum White Paper and Development

Vitalik published Ethereum’s foundational White paper in late 2013, outlining a decentralized platform with a flexible scripting language. The document sparked immense interest, heralding a shift from narrow transaction-based functionality to a limitless environment for decentralized software.

Early Ethereum developers believed that a universal programming layer could catalyze financial and social innovations. Supported by an enthusiastic community, they built robust development tools, forging what became known as the Ethereum Virtual Machine.

Rapid progress followed, culminating in the Ethereum mainnet launch in 2015. This milestone set the stage for tens of thousands of Dapps, forging a global movement around blockchain technology.

The Conception of Ethereum

Buterin envisioned a blockchain platform that could handle advanced smart contracts and user-generated tokens without constant forking. By drawing together ideas from other ecosystems, he devised a plan for a next-generation blockchain.

Co-founders joined the project, and an early prototype emerged during Ethereum’s “yellow paper” era, where design decisions were hotly debated. This collaborative process shaped Ethereum into a decentralized form of computing, paving the way for decentralized finance, digital collectibles, and a wave of blockchain applications impacting real-world industries.

Historical Ethereum Initial Coin Offering (ICO)

Source: Cryptorank

The Ethereum ICO took place in mid-2014 and is considered one of the earliest successful token sales. Developers needed funding to realize Vitalik Buterin’s vision, so the Ethereum Foundation offered ether (ETH), the chain’s native token, to early supporters in exchange for Bitcoin.

The sale raised around 31,000 BTC, which was worth roughly $18 million at the time, signaling a massive vote of confidence in a decentralized software development platform. This ICO accelerated Ethereum’s initial development, funding the creation of key tools and the Ethereum Virtual Machine.

As a result, it also is largely responsible for popularizing the concept of ICOs, leading to a wave of blockchain projects that used similar crowdfunding models. Despite controversies surrounding later ICOs, Ethereum’s offering remains historic for demonstrating that a global community would collectively invest in a shared blockchain vision.

Ethereum 2.0

Ethereum 2.0 represents a major overhaul to the network, addressing concerns about scalability, security, and sustainability. A cornerstone of Ethereum 2.0 is the transition from proof of work to proof of stake, an evolution designed to reduce the network’s reliance on energy-intensive mining.

The Merge, which took place on September 15th, 2022, combined the proof of stake Beacon Chain with Ethereum’s mainnet. This move signaled Ethereum’s commitment to reducing energy consumption by up to 99 percent, marking a milestone in environmental efficiency. Buterin’s vision for Ethereum 2.0 also includes scaling solutions like sharding, which partitions the blockchain into smaller “shards” to handle more transactions in parallel.

What Makes Ethereum Different From Bitcoin

Ethereum’s native cryptocurrency stands out from Bitcoin primarily due to its programmable blockchain, enabling developers to build decentralized applications that go well beyond simple transactions. Let’s dig into how this makes the Ethereum blockchain radically different.

Smart Contracts and Dapps

Smart contracts are self-executing pieces of code residing on the Ethereum blockchain. They automate agreements without intermediaries, driving dApps across finance, gaming, supply chain, and beyond. Developers can write these contracts in languages like Solidity, unleashing the potential for complex transactions and services within a trustless environment.

This approach contrasts with Bitcoin’s more restricted scripting language, which primarily supports sending and receiving BTC. By allowing anyone to create smart contracts and launch Dapps, Ethereum transformed blockchain technology into a full-fledged software development platform rolled up in a crypto, enabling thousands of use cases that transcend digital currency alone.

DeFi and NFTs

Ethereum played a pioneering role in decentralized finance, powering platforms like Uniswap, MakerDAO, and Aave, which let users lend, borrow, and swap tokens without centralized intermediaries. These DeFi protocols leverage smart contracts to provide transparent, efficient services accessible to anyone with an internet connection.

Ethereum also catalyzed the boom in NFTs, representing unique digital items like artwork and collectibles. Markets such as OpenSea rely on Ethereum’s NFT standards (ERC-721) to tokenize and authenticate ownership of digital assets.

By supporting DeFi and NFTs, Ethereum diversified its ecosystem, cementing itself as a versatile blockchain platform that extends well beyond payment systems.

The Impact of Vitalik Buterin on the Crypto Industry

Advocacy for decentralization & Open-Source Development

Buterin supports a transparent development model, encouraging the community to propose improvements and refine protocols collectively. This approach helped the Ethereum community assign roles through consensus, forming a decentralized structure. His focus on open-source ethos drives continuous innovation, ensuring that new features and scalability solutions remain accessible to all.

Thought Leader and Public Speaker

Beyond software development, Buterin often speaks at conferences and publishes thought pieces on network upgrades, social impacts, and global collaboration. Media outlets refer to him as a leading voice in shaping blockchain policy. By dissecting complex ideas into approachable topics, Buterin promotes a widespread understanding of blockchain’s philosophical and technological foundations.

Philanthropy and Social Contributions

Vitalik Buterin has donated substantial crypto assets to organizations like the Machine Intelligence Research Institute and the Sens Research Foundation, contributing to scientific and humanitarian projects. He also champions initiatives in regions with limited financial infrastructure. By using his wealth for philanthropic efforts, he exemplifies how blockchain success can spark positive change.

Vitalik Buterin’s Investments

While best known for his work on Ethereum, Buterin also shows interest in other crypto projects (mostly the memecoins on the Ethereum chain), occasionally providing angel funding or participating in advisory roles. He has been linked to collaborations with teams exploring machine intelligence or innovative blockchain solutions.

Source: Arkham

Donations and philanthropic activities often include gifting cryptocurrencies to various causes, reflecting his broader conviction that digital assets can serve the public good. Beyond crypto, Buterin sometimes invests in open-source endeavors that expand the potential of decentralized platforms.

Although public disclosures are scarce, his portfolio appears to balance core Ethereum-based projects with strategic support for initiatives that align with his moral and technological vision.

Vitalik’s Investment Strategy

• Focuses on projects that enrich the Ethereum ecosystem
• Prioritizes open-source protocols promoting transparency and user empowerment
• Emphasizes research-driven solutions in artificial intelligence, cryptography, and blockchain scalability
• Supports philanthropic avenues seeking to apply blockchain for social good
• Maintains a long-term perspective on both financial returns and ethical impact

Vitalik Buterin’s Net Worth

Determining Vitalik Buterin’s net worth is not straightforward, partly due to crypto market volatility and his various holdings. He has publicly disclosed the Ethereum address, which holds around 40 ETH, currently. However, this address is only part of a broader multichain wallet worth over $1.2m and is likely only a small portion of his assets. Arkham Intelligence recently revealed another address belonging to Vitalik, showing a net worth of $526 million. Furthermore, Vitalik Buterin is known for donating, philanthropy, and liquidating portions of his funds, adding further complexity to exact estimates.

FAQs

How did Vitalik Buterin make money?

He primarily earned wealth through his early involvement in Ethereum. As a co-founder, he received ETH allocations during the project’s founding stages, which increased dramatically in value over time.

What is the IQ of Vitalik?

Vitalik Buterin’s IQ is not publicly known, but his exceptional analytical abilities and recognition by the crypto community demonstrate that he has substantial intellect.

How much Ethereum does Vitalik own?

Vitalik Buterin’s ETH address is 0xab5801a7d398351b8be11c439e05c5b3259aec9b, and Etherscan data shows there’s 39.565267129855593739 ETH. As of February 25th, 2025, this has a value of about $94,640.81 (@ $2,392.02/ETH). It’s worth noting, however, that this wallet is part of a multichain wallet worth more than $1.2m, but it is the only address that Buterin has publicly disclosed.

How rich is Vitalik Buterin?

Wealth estimates range widely, reflecting crypto’s volatility. His net worth likely hovers in the nebulous $100m-$1b range.

How old is Vitalik Buterin?

Vitalik Buterin was born on January 31st, 1994. As of 2025, he’s 31 years old. 

The post Who Is Vitalik Buterin? Meet Ethereum’s Visionary Founder appeared first on NFT Evening.

Blockchain technology fuels this revolution, and some coins stand out for their unique strengths. Solana is one of them, grabbing attention in the crowded crypto world. In this guide, we will review what Solana is and how it works, its pros and cons, and whether it has a future in this busy crypto space.

What is Solana (SOL)?

Solana is a blockchain platform designed to handle many transactions quickly and cheaply. It was created in 2017 by Anatoly Yakovenko and launched in March 2020. The main goal was to solve the problems of slow speeds and high costs seen in other blockchains, such as Bitcoin and Ethereum.

Solana uses a unique system called Proof of History to keep track of time and order events, allowing it to process transactions faster than many competitors.

The network can handle up to 65,000 transactions per second. That’s a huge number compared to Ethereum’s 15 or Bitcoin’s 7 tps. It keeps costs low too – about $0.00025 per transaction. This makes it attractive for developers building apps like decentralized finance tools, NFT marketplaces, or games. 

So, what is SOL? Solana’s native token is called SOL. It’s used to pay for transactions and interact with smart contracts on the Solana network.

Developers like Solana because it supports Rust and C programming languages for building smart contracts. It also has a growing ecosystem with over 400 projects, including Serum, a decentralized exchange, and Raydium, a trading platform. The block time is also super fast (400–600 milliseconds).

Solana Ecosystem

The Solana ecosystem is all the projects, apps, and tokens built on the Solana blockchain. The ecosystem has over 400 projects, including decentralized finance apps, NFT platforms, and games.

Two big parts of the Solana ecosystem are meme coins and DePIN narratives. Memecoins are tokens based on jokes or internet memes, like BONK or POPCAT. They are super popular on Solana because the blockchain is fast and cheap, so anyone can make and trade them easily. A platform called Pump.fun, built on Solana, lets people create meme coins quickly, and over 3 million tokens have been made this way.

DePIN stands for Decentralized Physical Infrastructure Networks. These are projects that use blockchain to manage real-world stuff like internet networks or computing power. Examples of Solana include Helium, which provides wireless coverage, and Hivemapper, which maps roads.

How does Solana work?

Solana is a layer-1 blockchain, meaning it’s its own standalone network (not built on top of some other blockchains). The goal? Make decentralized systems fast and cheap enough for real-world use, like payments, gaming, or NFT marketplaces.

Solana uses validators, which are computers that confirm transactions and keep the network secure. These validators work together using the delegated Proof of Stake (PoS) mechanism, but with a twist: Solana adds Proof of History to it. This means the network splits transactions into small batches and processes them fast, keeping fees very low. 

That’s the basics – now let’s zoom into its key working tech:

Proof of History

Proof of History is Solana’s way of tracking time. Most blockchains need nodes to agree on when transactions happen. This takes time. Solana skips that part and each validator makes a timestamp using a function called SHA-256. 

This function hashes data into a unique code. Each hash links to the one before it. This creates a chain of timestamps. It proves the order of events without extra checks. Validators use these timestamps to process transactions fast. PoH works with Proof of Stake to make Solana secure and quick.

Sealevel

Sealevel lets Solana handle many tasks at once. Most blockchains process transactions one by one. Sealevel runs multiple smart contracts at the same time. Smart contracts are the code for dApps. 

Sealevel finds transactions that don’t conflict. For example, a payment and an NFT mint can happen together. This uses modern hardware like GPUs with thousands of cores. Solana can process thousands of smart contract calls per second.

Solana’s Technology

Solana’s tech is a combo of Proof of History, Sealevel, and a few other tricks working together. Here’s how it all connects:

Proof of History gives the network a built-in clock, slashing the time validators spend syncing up. It’s like every transaction comes with a “time tag” that’s impossible to fake, so the network can move fast without tripping over itself.

Sealevel takes that speed and multiplies it by running thousands of smart contracts in parallel. It’s built to use modern tech – like high-end CPUs and GPUs – pushing performance to levels older blockchains can’t touch.

Other pieces fill in the gaps:

• Tower BFT: Solana’s version of Proof of Stake, optimized with PoH, to keep validators honest and the network secure.
• Gulf Stream: A system that pushes transactions to validators before the current block is even done, cutting wait times even more.
• Pipeline and Turbine: These split up the work of processing transactions and sharing data across the network, like an assembly line for a blockchain.

All this runs on a network of high-spec validators – think machines with 12-core CPUs, 128 GB of RAM, and fast SSDs. That’s a lot beefier than what Bitcoin or Ethereum nodes need, but it’s why Solana can hit those 65,000 TPS numbers in theory (real-world peaks have been closer to 2,000-3,000 TPS so far, still impressive).

History of Solana

Solana started in 2017 when Anatoly Yakovenko, a former engineer at Qualcomm and Dropbox, wrote a whitepaper. He proposed a new idea called Proof of History (PoH) to fix blockchain scalability issues. Bitcoin and Ethereum were slow because nodes had to agree on transaction orders through heavy communication. He began coding in C in late 2017 in a private project.

In early 2018, Yakovenko teamed up with Greg Fitzgerald, another ex-Qualcomm engineer. Fitzgerald suggested switching the code to Rust, a faster and safer programming language. Yakovenko rewrote it in two weeks.

Stephen Akridge, also ex-Qualcomm, joined later and boosted performance by offloading signature checks to GPUs. The trio – Anatoly, Greg, and Stephen – founded a company initially named Loom. They renamed it Solana after Solana Beach, California, where they’d lived and surfed, to avoid confusion with an Ethereum project called Loom Network. Solana’s mainnet beta launched on March 16, 2020. 

Key Milestones

• 2021 Boom: Solana’s token, SOL, soared 12,000% in value. Its market cap hit $70 billion in November 2021, driven by NFT and DeFi hype. Visa added Solana support for USDC payments in September 2023.
• Outages: The network faced issues. In September 2021, it went down for 17 hours due to a transaction surge. More outages hit in May 2022 (7 hours), June 2022 (4.5 hours), and October 2022 (6 hours), caused by bugs or bot attacks. Another outage occurred on February 6, 2024.
• FTX Crash: In November 2022, the FTX exchange collapse tanked SOL’s price by 40% in a day. FTX and Alameda Research held $982 million in SOL. Solana’s market cap dropped from $55 billion in January 2022 to $3 billion by year-end.

As of February 26, 2025, Solana is a top blockchain for speed and low costs. Its market cap fluctuates but ranks it among the biggest cryptocurrencies. It’s used for DeFi, NFTs, and gaming, though outages and centralization critiques linger. The network keeps growing, backed by a strong developer community.

Solana vs Ethereum

Smart contracts

Solana uses Rust and C programming languages for smart contracts. These languages are harder to learn but can be more efficient. Ethereum uses Solidity, which is easier for developers to use and more popular in the crypto space.

Consensus mechanism

Solana combines Proof-of-History (PoH) and Proof-of-Stake (PoS). PoH helps order transactions quickly, while PoS secures the network. Ethereum uses only Proof-of-Stake (PoS), which is energy-efficient but not as fast as Solana’s system.

Speed and Cost

Solana processes about 65,000 transactions per second, making it one of the fastest blockchains. Ethereum processes only about 15-30 transactions per second, which makes it slower. Solana has very low fees, usually less than $0.01 per transaction. Ethereum has higher fees, which can range from $1 to $50 or even more during busy times or network congestion.

Quick Verdict: Solana is faster and cheaper, while Ethereum is more popular and widely used for smart contracts.

Advantages & Disadvantages of Solana

Advantages:

• Processes over 65,000 transactions per second (TPS) using Proof of History (PoH) and Proof of Stake (PoS)
• PoH creates a timeline for quick transaction confirmation by validators
• The average block time is 400 milliseconds, faster than Ethereum’s 10-15 seconds
• Transaction fees average $0.00025, much lower than Ethereum’s $0.30 or more
• Supports developers building dApps like DeFi and NFT marketplaces

Disadvantages:

• The network faced multiple outages, like a 17-hour downtime in September 2021 from a transaction surge
• Only around 4,500 validator nodes secure it, compared to Ethereum’s 100,000 validators for network security
• 48% of initial SOL tokens went to insiders, raising centralization concerns
• Reliability issues question long-term stability
• Less decentralized than competitors due to fewer validators and high hardware demands.

Solana Price

Solana’s price has seen dramatic changes since its launch in 2020. It started at around $0.22 during its initial coin offering. By January 2021, it was $1.50, but it surged to a peak of $259.96 in November 2021.

This 12,000% rise was driven by growing interest in its fast transactions and NFT boom. However, the price crashed in 2022 after the FTX collapse, as FTX and Alameda Research held large SOL stakes worth $982 million. By December 2022, SOL dropped to $10, with a market cap of $3 billion. In 2023, it recovered to around $23 by March, reaching a $7 billion market cap as the crypto market rebounded.

As of Feb 2025, SOL’s exact price is $139.96 (at the time of writing) with a market cap of $69.73 billion.

Source: CoinMarketCap

Partnerships

Solana Foundation has built key partnerships to boost SOL’s real-world use. In 2020, it teamed up with Circle to bring USD Coin (USDC) to its blockchain, enabling fast, stable payments. This tied into a bigger deal when Circle partnered with Visa in 2021, letting Visa merchants settle USDC payments on Solana. Visa confirmed moving millions in USDC during pilots.

Another major partnership is with Chainlink, integrating its Oracle network in 2021 to update price data every 400 milliseconds, critical for DeFi apps. Solana also joined forces with Tether to add USDT, expanding stablecoin options.

Beyond finance, Solana partnered with Google Cloud in 2022, integrating BigQuery for analytics and running a validator node. Amazon Web Services (AWS) supports Solana nodes via its Node Runner App, easing setup for developers. 

In 2023, Shopify adopted Solana Pay, letting users pay with USDC instantly. Solana Mobile’s Saga phone, launched in May 2023, comes with preinstalled dApps, sold in regions like the US and EU. These partnerships with tech giants and payment firms show Solana’s push for mainstream adoption, though their success hinges on network reliability.

Solana Wallet

Solana wallets let users store, send, and stake SOL tokens securely. The best Solana wallets are:

• Phantom Wallet is a popular choice, a browser-based wallet launched in 2021, supporting SOL and Solana-based tokens. It integrates with dApps like Raydium and offers staking with over 50 validator options, averaging 5-7% annual rewards. 
• Solflare Wallet also supports staking and NFT management. It has a simple interface and works on desktop or mobile. 
• Solana’s command-line wallet provides access to new features before they hit third-party apps, though it requires technical know-how.
• Ledger and Trezor hardware wallets also support Solana and SPL tokens.

How to Invest in Solana (SOL)?

Here is a step-by-step guide on how to buy Solana:

1. Choose a Crypto Exchange: Select a cryptocurrency exchange that supports SOL. Coinbase serves over 100 countries and accepts USD or EUR. Binance offers low trading fees starting at 0.1% per trade and supports debit or credit card payments. Bybit and MEXC are also reliable options.
2. Create an Account: Sign up by providing an email, password, and identity verification documents like a driver’s license or passport. Verification takes a few minutes on Binance or up to a day on Coinbase depending on volume.
3. Deposit Funds: Add money to your account using bank transfers, debit cards, or credit cards. Binance accepts card deposits with a 1-3% fee.
4. Find SOL/USDT: Go to the trading section and search for SOL/USDT pair. 
5. Place an Order: Use a market order to buy instantly at the current price. A limit order lets you set a specific price, such as $140. Binance processes trade in seconds due to its high-speed system.
6. Confirm Purchase: Check your order details and confirm. SOL appears in your exchange wallet instantly. 

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How to Store SOL Coin?

You have two main options to store your SOL coins: software wallets and hardware wallets. 

Software wallets are free apps or browser extensions. Phantom is a popular choice built for Solana. It supports SOL, NFTs, and token swaps with a simple interface. 

• How to Store SOL on Phantom: Download Phantom from its official site, create a wallet, and save your 12-word seed phrase offline. This phrase recovers your funds if you lose access. You can send SOL from an exchange to Phantom by copying your wallet address and pasting it into the exchange’s withdrawal section. Transactions cost less than $0.01 and complete in seconds due to Solana’s speed.

Hardware wallets offer more security by keeping SOL offline. Ledger Nano X is a top option costing $149. It stores SOL and over 5,500 other cryptocurrencies. 

• How to Store SOL on Ledger Nano X: Connect it to your computer, install the Solana app via Ledger Live, and generate a wallet address. Transfer SOL from an exchange to this address. Ledger’s keys stay offline, protecting against hacks.

Avoid keeping large amounts on exchanges like Coinbase. They control your keys, and hacks have happened – like the recent $1.4 billion Bybit breach in 2025. 

Is Solana a good investment?

Solana is a good investment depending on its performance, technology, and risks. Solana’s price hit $250+ in November 2021 but sits at $140 today at the time of writing. It ranks among the top 5 cryptocurrencies by market cap. Solana hosts many decentralized apps and a booming NFT market, with sales overtaking Ethereum sometimes. However, risks exist as Solana faces outages.

Conclusion: Does Solana have a future?

In a nutshell, Solana’s future looks bright because of its powerful technology and real-world use. Its blockchain uses Proof of History and Proof of Stake to process 65,000 transactions per second with fees under $0.01, beating many rivals in speed and cost. 

This makes it perfect for decentralized apps, NFTs, and DeFi, supporting over 400 projects already. Staking lets users earn 7% yearly returns, adding value for holders. While it’s had some network hiccups, its ability to handle huge volumes and stay eco-friendly keeps it ahead.

FAQs

How much is Solana worth?

Solana (SOL) is currently priced at around $140 per coin, according to live data from CoinMarketCap. Its market capitalization stands at approximately $70 billion, making it one of the top cryptocurrencies by value.

Is Solana a buy, hold, or sell?

Determining whether Solana is a buy, hold, or sell depends on your financial goals and risk tolerance. Its price of $140 and a market cap of $70 billion show a strong market presence, but it’s down over 52%% from its all-time high of $294.33, per CoinMarketCap data.

Can I make passive income with Solana?

Yes, you can earn passive income with Solana by staking your SOL tokens. Platforms like Binance offer around 7% annual returns for staking, where you lock up SOL to support the network and earn rewards. You can check out our guide on the best crypto staking platforms.

What is Solana used for?

Solana is used to power fast, low-cost transactions and decentralized applications (dApps). It supports over 400 projects, including DeFi platforms, NFT marketplaces, and gaming ecosystems, with a capacity of 65,000 transactions per second, per Solana’s official claims. SOL tokens pay for fees, staking, and governance on the network.

What blockchain is Solana on?

Solana operates on its own native blockchain, designed as a Layer-1 network. Unlike Ethereum, which uses rollups, Solana relies on its Proof of History and Proof of Stake mechanisms for scalability. It’s a standalone chain, not built on another blockchain.

What makes Solana unique?

Solana stands out due to its Proof of History (PoH) combined with Proof of Stake (PoS), enabling it to handle 65,000 transactions per second with fees below $0.01, per Solana Labs. This hybrid consensus, unlike Ethereum’s slower 15 tps, boosts speed and efficiency.

The post What is Solana (SOL) and How Does it Work? appeared first on NFT Evening.

In this deep dive, we’ll look at what exactly Bitcoin is and isn’t, so that you have the information you need to begin positioning your investments. Whether you’re just beginning your crypto journey or exploring new investment avenues, understanding Bitcoin’s core concepts—its finite supply, how it’s mined, and its broader implications for the monetary system—can help you gauge why it continues to make headlines and spark debates.

What Is Bitcoin?

Bitcoin is a virtual currency not controlled by any central authority—no government, bank, or corporation. Instead, it relies on a global network of nodes running software that verifies and records every transaction, which makes Bitcoin incredibly unique. At its core lies the blockchain, a shared ledger that remains transparent and nearly impossible to forge due to cryptographic techniques. Created by an anonymous entity or group under the pseudonym Satoshi Nakamoto, Bitcoin set forth the idea of a purely peer-to-peer electronic cash system.

Unlike traditional money, Bitcoin has a hard-coded limit of 21 million coins, which endows it with the property of scarcity. Bitcoin transactions utilize a decentralized verification method known as proof of work, where miners compete to validate blocks and earn Bitcoin rewards. Meanwhile, private and public keys let users control their funds without relying on a central bank.

Evolution of Bitcoin

In late 2008, the Bitcoin white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” appeared on a cryptography mailing list, presenting a plan for a decentralized currency. A few months later, the Genesis Block—the very first block on the Bitcoin blockchain—was mined on January 3, 2009, carrying a brief message referencing a newspaper headline about bank bailouts.

This block’s mining marked the network’s official launch. Early adopters and enthusiasts soon began experimenting with software that allowed them to send Bitcoin among themselves, despite its negligible monetary value at the time.

Bitcoin’s supply hinges on a process known as block rewards, where miners receive newly minted coins for validating transactions. Initially, the reward was 50 BTC per block, which halves approximately every four years. This halving schedule ensures that the rate of new Bitcoin entering the market decreases over time, reinforcing the idea of controlled scarcity.

Over the years, Bitcoin’s community introduced finer subdivisions, called satoshis, named after its founder Satoshi Nakamoto. One Bitcoin equals 100 million satoshis, meaning transactions can be incredibly small if needed. Gradually, Bitcoin gained recognition as a store of value as well as a medium of exchange.

While early usage of Bitcoin cryptocurrency mostly revolved around niche forums or novelty purchases, mainstream attention soared with each price surge and ongoing debate about its utility. Today, Bitcoin has grown from a niche experiment into a widely accepted digital asset, fueling innovations in fintech, retail payments, and even institutional investments.

The Blockchain Technology behind Bitcoin

Bitcoin’s success owes much to the blockchain in Bitcoin software, a decentralized record-keeping system that ensures every transaction is verifiable and resistant to tampering. This technology uses a network of computers, or nodes, which hold copies of the shared Bitcoin ledger and work together to confirm transactions, keeping everything accurate.

Blockchain

A blockchain can be imagined as a chronological chain of blocks, each block holding a list of transactions. Once a block is validated and linked to the chain, altering its data without others noticing becomes nearly impossible.

Each block refers back to the previous block, so if an attacker attempts to modify older entries, they would have to rewrite subsequent blocks across the entire network. This level of transparency and security is what allows Bitcoin participants to trade peer-to-peer with minimal trust in any single intermediary.

Because all nodes maintain a copy of the ledger that records Bitcoin transactions, no central authority can erase or censor legitimate transactions.

Encryption

Within the Bitcoin network, encryption techniques enable secure creation and verification of transactions. Users hold private keys, which are long alphanumeric strings used to sign transaction requests.

Only the holder of this private key can authorize a payment from a specific Bitcoin address. The public key, meanwhile, is derived from the private key but does not grant spending power by itself.

Hashing algorithms, such as SHA-256, protect block data from tampering. These algorithms condense information into a fixed-length output called a hash. Any small change in the original data creates a vastly different hash, making it straightforward for the network to detect attempts at manipulation.

Collectively, these cryptographic methods underpin Bitcoin’s security model, promoting a trustless environment where transactions proceed without relying on a central body to validate who owns which coins.

What gives Bitcoin value?

Bitcoin’s value arises from multiple factors, including scarcity, broad acceptance, and distinctive attributes that set it apart from physical cash or government-backed currencies.

Rarity

The 21 million-coin limit is crucial to Bitcoin’s appeal as a scarce resource. New Bitcoin enters circulation via block rewards, which halve roughly every four years. This predictable reduction in supply growth often sparks price interest. Because no single authority can create more coins, many see Bitcoin as protection against inflation in a world where central banks can issue currency at will.

Durability

Unlike physical money that can deteriorate, digital Bitcoin exists on the blockchain ledger, which is maintained by a global array of nodes. The network can survive localized failures because multiple copies of the ledger are stored worldwide. If a data center goes offline, the ledger still resides in other locations, ensuring continuity and protecting user balances from single points of failure.

Divisibility

Bitcoin can be divided into very small units, called satoshis, each equal to one hundred millionth of a full BTC. This makes it suitable for both large-scale moves—such as corporate treasury purchases—and microtransactions, for instance, tipping in online communities.

Traditional fiat currencies often face transaction fees or rounding limitations. Meanwhile, Bitcoin’s flexibility in terms of units encourages a wide array of usage, from everyday payments to investment in Bitcoin ETFs.

Why is Bitcoin a New Form of Money?

Bitcoin upends traditional monetary concepts by merging advanced cryptography with a decentralized framework. Rather than placing trust in banks or government-issued notes, individuals use a peer-to-peer protocol and a distributed ledger to confirm ownership.

Because no central authority issues or controls Bitcoin, its monetary policy is preprogrammed and resistant to alterations. While the central bank of a country can print extra fiat money, Bitcoin follows a halving schedule that reduces supply growth.

Bitcoin’s peer-to-peer model sidesteps intermediaries such as banks or payment processors. People can send BTC directly to others, even across borders, without incurring hefty transfer fees or delays associated with conventional remittance channels.

Some users view Bitcoin primarily as a digital payment solution. Merchants increasingly accept it for items like electronics or hotel bookings. Others treat BTC more as a store of value, holding it in hopes of price appreciation. The market has proven volatile, so investing in Bitcoin does have risks involved.

In the political sphere, Bitcoin often gains whenever governments emphasize pro-crypto or pro-business legislation. For instance, the Trump inauguration sparked discussions around reducing regulatory barriers, which translated into a more welcoming environment for crypto innovation.

Ultimately, Bitcoin creates and functions as a new form of money by weaving together scarcity, decentralization, and robust technical security. Whether individuals seek to avoid conventional banking, hedge against inflation, or pursue digital commerce worldwide, Bitcoin’s model provides a refreshing alternative to traditional currencies.

How To Buy Bitcoin

• Pick a trustworthy exchange: Research established platforms that operate in your country, checking trading fees, currency support, and user reviews.
• Create an account: Sign up with a valid email address and password. Most reputable exchanges require identity verification before you can deposit fiat.
• Deposit funds: Transfer money via bank deposit, credit card, or possibly stablecoins if your region faces banking restrictions. Watch out for any fees.
• Place an order: Choose a market or limit order, specifying how much BTC you want to buy.
• Secure your coins: After purchasing, move the Bitcoin into a personal wallet for better control. Hardware or software wallets can add extra safety.
• Stay informed: Keep an eye on market trends and regulatory changes that may influence Bitcoin’s value or availability.

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For more details on buying BTC, check out our step-by-step guide on how to buy Bitcoin.

How To Mine Bitcoin

• Decide on Your Hardware: Begin with an ASIC miner specifically built for Bitcoin’s SHA-256 algorithm. Powerful rigs like Antminer models typically outperform CPU or GPU options.
• Set Up a Wallet: Generate or use an existing Bitcoin address to receive Bitcoin mining rewards. A secure, reputable wallet ensures your earned BTC stays protected.
• Join a Mining Pool: Rather than mining alone, most miners join pools to combine the computing power of multiple large computer systems and split rewards proportionally, improving the consistency of earnings.
• Install Mining Software: Configure a program that communicates with your ASIC device, connects to the pool, and monitors the hashrate and payout progress.
• Check Electricity Costs: Mining demands high energy usage, so confirm your local rates. Calculate profitability by balancing rewards against operational expenses.
• Track Performance: Keep tabs on hashrates, pool statistics, ongoing costs, and block rewards. Adjust configurations or upgrade equipment if your output lags below costs.

How To Use Bitcoin

Use Bitcoin as a payment

More and more merchants worldwide accept Bitcoin for goods and services, making it an increasingly versatile payment option. You can buy electronics, book hotels, or settle invoices where merchants display a BTC address or QR code.

Online platforms often integrate third-party services like BitPay or BTCPay Server to process transactions and simplify checkout steps. Transactions typically finalize within minutes once the network confirms them. Keep in mind that some vendors automatically convert BTC to fiat, so your spending experience can remain relatively seamless, albeit subject to variable transaction fees.

Source: Bitcoin.org

Use Bitcoin as investment and speculation

Some investors treat Bitcoin as digital gold, holding it long-term as a store of value, while others speculate on short-term price swings. Platforms like exchanges or broker apps let you buy and hold BTC, watching for potential appreciation. Trading tools range from spot orders to margin or futures positions for higher risk-reward opportunities.

Because Bitcoin’s price can move sharply, set clear strategies and keep an eye on market signals. Whether you aim for steady accumulation or active trading, always maintain secure storage practices.

Risks of Investing in Bitcoin

Bitcoin offers potential rewards, but investors must acknowledge various risks. Understanding these aspects can help you decide whether Bitcoin aligns with your financial goals.

Regulatory risk

Governments can enact rules that restrict how cryptocurrency exchanges operate or impose taxes on crypto gains. Rapid policy changes can disrupt trading, limit fiat on-ramps, or introduce compliance hurdles. Keep updated on the stance in your jurisdiction.

Security risk

Owning Bitcoin involves safeguarding private keys. If a hacker gains access to your exchange or bank account or if you mishandle your wallet backups, you may lose funds irreversibly. Exchanges themselves can face hacks, so hardware wallets or trustworthy platforms are crucial.

Insurance risk

Unlike traditional bank deposits insured by entities like the FDIC, Bitcoin accounts lack guaranteed protections if an exchange collapses. Some services do provide partial coverage, but comprehensive insurance remains rare. Evaluate an exchange’s reputation and policies before storing large sums there.

Fraud risk

Scammers often exploit new investors through phishing emails, Ponzi schemes, or fake wallet apps. Vigilance about unusual offers and verifying URLs can shield you from malicious actors. Rely on official websites and recognized social media handles for updates.

Market risk

Bitcoin’s price can be volatile, influenced by everything from global economic events to tweets. Gaians or losses may double, then halve in just weeks. Diversifying holdings and not over-allocating to BTC can mitigate these swings.

Conclusion

Bitcoin’s emergence has sparked a sweeping change in how people handle money, offering an independent alternative to central-bank-backed currencies. It stands out for its fixed supply, decentralized security, and global accessibility, making it attractive for both daily payments and long-term investments.

If you decide to buy or mine Bitcoin, do your research, pick secure platforms, and carefully manage your private keys. With the right planning, Bitcoin can complement a modern financial strategy that seeks digital resilience.

FAQs

Is Bitcoin money?

Yes, while Bitcoin is not a fiat currency issued by a central authority, it does function as money. Users treat it as a medium of exchange and a store of value. That said, acceptance of digital money still varies, and some view it more as a speculative asset.

Is Bitcoin legal?

Bitcoin legality differs by country. Many nations permit trading or holding BTC, though some restrict banking support. Stay updated on laws in your region before transacting.

How much is $1 dollar in Bitcoin?

As of the time of writing, February 12, 2025, $1 is worth roughly 1020 to 1040 satoshis or 0.00001020-0.00001040 BTC.

Where does Bitcoin come from?

Miners produce Bitcoin via proof-of-work: computers solve incredibly complex math puzzles to verify transactions, earning block rewards. Over time, this inflates the supply until the 21 million cap is reached.

Is Bitcoin a stock?

No, Bitcoin is not a stock. It lacks corporate ownership or dividends. Instead, it is a decentralized digital currency, whose price is driven by global supply, demand, and market sentiment.

The post What Is Bitcoin And How Does It Work? appeared first on NFT Evening.

This stability can protect investors from sudden price fluctuations and foster trust in crypto markets. As a result, stablecoins play a key role in the rapid growth of decentralized finance and global payments. In this post, we’re going to look at why that stability makes the stablecoin market so unique.

What Are Stablecoins?

Stablecoins are cryptocurrencies specifically designed to offer a stable value, reducing the wild price swings associated with other digital assets like Bitcoin or Ethereum. They usually achieve this by linking their worth to a reference asset, commonly a fiat currency such as the U.S. dollar. Stablecoin issuers typically manage reserve assets or use algorithmic mechanisms to sustain the peg, aiming for consistency in market pricing.

Over the years, the stablecoin market has rapidly grown in terms of both adoption and market cap. This momentum reflects a demand for dependable tokens that preserve purchasing power and reduce exposure to crypto volatility.

Source: CoinMarketCap

Financial institutions, traders, and everyday users alike are drawn to stablecoins for their practical applications. For example, stablecoin tokens facilitate faster and cheaper cross-border payments compared to traditional methods, cutting out several layers of intermediaries.

Because stablecoins aim to maintain price stability, they have become a popular choice for those navigating the broader cryptocurrency market. When the market price falls or spikes for other cryptocurrencies, users can move into stablecoins to protect their holdings from massive fluctuations.

They also serve as a bridge between digital assets and fiat currency, offering a relatively liquid and stable option for trading pairs. Overall, stablecoins present a digital currency solution that combines the speed and convenience of crypto with the dependability of more traditional financial instruments.

Why are Stablecoins Important?

Stablecoins play a pivotal role in addressing some of the biggest hurdles in crypto trading and everyday transactions.

First, they help reduce volatility by maintaining a stable price, allowing users to protect their funds without fully exiting the crypto ecosystem. This stability is especially vital during sudden market downturns or price spikes when investors need a reliable store of value.

Another key benefit lies in their potential for international payments. Stablecoins offer fast and cost-effective cross-border transactions, eliminating the need for multiple bank intermediaries. For individuals sending remittances back home, this could mean cutting down on fees and shortening transfer times.

Stablecoins also promote financial inclusion by providing an accessible digital currency that is not tied to volatile cryptocurrencies or expensive wire transfers.

Traders also rely on stablecoins as safe havens. When the market becomes turbulent, switching to a stablecoin allows them to quickly protect their capital. This leads to minimal downtime and rapid re-entry when the market conditions improve.

From reducing friction in global trade to enhancing liquidity in the crypto markets, stablecoins present multiple advantages that empower both institutional and retail users, affirming their importance in the evolving digital finance landscape.

How Do Stablecoins Work?

Stablecoins work by maintaining a steady value through different types of backing or algorithms, designed to offset the ups and downs in the cryptocurrency market. Many stablecoins are fiat collateralized, which means each token is supported by an equivalent reserve of fiat currency, such as U.S. dollars, held by a custodian. Others might be crypto-backed, where digital assets serve as collateral. These arrangements help stabilize their price by reassuring holders that the stablecoin is redeemable for a set amount of the underlying asset.

Algorithmic stablecoins, on the other hand, rely on smart contracts and market incentives to regulate supply and demand. If the stablecoin price drifts away from its targeted peg, the algorithm triggers actions—like minting or burning tokens—to bring it back into alignment. This type includes non-collateralized stablecoins that use seigniorage style mechanisms to keep the coin’s market value close to its intended price.

No matter what mechanism underpins the coin, stablecoin issuers must maintain enough reserves or robust protocols to reassure users of the coin’s value. This reliance on backing asset systems or algorithmic controls is what sets stablecoins apart from other crypto assets, allowing them to offer relative price stability and function as reliable digital dollars in the global financial system.

Types of Stablecoins

1. Fiat-Collateralized Stablecoins

Fiat-collateralized stablecoins rely on reserves of traditional currencies, such as the U.S. dollar, to maintain a stable value. Each token is pegged 1:1 to its fiat currency counterpart, held in a bank account or by a financial institution.

Tether (USDT) and USD Coin (USDC) are prominent examples, often supported by audits or attestations to confirm the backing asset. This straightforward model provides a high degree of transparency and simplicity for users seeking consistent price stability, matching the fiat currency’s value.

Source: TransFi blog

At the same time, the centralization inherent in these stablecoins creates a dependency on external custodians and regulatory oversight. Despite these challenges, fiat-collateralized stablecoins remain among the most widely traded and trusted stablecoins, bridging the gap between digital assets and the traditional financial system.

2. Crypto-backed stablecoins

Crypto-backed stablecoins use digital assets like Ethereum or other cryptocurrencies as collateral. These stablecoins are often over-collateralized to account for the volatility of the underlying asset.

One well-known example is DAI, issued by MakerDAO. Users lock crypto collateral in smart contracts, generating DAI in exchange. When the price of the collateral falls, additional measures may be required to maintain the peg, such as selling collateral to cover any shortfall. This model can be more decentralized than fiat-backed stablecoins because it relies on blockchain-based protocols rather than banks.

The biggest challenge is that the volatility of crypto collateral introduces an added layer of risk. Proper monitoring and governance are essential to sustaining the token’s stable value over time.

3. Commodity-backed stablecoins

Commodity-backed stablecoins peg their value to physical assets like gold, oil, or other commodities. For instance, gold-backed stablecoins hold reserves of precious metals in secure vaults. The token’s price reflects the market value of the commodity, which can offer a hedge against inflation and currency fluctuations. This approach links digital currencies to inherently stable assets, combining the liquidity of crypto with the reliability of tangible reserves.

Investors seeking to hold a stablecoin tied to real-world value may find these tokens particularly appealing. However, trust is crucial, as holders must rely on the issuer to maintain and verify the physical reserves. Additionally, the commodity’s own price volatility can influence the stablecoin’s value, though usually to a lesser degree than crypto-based alternatives.

4. Non-collateralized stablecoins/Algorithmic Stablecoins

Algorithmic stablecoins do not rely on collateral in the traditional sense. Instead, they use smart contracts and algorithmic rules to manage supply and demand, aiming to keep the token price near a specific peg.

When the price drifts above the peg, new tokens might be minted to increase supply. If the price falls, tokens can be removed from circulation to reduce supply. These seigniorage-style stablecoins depend on market incentives and confidence in the system’s ability to self-correct.

While this model can be highly decentralized and capital-efficient, algorithmic stablecoins have faced scrutiny due to high-profile collapses that eroded investor trust. Maintaining a stable price with no external collateral requires robust mechanisms, extensive liquidity, and ongoing community support.

Stablecoin Regulations

In the United States, stablecoins are governed by several regulatory bodies. The Securities and Exchange Commission (SEC) evaluates whether specific stablecoins should be classified as securities. Meanwhile, the Commodity Futures Trading Commission may step in if any aspects of stablecoins fall under commodity or derivatives regulations.

In addition, stablecoin issuers often need to comply with anti-money laundering rules enforced by the Financial Crimes Enforcement Network. Various legislative proposals have been introduced to formalize stablecoin regulations, focusing on reserve requirements, consumer protections, and standardized transparency.

In Europe, stablecoin oversight is evolving with the introduction of the Markets in Crypto-Assets (MiCA) regulation. MiCA aims to create a harmonized framework for crypto assets across European Union member states. Stablecoin issuers will have to meet specific criteria for capital reserves, governance, and consumer disclosures.

This structure is designed to foster innovation in the stablecoin ecosystem while providing safeguards against risks like market manipulation or systemic instability. Both the U.S. and European approaches signal that regulatory clarity is on the horizon, potentially boosting confidence in stablecoins and encouraging mainstream adoption.

Benefits of Stablecoins

Use Cases Of Stablecoins

Payments and P2P transactions

Stablecoins are ideal for everyday payments due to their stable value and fast settlement times. Users can send funds to friends, family, or businesses around the world without worrying about crypto volatility.

Cross-border transactions and Remittances

Users can transfer funds instantly at lower fees, compared to conventional international wire services. This boosts financial inclusion, especially in regions with limited access to traditional banking.

Foreign exchange (FX) and trade finance

By acting as digital dollars or other pegged tokens, stablecoins can mitigate foreign exchange risks. In trade finance, stablecoins reduce settlement times and improve transparency, enhancing global commerce. Their stable price helps merchants and suppliers handle international transactions more efficiently.

DeFi Applications

Decentralized finance protocols rely heavily on stablecoins to provide liquidity and minimize exposure to crypto volatility. Lending platforms often use stablecoins as collateral, while yield farming strategies revolve around stable assets for steadier returns.

Automated market makers depend on stable liquidity pools to offer predictable pricing. The inherent stability of fiat collateralized or algorithmic stablecoins underpins many DeFi innovations, allowing participants to engage in complex financial activities with reduced risk.

The future of stablecoins

Stablecoins appear poised for continued expansion as regulatory clarity improves and more users seek stable value in the cryptocurrency market. Companies like PayPal have introduced their own stablecoin tokens (PayPal USD), highlighting growing mainstream interest. Central banks worldwide are also researching digital currencies, which could integrate or compete with existing stablecoins.

As protocols evolve, algorithmic stablecoins may refine their pegging mechanisms to counter previous pitfalls and offer robust solutions. Technological advancements, such as sidechains and cross-chain bridges, will likely enhance interoperability across various blockchain networks. This could result in more fluid movement of digital assets and stablecoins between DeFi platforms, exchanges, and real-world applications.

Even traditional financial institutions are embracing stablecoins as a means to improve transaction speeds and reduce fees. Despite ongoing debates over centralization, stablecoins remain a foundational element in bridging traditional finance and emerging crypto ecosystems.

FAQs

What are the top 4 stablecoins?

According to data from CoinMarketCap, Tether (USDT), USD Coin (USDC), Ethena USDe (USDe), and Dai (DAI) are currently the leading stablecoins by market cap. They have market caps of $143.5B, $58.8B, $5.5B, and $5.4B, respectively, as of March 16, 2025.

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How Do I Choose The Right Stablecoin?

Focus on factors such as transparency, reserve audits, and your own risk tolerance to choose the best stablecoin for you. If you prefer a fully regulated option, USD Coin may be suitable, while decentralized seekers might consider Dai.

Is Bitcoin a stablecoin?

Bitcoin is not a stablecoin. It is the first cryptocurrency, and its value is based on market forces and perceived value in the PoW model. It experiences significant price volatility due to market forces.

Is Ethereum a stablecoin?

No, Ethereum’s value fluctuates based on market demand. Although Ethereum powers many stablecoin projects through smart contracts, it is not inherently pegged to any asset.

How does stablecoin make money?

Stablecoin issuers can earn revenue from interest on reserve assets or fees for issuance and redemption. Algorithmic models may generate profits through seigniorage mechanisms, depending on market demand.

Are Stablecoins Safe To Use?

Many stablecoins are considered relatively safe due to transparent reserves and regulations. However, risks exist if issuers lack adequate collateral or if algorithmic designs fail.

The post Stablecoins Explained: What They Are, How They Work, and Types appeared first on NFT Evening.

From fast-paced growth to legal scrutiny, his journey reflects the broader challenges of the cryptocurrency market. In this article, we explore CZ’s background, his impact on crypto projects, and the high-profile legal issues that have recently shaped his public image.

Who is Changpeng Zhao?

Changpeng Zhao, also known as CZ, is an entrepreneur who emerged as a dominant figure in the crypto realm and was the primary force behind the launch of Binance in 2017.

Within months of its debut, Binance experienced rapid growth, earning a reputation for low trading fees and a high-speed matching engine. In just a few years, Binance expanded its services worldwide and became a cornerstone of the global financial system’s crypto segment.

As Binance’s founder, Changpeng Zhao turned the exchange into a multifaceted platform, offering everything from spot trading and futures to DeFi products. Under CZ’s leadership, Binance cultivated a user base spanning millions across numerous countries, transforming him into a well-known crypto billionaire.

Despite Binance’s success, CZ repeatedly faced scrutiny from regulators, including the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC). Investigations ranged from allegations of operating an unregistered exchange to enabling money laundering, thrusting CZ into the public eye.

Why CZ brings great impact to crypto projects

CZ’s announcements, tweets, and strategic decisions can trigger swift market reactions. For instance, when he has praised or listed certain tokens on Binance, prices sometimes soared within hours. Some examples include projects like DeSci and YZi Labs (formerly Binance Labs) that saw significant price movements after CZ mentioned them on social media or integrated them into Binance’s ecosystem. This phenomenon is often referred to as the “Binance effect”, highlighting CZ’s role as a market influencer.

Source: CoinGecko

Source: CoinGecko

YZI Labs

YZI Labs is a lesser-known venture initiated by Changpeng Zhao to explore blockchain-based applications and potential innovations. Its projects span from software development to investment in emerging crypto technologies. Although the lab has maintained a relatively low profile, it represents CZ’s ongoing ambition to advance blockchain and expand his influence beyond Binance.

The Collapse of Sam Bankman-Fried’s FTX

Sam Bankman-Fried, founder of FTX, rose to fame by building a major crypto exchange that rivaled Binance for a time. However, a series of liquidity crises and internal management issues led FTX to a catastrophic collapse.

Investigations uncovered staggering misuse of customer funds, alongside allegations of fraudulent accounting. Sam Bankman-Fried’s downfall sent shockwaves through the crypto world and prompted users to question the reliability of other large platforms.

While Changpeng Zhao and Binance were not directly linked to FTX’s internal problems, the fiasco highlighted the risks of centralized exchanges in the eyes of regulators, including the Department of Justice and the Securities and Exchange Commission.

The collapse also emboldened critics who argue that crypto exchanges, regardless of size, can pose potential threats to financial security and consumer protection. In the wake of the FTX debacle, CZ’s leadership and choices at Binance have come under ever closer examination.

What happened to Changpeng Zhao? Civil lawsuits and Criminal conviction

In late 2023, the Binance CEO faced multiple federal charges, sparking legal battles that tarnished his standing as a tech visionary.

Investigations indicated that Binance may have broken anti-money laundering statutes, and prosecutors argued that the platform turned a blind eye to illicit activities. The DoJ and the SEC claimed CZ knew about loopholes that might enable wrongdoing. Eventually, CZ pleaded guilty to violating the Bank Secrecy Act in a federal court.

In a surprise twist, he agreed to step down from Binance and was sentenced to four months in prison. The plea deal also included paying substantial fines, reflecting the severity of the claims and underscoring the exchange’s legal obligations in safeguarding against financial crimes.

According to court documents, Binance’s founder and former CEO acknowledged mishandling certain compliance protocols, a revelation that rattled the cryptocurrency community. Despite the conviction, many await clarity on whether Zhao will pursue other business ventures in the crypto space.

Early Life and Education

Changpeng Zhao was born in Jiangsu, China, and later moved to Canada with his family during his teenage years. Both of his parents are educators who, at an early age, instilled in him a drive for academic excellence. Once settled in Vancouver, CZ took on a range of jobs to help support his family.

His aptitude for computers led him to study at McGill University in Montreal, focusing on computer science. This foundation laid the groundwork for his future endeavors, including roles at the Tokyo Stock Exchange and Bloomberg Tradebook. These experiences prepared him for a prominent position within the evolving financial system.

Career and Founding of Binance

Before he became the founder of Binance, CZ built a solid reputation in financial software. He co-founded Fusion Systems in 2005, creating high-frequency trading solutions for stock markets. Recognizing crypto’s potential, he served as chief technology officer at OKCoin for a short period.

In 2017, Zhao founded Binance as an unregistered exchange first, offering low trading fees and an easy-to-use interface. Binance launched amid a crypto boom, rapidly becoming the world’s largest cryptocurrency exchange by trading volume.

Source: CNN

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Personal Life

Despite his status as a crypto billionaire, CZ generally keeps his personal life private. He is known for a modest lifestyle, sporting simple attire and avoiding ostentatious displays of wealth.

Instead, he focuses on crypto education and maintaining a global presence at conferences and events. Media outlets, including the South China Morning Post, have highlighted his desire to keep family details off the public stage.

While critics argue that secrecy is partly due to legal obligations and heightened regulatory pressures, supporters see it as an intentional effort to separate personal wealth from the complicated realm of cryptocurrency.

The Terra Case: Binance’s Investment and Legal Actions

Binance faced criticism following its investment in Terra, a blockchain ecosystem that collapsed after its native token and stablecoin lost their pegs. The crash triggered widespread losses for investors worldwide.

Binance based its initial support on the project’s promise of innovation, but the meltdown revealed significant flaws. Many questioned if Binance turned a blind eye to red flags, prompting regulators to investigate potential breaches of securities and exchange commission guidelines.

Changpeng Zhao and Binance executives publicly expressed disappointment, even halting certain trading pairs tied to Terra tokens. Legal repercussions included lawsuits alleging that Binance did not adequately disclose risks.

As the exchange in the world with the highest trading volume, Binance’s involvement amplified scrutiny surrounding the incident. CZ defended Binance’s investment strategy, stressing that it was driven by a belief in project fundamentals.

What Is Changpeng Zhao’s Net Worth?

At its peak, CZ was counted among the richest figures in the industry, with some estimates putting his maximum net worth at nearly $100 billion. However, factors like Binance’s regulatory pressures, the plea deal involving the Bank Secrecy Act, and overall market conditions have influenced those estimates. Reports claim that Zhao still controls a significant stake in Binance, adding to his net worth. A reasonable current estimate would be $10-$25 billion.

Final Thoughts

Zhao’s story reflects the meteoric rise and inherent challenges of crypto space. As CZ shattered conventions in the financial world, the waves he made would ultimately attract regulatory attention. While his next move may always be a mystery, CZ’s past achievements will continue influencing how exchanges evolve.

FAQs

When did Changpeng Zhao resign from Binance?

Changpeng Zhao resigned as Binance’s chief executive officer after facing federal charges, pleading guilty to violating the Bank Secrecy Act and agreeing to pay major fines. His resignation occurred in late 2023 as part of a plea agreement.

What does CZ mean by 4?

CZ’s reference to “4” has often been interpreted as a strategic guideline or joke in his tweets. Common interpretations include prioritizing core principles, ignoring negative news, focusing on the product, and maintaining community engagement.

How much of Binance does CZ own?

While exact figures are not publicly available, estimates suggest that CZ still controls a significant ownership stake in Binance. Before he pleaded guilty, public reporting indicated he held a majority share.

What Is Changpeng Zhao’s Twitter Account?

CZ is relatively active on X, and his official handle is @cz_binance, where he shares company announcements, market insights, and personal opinions related to the crypto industry.

The post Who Is Changpeng Zhao (CZ)? The Story of Binance Founder appeared first on NFT Evening.

Crypto terms are special words used to talk about digital currencies and blockchain technology. Just like learning new slang when using social media, understanding crypto terms will help you feel more confident when investing in the space.

We’re going to explain some of the most popular cryptocurrency terms in simple and easy words. No confusing tech talk: just clear definitions that help you understand how crypto works.

Crypto Glossary A to Z: Common Terms and Definitions

Address

This is a specific unique string of characters, used in sending or receiving crypto. Unlike the bank account number, it sometimes appears as an alphanumeric and QR code. Each address is linked with one particular wallet and needs to be produced for a specific transaction.

Airdrop

This refers to a no-cost distribution of cryptocurrency tokens to wallet addresses, normally to have publicity for a new project or to thank loyal users. The recipients of the airdrops will either be random or targeted and the recipients must qualify for specific conditions before they receive the tokens, for instance, holding a token of a specific type.

Altcoins

Altcoins are any cryptocurrency aside from Bitcoin, such as Ethereum, Litecoin, or Solana. It is usually something that tries to improve on a shortcoming of Bitcoin or offers unique features such as smart contracts or faster transactions.

All-time high (ATH)

An all-time high is the highest price a cryptocurrency has ever reached in its lifetime. It is one of the metrics that are most important to both investors and traders, typically used to track the performance of a coin over time.

All-time low (ATL)

An all-time low is the lowest price that has ever been reached by a cryptocurrency. Normally, it is utilized in risk assessment and hunting for the best time to purchase when there are market downturns.

Assets Under Management (AUM)

This refers to the net value of all assets managed by a crypto fund, exchange, or platform. AUM is considered one of the most essential metrics when measuring the scale of success for financial institutions in the crypto space.

Bear Market

A bear market is a period where the prices continue going down. The market signals negativity. Prolonged downtrends, low trading volumes, and a sense of pessimism characterized this period for investors.

Block

A block is a collection of transactions recorded on a blockchain. Every block contains a cryptographic reference called hash to the prior block, creating a chain of linked data that makes the information secure and immutable.

Block Height

The block height is the number of blocks in a blockchain from the genesis block (block 0). It is used to measure the progress and length of a blockchain.

Block Reward

A block reward is a type of incentive that is provided to miners or validators to mine a block. The reward usually consists of newly minted cryptocurrencies and the fees earned by transactions.

Blockchain

A blockchain is a decentralized, unalterable ledger of transactions, recorded on a network of computers. It is not centralized and runs on a consensus mechanism like proof of work or proof of stake to validate transactions.

Bull Market

A bull market is when prices rise. The sentiment in the crypto market is usually positive, and there’s increased trading activity, optimism among investors, and an overall increase in the market.

Burn

This is the process of permanently removing tokens from circulation by sending them to an irretrievable (null) address. This process reduces the total supply, which often increases the value of the remaining tokens.

Centralized

A centralized system is controlled by a single authority, such as a company or government. In crypto, centralized exchanges (CEXs) are platforms where a central entity manages user funds and transactions.

Circulating Supply

The number of coins or tokens circulating in the market at a given time. Locked or reserved tokens are excluded and used to determine the market cap of a cryptocurrency.

Cold Wallet

A wallet that does not connect to the internet; this makes it secure from hacks. Examples include hardware wallets and paper wallets.

Consensus

It is how the network agrees to validate transactions. There are PoW and PoS in consensus mechanisms among others.

Cryptographic

A form of mathematical technique securing information and a transaction in crypto for privacy, integrity, and authenticity.

Cross-Chain

Cross-chain technology allows for the interaction of different blockchains, thus allowing assets and data to be moved seamlessly across networks. It is very important in improving interoperability in the crypto ecosystem.

Custodial Wallet

A custodial wallet is a wallet where a third party holds the user’s private keys. Though convenient, it is less secure than non-custodial wallets because the user does not have full control over their funds.

Crypto Exchange

A crypto exchange is a web portal where a user can buy, sell, or trade cryptocurrency. Most exchanges are centralized (CEX) and others are decentralized (DEX).

Crypto Winter

Crypto winter is a long term of declining prices and low market activity. It’s generally characterized by decreased investor interest and slow project progress.

dApp

A dApp is an application that runs on a blockchain instead of a single company’s server. This means no person or group controls it. Examples include platforms for borrowing money, trading digital assets, and buying or selling unique digital items.

DAO (Decentralized Autonomous Organization)

A DAO is an online community that decides together by digital voting. Its members do not have a leader in charge; instead, they observe a set of rules embedded as code, and those who possess these special tokens can vote on changes.

Decentralized

When something is decentralized, it is not controlled by one person or company. But instead, many people or we can say computers share control, making it more open and secure. Blockchains are a well-known example of decentralized technology.

DeFi (Decentralized Finance)

DeFi is a new way of accessing financial services such as saving, lending, or trading without going through banks and other traditional institutions. It uses blockchain technology and provides the power of control over money.

Derivatives

Derivatives are financial agreements based on the value of another asset, like Bitcoin. They help traders manage risk or try to make a profit by guessing how prices will change in the future.

Difficulty

In blockchain systems, the difficulty is a number that shows how hard for miners it is to add a new block of data, and it generally changes over time to keep the system running smoothly and prevent new blocks from appearing too quickly or too slowly.

Distributed Ledger

A distributed ledger is a digital record that is shared through various computers rather than being stored in one place. This makes it difficult to alter and fake information, making it much safer and more transparent.

DEX (Decentralized Exchange)

A DEX is an online platform where people can trade digital currencies without using a bank or company as a middleman. 

Double Spending

Double spending happens when someone tries to spend the same digital currency more than once. Blockchain technology prevents this by keeping a secure and public record of all transactions.

DYOR

It is a common term in cryptocurrency investing. It tells people to study a project well before investing their money instead of depending on advice from others.

Ethereum Improvement Proposal (EIP)

An EIP is an official proposal to enhance the technology of Ethereum. Developers post such ideas, and the community discusses and votes on them.

ERC-20

ERC-20 is a standard that guarantees that digital tokens on Ethereum will work correctly on different platforms like apps, wallets, and exchanges.

ERC-721

ERC-721 is a set of rules for making one-of-a-kind digital tokens, known as NFTs. These tokens can represent digital art, collectibles, or virtual assets.

Ethereum Virtual Machine (EVM)

The EVM is the processing system of Ethereum that runs smart contracts. All transactions being run on the EVM have to follow the same rules and be secure.

Exchange Rate

The exchange rate is the value of one cryptocurrency in comparison to another or traditional money, such as dollars. It is subject to supply and demand.

Exit Scam

An exit scam occurs when the creators of a crypto project take investors’ money and disappear. This is one of the most common risks in the industry.

Explorer

A website to check any transaction, a balance in someone’s wallet, and even details regarding the blocks on the blockchain – all this through an explorer on a blockchain site.

Ethereum

Ethereum is a blockchain technology platform that allows users to design applications and make smart contracts on its network. Notably, Ethereum is another big cryptocurrency ranking next after Bitcoin.

Encryption

Encryption is a technique that encodes information in a secret code so that data cannot be accessed by hackers.

Fiat Currency

Fiat money is a traditional currency, such as the US dollar or the euro, which governments create and maintain. It’s not made of gold or silver; it is valued because people believe in it.

FOMO (Fear of Missing Out)

FOMO occurs when people rush into buying a cryptocurrency because its price is increasing rapidly. This is fear that one might miss out on a massive opportunity and, as a result, leads to impulse buying.

Fork

This is when a blockchain splits into two versions. Sometimes it’s just a small update, but sometimes it creates an entirely new and separate currency.

FUD (Fear, Uncertainty, Doubt)

FUD occurs when negative news or rumors circulate to cause panic, forcing people to sell their crypto. It is most often used as a market manipulation tool.

Fundamental Analysis

This is one way to analyze a cryptocurrency by investigating its technology, team, and real-world usage. Investors use this analysis to determine whether it has long-term potential.

Futures Contract

A futures contract is an agreement to buy or sell crypto at a predetermined price on a specified date. A trader uses it to take benefit of price variations or cap against loss.

Faucet 

A crypto faucet is essentially a website or app that gives out free small amounts of cryptocurrency. They are often used to introduce new people to the world of crypto or to advertise a new project.

Flash Loan

A flash loan is a DeFi loan that does not require collateral but rather should be borrowed and then repaid all in the same transaction.

Fungible

Something is fungible if each unit is exactly the same and can be exchanged for another. In the case of cryptocurrencies like Bitcoin, one Bitcoin is always equal to another. Hence, Bitcoin is fungible.

Full Node

A full node is a computer that keeps a complete copy of a blockchain and checks every transaction to keep the network secure and fair.

Gas

Gas is the cost that has to be paid to execute a transaction or even a smart contract on the Ethereum network. It is a compensation for the miners’ usage of the computing resources.

Gas Limit

This is the maximum amount a user is willing to spend on a certain transaction. If it is too low, the transaction may fail.

Gas Price

It is the number of cryptocurrencies charged per unit of gas. In short, it incentivizes the miner to process any transaction over the others if a high gas price is attached.

Genesis Block

This is the very first block that contains all subsequent blocks in a blockchain. Genesis is hardcoded in a network.

Governance Token

A governance token is a kind of token, which gives rights to vote on project or protocol decisions. It’s one of the most important features of decentralized organizations.

GPU Mining

GPU mining involves using graphics processing units to solve complex mathematical problems, which validate the transactions on the blockchain. In comparison, GPU mining is not as efficient as ASIC mining, but it is more versatile.

Gwei

Gwei is the smallest denomination of Ether, used for measuring gas prices. One Gwei is 0.000000001 ETH.

Green Address

A green address is a trusted Bitcoin address. It is given by reputable services to reduce double-spending risk during instant transactions.

Halving

Halving means the compensation provided to the miners for mining new blocks and adding them to the blockchain is cut in half. The time interval in which this event occurs is usually fixed four years in the case of Bitcoin. It helps control inflation through the rate of new coin creations.

Hard Cap

A hard cap is the maximum amount of money a project intends to raise in an initial coin offering, after which no more tokens are sold.

Hard Fork

A permanent split in a blockchain results in a new version that isn’t compatible with the previous version, often ending up in two cryptocurrencies, like Bitcoin and Bitcoin Cash.

Hash

A hash is a unique string of characters created by processing data through a cryptographic function. You can call it a digital fingerprint and is often used to secure and verify transactions on the blockchain.

Hash Rate

The hash rate measures how much computing power is being used to mine and process transactions on a blockchain. A higher hash rate means the crypto or Bitcoin network is more secure.

HODL

HODL is a short form of “hold” and a misspelling started in a Bitcoin forum. Nowadays, it has been widely known in the crypto community as not selling or trading your cryptos, even though the market is unstable.

Hot Wallet

A hot wallet is a type of wallet that is directly connected to the internet. While it is great for frequent use, it lacks security compared to a cold wallet.

Hybrid

Hybrid blockchain models utilize both PoS and PoW systems in an attempt to maintain security, scalability, and efficiency in terms of energy usage.

Hash Function

A hash function is a mathematical process that converts input data into a fixed-size string of characters. It is a key part of blockchain technology, helping to keep data secure and unchangeable.

Hash Power

Hash power refers to the total computing power used for mining on a blockchain. More hash power increases a miner’s chances of solving a block and earning rewards.

ICO (Initial Coin Offering)

An ICO is a fundraising method where new cryptocurrencies are sold to investors. It is the same as an IPO but for crypto projects.

IDO (Initial DEX Offering)

An IDO is a token sale that is conducted on a decentralized exchange (DEX). It allows projects to raise funds directly from the community without intermediaries.

Immutable

It is the synonym for unchangeable blockchain data, the feature by which once a transaction is recorded, it cannot change or be deleted to ensure transparency and trust.

Impermanent Loss

Impermanent loss refers to the loss in terms of reduced value of the assets held in a liquidity pool than the ones they individually own or have apart. This brings risks for DeFi liquidity providers.

Inflationary

Such crypto assets have an increasing supply with each passing time because of their token generation. 

Interoperability

Interoperability is the ability of different blockchains to communicate and share data. It is crucial in making a connected and efficient crypto ecosystem.

IPFS (InterPlanetary File System)

IPFS is a decentralized file storage system that enables users to store and share data across a distributed network. It is often used with blockchain projects.

Issuance Rate

It is the rate at which the new coins are created and are distributed. In other words, it is an important factor concerning the inflation and supply dynamics in a cryptocurrency.

JOMO (Joy of Missing Out)

JOMO is the opposite of FOMO and is defined as being happy with not joining the crowd or taking advantage of something. It points toward patience and long-term thinking.

Jager

A Jager is the smallest unit of a Binance coin, similar to that of a Satoshi in Bitcoin. It is 0.00000001 BNB.

Joint Consensus

Joint consensus is the type where more than one party agrees on validating transactions. It is part of some hybrid blockchain models for more security.

Junk Coins

Junk coins are those low-valued and fraudulent coins, providing little or no utility or potential. It’s often done just to take advantage of naive investors.

JIT (Just-In-Time)

JIT is a trading strategy where orders are executed at the last possible moment to minimize risk and maximize efficiency. It is often used in high-frequency trading.

KYC (Know Your Customer)

The process used by exchanges as well as institutions to verify one’s identity. This is often intended for anti-fraudulent measures. This is against money laundering and other unlawful transactions.

Key Pair

It is made up of a public and a private key. While the former is used in receiving funds, the latter is used more important and used to access and authorize transactions.

Keccak-256

This is a cryptographic hash function used in Ethereum. It provides the integrity and security of data on the blockchain.

KYC/AML Compliance

KYC/AML compliance is following rules that prevent money laundering and verify user identities. These are a requirement for most cryptocurrency exchanges.

KYC-Free Exchange

A KYC-free exchange is an account where the user can trade cryptocurrencies without verifying their identity. MEXC is one of the top no-KYC crypto exchanges.

KYC Whitelist

A KYC whitelist refers to a verified list of users who are allowed to participate in token sales or other restricted activities. It ensures compliance with regulatory requirements.

KYC Verification

KYC verification is the process of submitting personal documents, such as a passport or driver’s license, to prove identity. It is a standard requirement for accessing many crypto services.

Ledger

It is a record of all transactions on a blockchain. It is decentralized and immutable, which ensures transparency and security.

Liquidity

Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity ensures easy trading and market stability.

Limit Order

This is an order that will purchase or sell a cryptocurrency at a given price or better. This enables the trader to have control over the entry and exit points.

Leverage

It gives traders a way to borrow money so as to amplify the position size. Though this will amplify profit, it will increase the risk of massive losses.

Layer 1

It refers to the basic blockchain protocol like Bitcoin or Ethereum. This will handle core functionalities such as validation of transactions and consensus.

Layer 2

These solutions are built on top of Layer 1 blockchains, improving scalability and efficiency. Examples are the Lightning Network for Bitcoin and rollups for Ethereum.

Liquidity Pool

A liquidity pool means funds locked in a smart contract to perform trading on decentralized exchanges. Here, those who provide liquidity can earn fees for contributing to the pool.

Long Position

A long position is when a trader buys an asset with the expectation that its price will rise. It is a common strategy in bullish markets.

Lending Protocol

It is a borrowing and lending of cryptocurrencies in an entirely decentralized nature, with such examples including Aave and Compound.

Market Cap

It is the overall value of a cryptocurrency, found by multiplying its current price with the total circulating supply. The metric is very important in the assessment of the size and popularity of a coin.

Mining

This process verifies the transactions and includes them in the blockchain. The mining efforts are compensated by the issuance of newly generated coins and also transaction fees.

Mining Pool

In this, one or more groups of miners together pool their processing powers to try and solve blocks with higher opportunities. The returns are shared by each miner from the pool directly proportional to every miner’s efforts.

Mainnet

A mainnet is the operational version of a blockchain where actual transactions take place. It is different from a testnet, which is generally used for testing and development purposes.

Margin Trading

In margin trading, a trader borrows money to make bigger trades than his or her balance would otherwise support. 

Merkle Tree

A Merkle tree is an efficient data structure used in blockchains to validate the integrity of long data sets. Without a Merkle tree, all the transactions would not be processed safely.

Mempool

Mempool is an area where all unconfirmed transactions are temporarily stored. Miners select some and add them to the next block.

Metaverse

The metaverse is a virtual space for users to interact, trade, and create content. Blockchain technology ensures ownership of digital assets in such a space.

Multi-signature wallet

A multi-signature wallet demands more than one private key for the authorization of a transaction, which means it is secure without the risk of a single point of failure.

Masternode

A masternode is a specialized node on the blockchain network and can be employed for specific actions, such as transaction validation or offering privacy. Masternode operators are compensated for their service.

NFT (Non-Fungible Token)

An NFT proves ownership of digital items, such as digital art, music, or a piece of virtual land. Because each NFT is unique, they differ from regular digital coins, which all are identical.

Node

In simple words, a node is just a computer that aids the functioning of a blockchain. Nodes check and exchange transactions. However, some nodes keep the complete blockchain history; others only refer to parts.

Nonce

A nonce is a random number miners use to solve puzzles when adding new blocks to a blockchain. It helps keep the system safe.

Network Fees

These are small payments you make when sending crypto. The money goes to miners or validators, who help process transactions. Fees go up when the network is busy.

Nakamoto Consensus

This is how Bitcoin guarantees that all computers (nodes) agree on the same data. It uses mining and follows the longest chain in order to make the network safe.

Non-Custodial Wallet

A non-custodial wallet allows users to have full control over their cryptocurrencies. No company or third party holds your keys, but this means you have to be responsible for keeping your keys safe.

NFT Marketplace

This is a website where people buy, sell, or trade NFTs. Some popular ones are OpenSea and Rarible.

Network Hashrate

This is a measure of the amount of computing power working to secure a blockchain. The more the hashrate, the stronger and safer the network is.

Nested Blockchain

A nested blockchain is built inside another blockchain. It makes use of the security of the main blockchain but works independently in processing more transactions.

Oracle

An oracle is like a bridge that bridges blockchain with the real world, helping smart contracts get outside info, such as weather data or stock prices.

Off-Chain

Off-chain means stuff happens outside the blockchain. It is faster and cheaper but not so secure or transparent as on-chain stuff.

On-Chain

On-chain means everything is recorded on the blockchain. It’s super secure and can’t be changed, but it’s slower and more expensive.

Open Source

This means the blockchain’s source code is public. Anyone can go there and see. Most of the blockchain projects are open-source so people can work together and keep things fair.

Order Book

An order book is a list of buy and sell offers for crypto on an exchange. It shows who wants to buy, who wants to sell, and at what price. Traders use it to decide when to make a move.

Over-the-counter (OTC)

OTC trading is when people buy or sell crypto directly instead of using an exchange. Generally, high-volume investors do this to avoid messing up market prices.

Optimistic Rollup

Optimistic rollup is a method of accelerating transactions on the blockchain. It pools together many transactions and assumes that they are all good unless someone proves otherwise.

Oraclize

Oraclize is a service that helps smart contracts get real-world data. It is an oracle type used in blockchain applications.

Offline Transactions

An offline transaction takes place without internet, often using either a hardware wallet or paper wallet. The reason why one is considered safer is that hackers cannot steal one’s money because one is not connected to the internet.

On-ramp

An on-ramp is essentially how one buys crypto with regular fiat money. Crypto exchanges and apps like Coinbase and Binance use this to deposit funds.

Private Key

This is a private key that functions as a secret password for your crypto. When someone gets this, they can take your money, so you have to keep it safe.

Public Key

A public key is like your crypto address. People can send you money using it, but they can’t take anything from you. It’s created from your private key.

Proof-of-Stake (PoS)

PoS is a way blockchains decide who gets to add new transactions. People lock up their coins (stake them), and the more they stake, the higher their chances of getting chosen. It’s faster and uses less energy than proof-of-work.

Proof-of-Work (PoW)

PoW is the method behind Bitcoin and some other blockchains. One miner solves complex mathematical problems to add new transactions. It’s very secure but requires a great amount of energy.

Paper Wallet

A paper wallet is just your private key and public key written on paper. It’s safe from hackers but easy to lose, so you have to be careful with it.

Peer-to-Peer (P2P)

P2P means people trade directly with each other instead of using a middleman. Crypto makes this safe and easy.

Protocol

A protocol is just a set of rules followed by blockchains. It determines how data moves and how the confirmations of the transactions happen.

Plasma

Plasma is a method of making Ethereum faster. It constructs small extra blockchains that help process transactions so the main network does not get overcrowded.

Permissioned Blockchain

A permissioned blockchain is private and only lets certain people in. Companies use these when they want more control over their data.

Permissionless Blockchain

A permissionless blockchain is open to everyone. Anyone can join, make transactions, or help run the network. Bitcoin and Ethereum work this way.

QR Code

A QR code is a special barcode that contains information, like a crypto address. Instead of typing long wallet addresses, you will just scan the code to transfer or take out crypto easily.

Quantum Computing

Quantum computers are super powerful machines that might break today’s encryption. Crypto experts are working on new ways to protect blockchains from these future computers.

Quantum Resistance

It indicates that crypto security is made strong enough that even quantum computers cannot hack it. The developers are finding ways to protect blockchains for the future.

Rug Pull

The scammers hype up a crypto project and convince people to invest in it. Later, they simply disappear with all the money. This is usually what happens in DeFi when projects don’t have appropriate checks.

Ripple (XRP)

Ripple is a system for moving money between countries super-fast and cheap by using blockchain. XRP is the currency on it.

Rollup

The way to make blockchains fast and cheap. It takes a batch of transactions, bundles them, and processes all of them as a single group rather than one by one.

Rehypothecation

This is where a person uses the same collateral for different loans. That is risky in DeFi since if things go wrong, a lot of people can lose money.

Rebase Token

A rebase token is a crypto that automatically adjusts its supply to keep a stable price. Ampleforth is one example.

Rekt

Slang for when someone loses a ton of money in crypto. Usually used as a joke when a bad investment goes horribly wrong.

Rug Proof

A project is “rug proof” if it has safety measures to stop scams, like locking funds or getting audited. This helps investors feel safer.

RPC (Remote Procedure Call)

A way for programs to talk to a blockchain without running a full node. It helps apps and wallets get blockchain data easily.

Regulatory Compliance

This means following the legal rules for crypto. Exchanges and projects have to do this to avoid getting shut down.

Rug Pull Index

A score that measures how risky a project is. This includes aspects like whether there is locked liquidity and if the team is public and trustworthy.

Satoshi (Sats)

The smallest unit of Bitcoin equivalent to cents in dollars. One satoshi is the same as 0.00000001 BTC, meaning you don’t necessarily need to buy a whole Bitcoin to have some. It’s named after Bitcoin’s mysterious creator, Satoshi Nakamoto.

SegWit (Segregated Witness) 

This is an enhancement of Bitcoin that reduces the size of a transaction by separating additional information. More transactions fit in every block and contribute to a faster network with lower fees for transactions. It also improves the security and scalability of Bitcoin.

SHA-256

It is a highly secure coding system to keep Bitcoins safe. Data gets converted into fixed-length codes so that the data cannot be hacked easily. Bitcoin transactions and mining are secure and trustworthy for the same reason.

Smart Contract

It is more or less a self-running program on the blockchain which follows a set of rules. It is automatically working in nature, which means there is no need for a bank or a middleman. People are using it to create digital agreements, payments, and even games.

Solidity

Solidity is a programming language used to create smart contracts on Ethereum. It works a bit like JavaScript but is made specifically for blockchain apps. If you want to build apps on Ethereum, you’ll need to learn Solidity.

Stablecoin

A stablecoin is a cryptocurrency that keeps a steady price. It’s usually tied to real money, like the US dollar, so it doesn’t jump up and down in value like Bitcoin. People use stablecoins for trading, payments, and avoiding crypto market crashes.

Staking

It is when you lock up your crypto to help run a blockchain network and earn rewards for that. You’re essentially helping to keep the network secure by staking, and in return, you’re going to earn more rewards based on how much you stake.

Sharding

Sharding is a way to make blockchains faster by splitting them into smaller parts. Then every part can execute transactions alone; the overall system doesn’t decelerate for that purpose, making them allow the blockchain to perform several transactions simultaneously.

Sidechain

This is an alternate blockchain running parallel to the main one. It helps the transactions to process faster and cheaper without messing with the main blockchain. Sidechains are fantastic for testing new features and improving scalability.

Soft Fork 

It is a small update to a blockchain that won’t cause a split. It offers new rules but will remain compatible with the old system, so people can keep using the same blockchain without problems. This will be like updating software with improvements without breaking it.

Token

A token is a kind of digital money or an item on a blockchain. Thus, a token can represent a currency or ownership of some other thing.

Tokenomics

Tokenomics is the description of how crypto works with their money stuff, including how many tokens exist and how they are shared along with for what purposes. It is used to help people make a judgment about whether a crypto project is good or not.

Testnet

A testnet is like a practice version of a blockchain. Developers use it to test things before launching them on the real blockchain. The tokens here are fake, so no one loses real money.

Trading Pair

A trading pair is two different cryptocurrencies that you can swap for each other, like Bitcoin and Ethereum (BTC/ETH). It’s how people trade crypto on exchanges.

Turing Complete

If something is Turing-complete, it means it can solve any problem if it has enough time and power. Ethereum’s smart contracts are like this, so they can handle really complex tasks.

Transaction Fee

A transaction fee is the small amount of money you pay when sending crypto. This fee goes to miners or validators who process the transaction. The price changes depending on how busy the network is.

Trustless

A trustless system means that people do not need to rely on each other for things to work. This is made possible by blockchain by using math and rules that cannot be cheated against.

Token Burn

Token burn is when a few tokens are destroyed forever, making the rest of the tokens rarer. This can cause them to have a higher value.

Two-Factor Authentication (2FA)

This is an added security measure in logging into accounts. In addition to a password, you require a code from an app or text message to gain access.

Unspent Transaction Output (UTXO)

UTXO is the crypto that is left over when you make a transaction. It’s like getting change after buying something with cash. The leftover amount stays in your wallet until you spend it again.

Utility Token

This is the kind of cryptocurrency that gives you access to some kind of product or service on a project. Not meant as money, the token can only be used in the system to which it relates; for instance, a ticket for an event.

Validator

The validator refers to the party verifying and endorsing transactions on the blockchain. Provided you stake cryptocurrencies on some network, now you have a chance of becoming a validator where you earn from doing so.

Vesting

Vesting refers to when the flow of crypto tokens is locked, released, and then given out gradually. This prevents the dumping of a lot of tokens at once, thereby causing a crash in the price.

Volatility

Volatility is how much the price of crypto changes. Cryptocurrencies change a lot in a short period of time. This tends to make them high-risk while giving a good chance of major profits.

Wallet

A wallet is where you store your Bitcoin and other digital currencies. It can be online (hot wallet) or offline (cold wallet) to keep your coins safe.

Wash Trading

Wash trading is when someone is buying and selling the same crypto to make it look like there is a lot of activity. It tricks people into thinking a coin is more popular than it is.

Web3

Web3 is sort of the idea of a new internet that’s built on blockchain. Instead of big companies controlling everything, you own your data and can use crypto to interact online.

Whale

A whale is an investor who holds large amounts of cryptos. As such, his buying or selling can easily alter the entire trend of the market.

Whitepaper

A whitepaper is like a paper explanation of what exactly a crypto project is. What it does is explain how something works, why it solves those problems, and why it will be valuable to you.

Wrapped Token

A wrapped token is a crypto that represents another coin on a different blockchain. For example, Wrapped Bitcoin (WBTC) lets you use Bitcoin on the Ethereum network.

XRP

XRP is a cryptocurrency made by Ripple. It’s mainly used for fast and cheap international payments between banks.

Yield Farming

This is a way of getting more crypto through lending or staking of your tokens. The more you put in, the more you benefit from it; however, there are risks attached.

Zero-Knowledge Proof (ZKP)

This refers to the verifiability of the fact that something is true without showing all the details. It is used in crypto for privacy purposes, so you can confirm a transaction without revealing your data.

Zk-Rollup

Zk-Rollup is a method of making blockchain transactions faster and cheaper. It processes many transactions off-chain and then adds them to the main blockchain in one batch.

Zombie Chain

A zombie chain is a blockchain that still exists but has almost no activity. It’s like a dead project that people don’t use anymore.

The post Crypto Terms and Glossary: A to Z Blockchain Terms appeared first on NFT Evening.

What are Crypto Airdrops?

At their core, crypto airdrops are a means of distributing free tokens to encourage early adoption and expand a project’s reach. Some airdrops serve as rewards for existing community members, while others function like referral programs aimed at attracting fresh participants.

In most cases, users complete small tasks, like following social media channels or joining mailing lists. Occasionally, airdrop recipients don’t have to lift a finger—certain teams simply add tokens to wallets meeting specific conditions.

How Crypto Airdrops Work

In an airdrop, a cryptocurrency project typically earmarks a portion of its total supply for free distribution. The team then sets criteria, such as holding an existing token or carrying out designated tasks.

Once these requirements are met, recipients automatically receive tokens in their wallets, or they may claim them through a dedicated platform. This distribution often doubles as a marketing strategy, fueling social media buzz and drawing attention to the project’s features.

Types of Airdrops

1. Standard Airdrop

A standard airdrop is the simplest form of distribution, where projects allocate free tokens to a broad user base, often requiring minimal effort. Sometimes, you just need to provide a wallet address, or you might fill out a short form to confirm eligibility.

2. Bounty Airdrop

A bounty airdrop goes further, requiring participants to complete small tasks to earn tokens. These tasks may include retweeting announcements, writing blog posts, or translating content into different languages.

3. Holder Airdrop

A holder airdrop rewards those already holding a specific cryptocurrency or token in their wallets. The project team checks if a user’s address meets the “holder” criteria—owning a minimum quantity of an existing token—and then sends free coins accordingly. A classic example is when a new Ethereum-based protocol distributes tokens to wallets that hold ETH.

4. Exclusive Airdrop

An exclusive airdrop caters to top supporters, active community members, or key contributors. Instead of distributing tokens widely, the project singles out particular segments: early testers, governance participants, or those who made significant efforts in bug bounties. A prime example is when select NFT communities receive tokens only if they meet strict collector requirements.

5. Raffle Airdrops

A raffle airdrop is akin to a lottery where users complete tasks for a chance to win tokens randomly. Projects may issue “raffle tickets” proportionate to each user’s participation or hold a single grand prize drawing. Some DeFi protocols, for instance, use raffle-style giveaways to incentivize liquidity provision.

How to Find Crypto Airdrops

Locating crypto airdrops typically involves scanning social media, community forums, and dedicated listing platforms like airdrops.io. Websites that track upcoming events often include details about token supply, eligibility, and deadlines. Channels such as Telegram and Discord groups are great for staying updated in real-time.

Source: airdrops.io

Top X Accounts to Follow for Airdrop Info

Chase

Chase offers practical strategies for anyone looking to earn through airdrops. With over 207k followers, he regularly shares updates on both major and lesser-known crypto projects, often breaking down each step of the airdrop process. Chase goes beyond surface-level interactions, exploring dApps built on specific chains and testing them firsthand, then detailing his experiences. This approach ensures that newcomers can emulate his methods with minimal guesswork. By following Chase, you’ll stay informed on up-and-coming blockchains and protocols that might yield lucrative airdrop tokens.

Olimpio

Olimpio is another must-follow for airdrop hunters, boasting around 199k followers. He provides not only airdrop strategies but also news on DeFi, yield farming, and the broader crypto market. His round-up tweets cover essential developments within the past 24 hours, helping you keep up with any new airdrop announcements or significant market changes. Thanks to Olimpio’s consistent updates, you stand a better chance of capitalizing on timely opportunities.

Ardizor

If you’re after both gem-hunting and airdrop alpha, Ardizor is the account to watch. With roughly 423k followers, he routinely points out top Solana-based projects and other trending ecosystems that may offer tokens for active participation. By focusing on especially relevant projects, Ardizor helps you zero in on the best time-to-reward ratio, saving effort and potentially multiplying returns.

How to Claim Crypto Airdrops

Step 1 – Set Up a Compatible Wallet

Choose a crypto wallet that supports the project’s blockchain and network, such as Ethereum, Solana, or the Binance Smart Chain, and get a wallet address. Safeguard your private keys and never share them. In most cases, you can use a cross-chain wallet like Metamask.

Source: Metamask.io

Step 2 – Fulfill Eligibility Criteria

Some airdrops ask for minimal tasks (retweets, sign-ups) or holding an existing token. Complete the requirements to join the distribution list.

Step 3 – Submit Required Information

Depending on the airdrop, you may provide a wallet address through a Google form or a project’s website. Only use official links from trusted sources, avoiding suspicious URLs.

Step 4 – Check Claim Details

Certain airdrops require manual claiming via a dApp or website. In other cases, the project sends tokens to your address automatically.

Step 5 – Verify Tokens in Your Wallet

Once distributed, you can confirm your new holdings by adding the token’s contract address to your wallet or using a block explorer.

How to Earn through Crypto Airdrops

Airdrops can be profitable if managed well. Once you receive tokens, you can decide what to do next.

Sell your tokens

• Immediate Liquidity: Flip tokens quickly for stablecoins or other assets to secure instant value.
• Opportunity Costs: Selling frees funds for other investments.
• Price Volatility: Tokens might depreciate if the hype fades, so early exits often suit short-term traders.

Hold your tokens

• Long-Term Upside: If the project thrives, airdropped tokens may gain significant value later.
• Ecosystem Usage: Some tokens grant governance rights or dApp access.
• Community Support: Holding signals faith in the project, fostering closer ties with other users.

Crypto Airdrop scams

Not all cryptocurrency airdrops are genuine. Always check if the project is recognized within the crypto community, watch for unrealistic promises, and never pay upfront.

How to Avoid Airdrop Scams

• Confirm announcements on official channels.
• Never disclose private keys or recovery phrases.
• Watch for phishing links that post as real websites.
• If an offer appears too good to be true, research thoroughly before engaging.

Crypto Airdrops and Taxes

Depending on your jurisdiction, airdropped tokens may be treated as income at the time of receipt, subjecting you to tax obligations. If the tokens increase in value and you later sell them, capital gains rules may apply. Consult a professional and always keep meticulous records of dates, market prices, and token amounts.

Advantages and Disadvantages of Airdrops

Conclusion: Future of Crypto Airdrops

Airdrops will likely remain a potent marketing approach for cryptocurrency projects, as they efficiently reward early adopters and generate grassroots excitement. Without a doubt, the promise of free tokens will keep enticing new participants, as long as users remain cautious and conduct their own due diligence.

FAQs

Is crypto airdrop profitable?

It can be profitable if the tokens appreciate in value or gain adoption. However, some airdrops offer low-value or illiquid tokens, so outcomes vary widely.

Which crypto has an airdrop?

Countless cryptos airdrop tokens. Keep an eye out for emerging coins and tokens and the chances are good you’ll hear about an airdrop.

How to get a free airdrop in Binance?

You can watch Binance’s Launchpad or promotional events where select projects distribute tokens. Verify official listings, fulfill requirements, and claim through your Binance account dashboard.

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Is airdrop crypto safe?

Genuine airdrops can be safe, but malicious actors sometimes create fake events. Avoid suspicious links, never share private keys, and confirm announcements from official channels.

How do I withdraw from crypto airdrop?

Once airdropped tokens appear in your wallet or exchange account, you can sell or transfer them by selecting “Withdraw” or sending them to another secure address.

The post What Is a Crypto Airdrop? How They Work & Why It Matters appeared first on NFT Evening.

What is Ethereum?

Ethereum is a Layer 1 blockchain-based platform that supports self-executing code called smart contracts. Unlike traditional networks limited to sending digital coins, Ethereum can host entire applications on a decentralized, global infrastructure.Developers write these apps in programming languages like Solidity, deploying them onto the Ethereum Virtual Machine, or EVM. Each action on Ethereum, whether creating tokens or transferring ownership of digital art, consumes a bit of computational effort known as gas, which is paid for by ETH.

Created to expand on Bitcoin’s original idea of peer-to-peer digital value, Ethereum introduced an environment where the community can design and govern services that run without a single point of failure. This approach has paved the way for DeFi, NFT marketplaces, and many other innovative decentralized blockchain-based solutions.

Source: Ethereum.org

History of Ethereum

Ethereum’s story began in 2013 when Vitalik Buterin introduced the idea of expanding Bitcoin’s concept into a fully programmable platform. By 2015, the Frontier release gave developers a basic environment to build dApps, followed by Frontier Thawing, which simplified Ether transfers.

Homestead in 2016 hardened the entire network, with significantly advanced features. With each upgrade, Ethereum matured from a concept into a robust ecosystem, laying the groundwork for further expansions fueling decentralized finance and token creation.

Not long after Homestead, The DAO introduced an experiment in decentralized investment. However, an exploitable flaw let an attacker siphon millions of Ether, prompting debates over how best to protect user funds without undermining Ethereum’s immutability. This event underscored the community’s experimental spirit and readiness to evolve quickly.

Meanwhile, forks like Tangerine Whistle and Spurious Dragon fine-tuned gas costs and system security, ensuring Ethereum could handle denial-of-service attacks and remain stable under growing network demands.

The split/ hard fork

The DAO incident triggered a philosophical split that gave birth to Ethereum Classic. Developers who believed the blockchain’s immutability outweighed practical concerns continued on the old chain, forging ETC. The majority of the community accepted the rollback, leading to the Ethereum we know today.

That experience underscored Ethereum’s decentralized governance, revealing that even a widely shared goal of unstoppable code could bend under extreme circumstances. While the main chain recovered, the divide introduced ongoing debates about how far the community should intervene to correct major exploits.

Proof-of-Stake Transition

From inception, Ethereum developers envisioned a shift away from proof-of-work mining. After years of incremental steps, the Merge in 2022 made proof-of-stake the default consensus method.

Instead of miners, validators stake Ether to secure the network and propose new blocks, sharply cutting energy consumption. While critics worried about potential centralization through large staking pools, supporters note that staking lowers entry barriers compared to running massive mining farms.

As a result, Ethereum parted ways with the resource-heavy approach of past blockchains, hoping that proof-of-stake lighter footprint and built-in economic incentives would strengthen its long-term viability.

How does Ethereum work?

At its core, Ethereum is a distributed ledger that stores all transactions and smart contract data across a network of nodes. These nodes communicate through a peer-to-peer framework and collectively update and validate the state of the blockchain. Each block contains a group of transactions, which nodes verify by running the appropriate smart contract code.

Unlike Bitcoin, which focuses on transferring currency, Ethereum’s focus on programmable logic allows for decentralized applications that handle various tasks without depending on centralized servers.

Blockchain Technology

Ethereum’s blockchain includes a continuously growing list of records, known as blocks, linked cryptographically in chronological order. Every transaction modifies account balances or contract storage. Once a block is confirmed, that data becomes part of the permanent record, visible to all network participants. Ethereum’s Virtual Machine executes code in a trust-minimized environment, enabling a wide range of dApps.

Proof-of-Stake Validation Process

Ethereum upgraded from proof of work mining to proof of stake, where validators stake ETH instead of operating specialized mining hardware.

These validators confirm transactions in proposed blocks, adding them to the chain. If they act maliciously, they risk losing their staked Ether. In return, they earn rewards for honest participation, ensuring security.

This model uses significantly less energy than the previous mining method. By randomly choosing validators to propose and validate blocks, Ethereum’s staking approach aims to preserve decentralization and encourage honest behavior.

Wallets

Ethereum wallets help users manage account balances and sign transactions with private keys. They range from mobile apps like MetaMask to hardware devices like Ledger. Unlike traditional bank accounts, there is no middleman. The user directly controls the private key, allowing them to initiate transactions or interact with smart contracts. Each wallet can hold multiple token types, making it a gateway for DeFi, NFTs, or decentralized gaming.

What is Ethereum 2.0?

Ethereum 2.0 refers to a series of upgrades intended to enhance network scalability, security, and sustainability. The Merge in 2022 swapped out the old proof of work chain for a proof of stake mechanism.

The broader goal of Ethereum 2.0 includes improving user experience by reducing congestion, lowering gas fees, and supporting a global user base. Developers also benefit from more efficient ways to handle state data and execution.

Ethereum Ecosystem

Beyond simply a blockchain, Ethereum forms an entire ecosystem that includes decentralized exchanges, lending protocols, non-fungible token marketplaces, and more. Tracking this ecosystem often involves metrics like total value locked (TVL) in DeFi or daily transaction volumes across tokens. Well-known projects such as Uniswap, MakerDAO, and OpenSea each contribute to Ethereum’s growth.

Ethereum boasts the largest ecosystem in the blockchain world because it was the earliest to offer a fully programmable platform through its EVM. This early-mover advantage enabled developers to embrace smart contracts for everything from digital tokens to entire decentralized finance applications. Over the years, Ethereum has cultivated a vast library of well-tested code, documentation, and infrastructure that appeals to both beginners and advanced teams. 

Source: Coin Bureau

Ethereum’s open standards, like ERC-20 for fungible tokens and ERC-721 for NFTs, have also simplified the process of creating interoperable projects. A wide array of dApps from decentralized exchanges to gaming platforms share composable code, forming a network effect that draws more users and developers to Ethereum over other chains.

Ethereum’s ecosystem growth is also due in no small part to its incredibly devoted, innovative, and supportive developer community, which regularly contributes new tooling, libraries, and educational resources. From frameworks like Truffle and Hardhat to indexing services like The Graph, Ethereum fosters an environment that reduces the technical hurdles of launching blockchain-based applications. The platform’s robust liquidity and high-value user base also encourage new projects to deploy on Ethereum, where they can access large volumes of capital and active users accustomed to DeFi protocols or NFT trading.

Since Ethereum’s main chain is known to frequently be congested and gas fees can spike during peak usage, there is a wide range of Layer 2 solutions have been created to handle many transactions off the main chain. Examples include Arbitrum, Optimism, and Polygon, which bundle or compress activity before relaying final data back to Ethereum’s ledger. 

This relieves network strain, enables faster settlement times, and lowers transaction costs. This means Ethereum can keep its security while Layer 2 networks deliver high performance, ensuring the entire ecosystem remains scalable and inviting to future dApps.

Use cases of Ethereum

Decentralized Finance (DeFi)

DeFi is one of Ethereum’s hallmark achievements, allowing people to access financial services such as lending, borrowing, and trading without relying on traditional banks. Protocols like Aave and Compound provide permissionless loans, while decentralized exchanges like Uniswap facilitate token swaps. This borderless approach has generated billions in total value locked, reflecting how DeFi appeals to users seeking transparency and autonomy in handling their assets.

Non-Fungible Tokens (NFTs)

NFTs revolutionize the concept of digital asset ownership, attaching unique identification to items like art, music, or virtual property. Ethereum’s ERC-721 standard introduced a simple interface for creating and exchanging these tokens. Marketplaces like OpenSea and Rarible let creators mint, sell, or auction NFT collectibles to a global audience. Not only that, but game developers have leveraged NFTs to power virtual economies, from fantasy trading cards to play-to-earn roleplaying games.

Stablecoins

Source: KuCoin

Some projects implement stablecoins, cryptocurrencies pegged to fiat money or other assets, to keep stable value for daily transactions. On Ethereum, popular stablecoins include USD Coin (USDC), Tether (USDT), and DAI. They allow users to move funds between exchanges or dApps with fewer concerns about volatility. Stablecoins also enable straightforward payment in e-commerce scenarios or cross-border remittances, fueled by Ethereum’s global availability.

Creator economy

Beyond NFTs, Ethereum offers numerous ways for independent artists, writers, and developers to monetize content. Creators might launch tokens that grant fans special privileges or set up subscription-based platforms without middlemen. Social tokens, for instance, let influencers engage with supporters in new ways, providing access to exclusive goods or online events. By reducing third-party oversight, Ethereum puts income streams directly in the creator’s hands, fostering deeper relationships with their audience.

Non-financial uses

Some projects employ smart contracts to handle supply chain tracking or authenticate the provenance of luxury items. Others explore digital identity solutions that store user credentials securely in a decentralized database. The potential extends to voting systems or proof-of-existence frameworks that document records or intellectual property.

Decentralized Applications

Decentralized applications, or dApps on Ethereum span gaming, social media, and identity services, showcasing the platform’s wide-ranging capabilities. In gaming, items like virtual pets or digital weapons can become NFTs, as seen in CryptoKitties, granting users actual ownership of in-game assets. Social networks such as Peepeth store user data on-chain so individuals can retain control of their profiles. For identity verification, solutions like uPort allow self-sovereign management of personal data.

DAOs represent a more collective approach, letting token holders vote on proposals and govern assets or projects. Meanwhile, prediction markets like Augur revolve around smart contracts for settling wagers on real-world events, ensuring fair payouts. As more developers realize the potential of on-chain code, Ethereum remains the primary hub for experimentation across numerous sectors.

Ethereum vs. Bitcoin

Ethereum and Bitcoin often share the spotlight as the top two cryptocurrencies by market capitalization, but they serve distinct purposes. Where Bitcoin primarily functions as digital gold, Ethereum focuses on general-purpose programmability. Although Bitcoin’s consensus mechanism uses proof of work, Ethereum transitioned to proof of stake. This shift dramatically reduces Ethereum’s energy consumption while also allowing it to adopt innovative scaling solutions like sharding.

Transaction fees also differ. Ethereum typically imposes gas fees based on computational complexity, while Bitcoin charges per transaction size in bytes. As a result, Ethereum’s fees can fluctuate if network activity spikes due to DeFi or NFT activity. Bitcoin’s supply is capped at 21 million coins, but Ethereum does not have a strict supply ceiling. Ether’s issuance now adjusts dynamically, with a portion of fees burned under EIP-1559. Both remain foundational blockchain networks, though Ethereum’s ambitions in decentralized apps and finance mean it handles more complex tasks.

You can also check the Ethereum supply and its inflation rate here.

Source: ultrasound.money

What makes Ethereum valuable?

Ethereum’s value emerges from its flexibility and community-driven nature. Its open network approach fosters a global pool of developers, validators, and users who collectively shape dApps, DeFi, and NFT marketplaces. This coordinated effort allows Ethereum to evolve quickly through proposals and hard forks, ensuring it can adapt to new challenges. It also benefits from a long history of real-world deployment, with many high-profile projects proving its reliability.

Strength of public blockchain network

Ethereum is maintained by thousands of independent node operators who validate transactions and store the blockchain’s state. This decentralized method prevents any single party from unilaterally changing transaction records or censoring users. The vast node network helps Ethereum resist certain attacks since compromising it would require coordinating numerous independent participants.

Dynamically adjusting the supply schedule

Thanks to the London upgrade (EIP-1559), a portion of transaction fees is removed from circulation, partially offsetting new issuance. After the transition to proof of stake, ETH staking yields also influence the fiat currency’s net inflation. This balance between new token minting and fee burning grants Ether a dynamic monetary structure that can respond to changing network usage.

General-purpose technology

Ethereum delivers a general-purpose framework for smart contracts, so developers can design thousands of use cases without building a chain from scratch. This universal approach means applications can interoperate through composable code. For example, a DeFi protocol can call an NFT marketplace or stablecoin in one transaction. Since every dApp shares a security model, new projects can plug into existing liquidity or user communities.

Early Adoption

Because Ethereum was among the first to offer smart contracts, it swiftly captured both attention and investment from developers and businesses looking to expand beyond simple currency transactions. This early lead fostered a vibrant infrastructure of coding libraries, dApps, and community resources unmatched by later entrants. Over time, the ecosystem solidified as more teams launched their projects on Ethereum, leveraging its open-source tooling and liquidity. The introduction of an ETH ETF in the United States, underscore institutional confidence in Ethereum’s longevity. 

Staking

With Ethereum’s transition to proof-of-stake, holders can stake ETH to help secure the network and validate transactions. In return, they receive rewards calculated from newly minted Ether and transaction fees. This approach shifts focus from energy-intensive mining to a model where ownership of ETH contributes directly to network stability. Staking also aligns token holders with the long-term health of Ethereum, since the protocol’s security and governance hinge on their continued participation. As the ecosystem broadens, participants view staking not only as a source of passive income but also as a way to strengthen the chain’s foundational security. 

Conclusion: The Future of Ethereum

Ethereum stands at the forefront of blockchain innovation, thanks to its flexible platform, established developer community, and deep liquidity in DeFi. Recent transitions, such as proof of stake, have lowered energy usage and paved the way for ongoing scaling initiatives like sharding. These improvements aim to attract mass-market users and reduce bottlenecks, ensuring that Ethereum can accommodate rising demand.

Political interest is also shifting, with President Trump’s pro-crypto leanings possibly opening the door to institutional investment in Ether and other tokens. Speculation regarding potential federal or state reserves in BTC and Ethereum might also spark a new wave of mainstream confidence.

As Ethereum continues refining its roadmap, it stands poised to expand beyond DeFi and NFTs into broader domains, from gaming to cross-border finance. Its adaptability and strong track record suggest it will remain a pivotal force in the global crypto ecosystem.

FAQs

What’s the difference between Ethereum, Ether, and ETH?

Ethereum is the blockchain network that can execute smart contracts, while Ether (ETH) is the native currency used to pay transaction fees. You can use Ether and ETH interchangeably.

How Much Is One Ethereum Coin Worth?

As of the time of writing, Feb 6, 2025, ETH is priced at about $2700 and is down about 3% for the day. You can get real-time stats from major exchanges like Coinbase or Kraken.

What is an Ethereum smart contract?

An Ethereum smart contract is self-executing code stored on the blockchain. Once deployed, it runs automatically under predefined rules, allowing decentralized apps to function without centralized oversight.

When did Ethereum start?

Ethereum’s first mainnet version, Frontier, launched on July 30, 2015. Development began earlier, funded by a crowdfunding effort in 2014 after Vitalik Buterin introduced the idea in late 2013.

What is an Ethereum transaction?

An Ethereum transaction transfers Ether or calls a smart contract function. It includes the sender account address, recipient address, and data or values. Validators confirm each transaction and append it to the blockchain.

The post What Is Ethereum and How Does It Work? appeared first on NFT Evening.

A well-crafted digital currency can enhance brand visibility with digital money or serve as the backbone of decentralized applications. On the other hand, a poorly structured crypto project might struggle to attract users or remain compliant with legal requirements. This guide examines several approaches to building your own cryptocurrency, from creating a new blockchain to piggybacking on existing chains like Ethereum or BNB Chain. By understanding the basic methods, you can decide which route aligns with your technical expertise, budget, and strategic goals.

3 Methods to Create a Cryptocurrency

Launching your very own blockchain or cryptocurrency project can happen through multiple paths, each with its own technological and logistical demands. The most common approaches include building a blockchain from scratch, forking or modifying an existing chain, or issuing a token on a well-established platform. Let’s dig into each one of these a bit deeper.

1. Create a New Blockchain and Native Cryptocurrency

When you opt to create a new crypto coin on a standalone blockchain, you gain ultimate control over consensus algorithms, transaction limits, and network parameters. This approach can be rewarding if your project requires extensive customization.

For example, platforms like Solana or Sui offer development environments that allow quick token creation with built-in throughput optimizations, but if you want even deeper adjustments—like changing block intervals or rewriting key cryptographic functions—you may need to script everything from the ground up. By designing a fully original chain, you can support novel features. Perhaps you need specialized transaction types, or you want to adopt an unconventional staking model.

However, building a blockchain is complex and resource-intensive. You must assemble a development team with expertise in blockchain architecture, establish node infrastructure to process transactions, and promote the chain to attract validators and user applications. Successful blockchains like Ethereum or Solana are backed by large communities and top-tier developers, so launching a new chain often requires significant time, money, and marketing to stand out in a competitive environment.

2. Modify an Existing Blockchain

Another strategy is to fork or modify an open-source blockchain, such as a variant of Bitcoin or a forked version of an Ethereum-based sidechain. This approach retains much of the underlying code but allows you to fine-tune parameters, add or remove consensus features, and implement custom economic rules.

A classic example is Bitcoin Cash, which forked from Bitcoin to adjust block size and promote faster transactions. Forking an existing chain can cut down development overhead by leveraging tested code. It also potentially inherits the original network’s security model or known best practices.

Keep in mind, though, that a network fork may not carry over the user or validator base of the original chain. You will still need to cultivate your own community and node operators. Moreover, ensuring compatibility with upstream updates can be a challenge, as you must maintain and merge changes to remain current.

3. Create a Token on an Existing Blockchain

Issuing a token on existing blockchain infrastructure like Ethereum or BNB Chain is the most accessible route for many entrepreneurs. Under this model, you tap into a network’s existing blockchain platform and security. With Ethereum’s ERC-20 or ERC-721 (NFT) standards, for instance, you can define your token supply, name, and symbol in a straightforward smart contract.

Some platforms even moderate-level coders to deploy basic contracts in minutes. On the Binance Smart Chain, you’ll find similar standards (BEP-20, for example), often with lower transaction fees than Ethereum. This route often suits projects with minimal technical staff, since the underlying blockchain handles consensus and node management.

That said, these tokens can face fierce competition, especially if your concept overlaps with similar blockchain projects elsewhere. Many new tokens rely on decentralized exchanges (Uniswap, PancakeSwap) for listing and liquidity, so you must plan how to entice participants to hold or trade your asset. Whether you aim for a governance token or utility coin, focusing on robust tokenomics and community engagement can separate you from the countless other tokens launched on popular networks.

How to Create a Cryptocurrency: Step-by-Step

This detailed walkthrough helps you transform your concept into a functioning crypto project with just a few clicks. Whether you plan on building a brand-new chain or issuing a token on an existing blockchain network, having a plan can save you time and aggravation.

Step 1: Define Your Purpose

Determine why your project needs a cryptocurrency or its own token. Are you fostering community engagement, enabling governance, or facilitating payments via cryptocurrency transactions in a decentralized app? Clearly articulating these objectives will shape tokenomics, supply, and user incentives.

For example, some tokens serve as rewards within a gaming ecosystem, while others act as governance stakes that let holders vote on protocol upgrades. Writing a succinct project manifesto ensures your team remains aligned on goals and clarifies the token’s role for potential investors or community members.

Step 2: Choose a Consensus Mechanism

Select the algorithm your network will use to validate transactions and maintain security. Common options include Proof of Work (PoW) like Bitcoin’s system, Proof of Stake (PoS) like Ethereum, or even less-known methods like Delegated Proof of Stake (DPoS). Each approach influences node requirements, environmental impact, and transaction throughput. Weigh these trade-offs against your project’s intended scale and philosophy.

Step 3: Choose a Blockchain Platform

Decide whether you will build everything from scratch or issue tokens on established platforms like Ethereum, BNB Chain, or Polkadot. Each network offers unique benefits.

Ethereum remains a popular choice for advanced smart contract capabilities, though gas fees can be high at busy times. BNB Chain boasts lower costs and simpler token deployment. Polkadot provides cross-chain features and the chance to customize parachains.

If you are constructing a full blockchain, you will craft your own environment, but this requires more technical knowledge, expertise, and node infrastructure.

Step 4: Create the Nodes

If you opt for a custom chain, establishing nodes becomes crucial. Nodes are servers (or machines) that host your blockchain’s data, process transactions, and secure the network. You can start by setting up one or two “seed” nodes to test block production and sync processes, then scale with more nodes distributed geographically for resilience. Ensure your node software is stable, able to handle transaction loads, and updated regularly. If you create a token on an existing platform, the node layer is maintained by that platform’s broader community.

Step 4: Design the Internal Architecture of Blockchain

Specify how blocks are formed, how transactions are grouped, and whether your chain uses specialized data structures. This includes defining block intervals, block size limits, or transaction validation rules.

Then, decide how you will handle features like multi-signature wallets or advanced scripting. For instance, some chains permit custom script modules for decentralized apps.

An efficient architecture bolsters network security and lowers transaction costs. Testing these parameters thoroughly on a private or testnet environment can reveal performance bottlenecks early in development.

Step 6: Integrate APIs & Wallets

User-friendly APIs enable external applications and services to interact with your chain. These might involve REST endpoints or WebSockets where a blockchain developer retrieves account balances, broadcasts new transactions, and queries blockchain data.

At the same time, ensure that wallets built for your token or chain are straightforward for holders. Light wallets or browser extensions can lower onboarding barriers for newcomers. If you rely on established ecosystems like Ethereum, standard tools such as MetaMask or hardware wallets can quickly gain traction with minimal custom coding.

Step 7: Design User Interface and Experience

While the backend is vital, the front-end design often decides whether people embrace your crypto solution. If you are launching a blockchain-based game or payment platform, an intuitive user interface demystifies the process for non-technical users.

Clear labels, integrated help screens, and straightforward navigation build trust and reduce friction. Keep sign-up steps minimal and highlight how blockchain transactions or balances update in real time. A polished UI can set your project apart in a market where many solutions feel complicated, boosting adoption and long-term loyalty.

Legal and Regulatory Considerations to Understand

Creating a cryptocurrency may place you under various legal considerations, depending on the nature of your token and its intended distribution. If your coin mimics securities—raising funds with the promise of returns—it could be labeled a financial instrument requiring compliance with securities regulations.

In many jurisdictions, anti-money laundering (AML) and know-your-customer (KYC) rules also apply. For instance, if you offer token sales to retail investors worldwide, you might need to follow local laws in each country where potential buyers reside.

Tax implications add another layer of complexity. Some regions tax newly minted tokens as income, while others consider them intangible assets or intangible property. On top of that, you need to be mindful of property transfer or capital gains laws that might trigger once the token launches or is listed on centralized exchanges. Working with a specialized attorney who knows both corporate and crypto law can help you steer clear of major pitfalls.

Also, be sure to keep an eye on evolving cryptocurrency regulations. Countries frequently update their stances on digital assets, imposing new requirements or banning certain activities altogether. By monitoring official guidance, you reduce the risk of sudden disruptions to your roadmap. Observing best practices—like thorough documentation, disclaimers, and transparent tokenomics—demonstrates that your project aims to follow relevant laws, thus reassuring partners, investors, and community participants.

Promoting and Marketing the Cryptocurrency

Building a robust crypto asset is just the first part of the journey; without strategic promotion, even a technically sound project can languish. Begin by establishing a compelling brand narrative.

Highlight what problem your coin solves or how it improves on existing market options. Leverage social media platforms, especially Twitter, Telegram, and Discord, to engage supporters directly. Host AMA (ask-me-anything) sessions, organize giveaway events, or employ referral campaigns to reach beyond your initial audience.

Cultivate real-world partnerships if applicable. For example, if your token focuses on decentralized finance, collaborating with an upcoming DeFi protocol or a recognized aggregator can extend your reach. Generate credibility by sharing frequent development updates, ideally with consistent testnet results or demos.

Finally, think about listing your cryptocurrency token on decentralized exchanges for immediate community-driven trading or pursuing a formal listing on mid-tier centralized exchanges if budget and regulatory conditions allow. A polished marketing push can distinguish your project amid fierce competition.

Pros and Cons of Making a Cryptocurrency

Pros

• Brand Visibility: Creating a coin can boost recognition for your project or business.
• Control & Innovation: You get to define the blockchain’s features, tokenomics, and governance.
• Community Engagement: Giving users direct involvement through tokens can foster loyalty.
• Financial Gains: Early adopters or founding teams might profit if demand rises.

Cons

• Complex Regulation: Navigating global and local laws can be tough, and noncompliance brings legal risks.
• High Development Costs: Audits, infrastructure, and a skilled team can add up quickly.
• Market Saturation: Standing out among thousands of new tokens is challenging.
• Security Risks: A single contract flaw or network attack can undermine credibility and cause financial losses.

Conclusion

Deciding how to create a cryptocurrency is a multi-faceted endeavor demanding clarity of purpose, technical expertise, and compliance strategies. Though the challenges may seem steep, a well-planned launch can yield unique user engagement and distinctive real-world impact.

By researching consensus models, selecting the right blockchain platform, and promoting a compelling narrative, you stand a far better chance at establishing a sustainable digital asset.

FAQs

Can I create my own cryptocurrency?

Yes. Many tools and platforms, like Ethereum’s ERC-20 or BNB Chain’s BEP-20, let you create cryptocurrency and deploy tokens without deep coding. For a custom blockchain, you’ll need more advanced programming.

How much does it cost to create a cryptocurrency?

Costs vary from a few hundred dollars for a simple token to thousands or even millions if you’re building a new chain, hiring developers, and undergoing security audits.

Is it legal to create a cryptocurrency?

It can be legal, provided your cryptocurrency complies with relevant laws on securities, money laundering, and consumer protection. Consult legal professionals to understand your region’s regulatory scope.

Who can create a cryptocurrency?

Anyone with the necessary technical know-how or access to user-friendly token creation tools can do it. However, succeeding requires proper planning, secure source code, and marketing strategies.

Can you make $1000 a month with crypto?

It’s certainly a possibility. Your exact profits would depend heavily on things like market conditions, trading strategies, and the appeal of your new coin. Many projects fail to gain traction, so thorough research and risk management are essential.

The post How to Create a Cryptocurrency: Your Step-by-Step Guide appeared first on NFT Evening.

Understanding whether an asset is a coin or a token helps you gauge its potential value, flexibility, and risk profile. In this article, we’ll clarify what each term means, break down the key advantages and types, and compare them in a head-to-head look at their structural and functional contrasts. Knowing the difference between coins and tokens can guide you when evaluating market opportunities or deciding which assets fit your needs, whether you’re looking to pay transaction fees, fuel decentralized applications, or represent a piece of real-world value.

What is a Coin?

A coin in the crypto world is typically a digital currency with its own dedicated blockchain. Bitcoin is the most notable example, operating on the Bitcoin blockchain with a well-defined process for creating and validating new blocks. Other well-known coins include Ethereum, Litecoin, and Bitcoin Cash. These, and other digital assets often serve as the primary medium of exchange or store of value within their respective ecosystems and can also be used to pay transaction fees, just like physical coins.

Benefits of Coin

• Native Blockchain Control: When a coin runs on its own network, developers and the community have more freedom to guide updates, manage transaction speeds, and shape governance rules.
• Security: Coins often draw large mining or staking communities, helping to secure the entire system against attacks or manipulation.
• Established Brand: Leading coins like Bitcoin have a track record, recognized by traders and institutions worldwide. This brand recognition can create more trust and liquidity.

Types of coins

Payment Coins

Bitcoin and Litecoin function primarily as mediums of exchange and digital money, facilitating everyday transactions or cross-border transfers.

Privacy Coins

Assets such as Monero or Zcash are crypto coins that incorporate special privacy features that mask transaction details, appealing to individuals who prioritize anonymity.

Stablecoins

Pegged to external references, such as a fiat currency like the U.S. dollar, stablecoins reduce volatility. Examples include USDC or DAI, vital for traders seeking quick, stable conversions in crypto markets.

Popular Coins

• Bitcoin (BTC): The Bitcoin blockchain is the original cryptocurrency, known for its decentralized nature and limited supply.

• Ethereum (ETH): Although Ethereum is evolving into a platform for tokens and smart contracts, ETH remains its core coin, paying for gas fees.

• Bitcoin Cash (BCH): A result of a Bitcoin fork aimed at larger block sizes and faster transactions. It shares Bitcoin’s ethos but pursues greater scalability.

• Litecoin (LTC): Created as a faster, lighter version of Bitcoin, often seen as a testbed for new virtual currency features.

• Other Popular Coins: Additional networks like Ripple’s XRP or Tron’s TRX are also considered cryptocurrency coins, each intending to tackle unique challenges in global payments or application development.

What Is a Token?

A token is a digital asset created on an existing blockchain network rather than requiring its own dedicated network. Unlike a coin, which typically operates as the primary currency of a chain, a token can represent nearly anything: from utility or governance rights to physical assets or even digital art. Tokens rely on the underlying blockchain’s security and consensus mechanisms, meaning they inherit certain benefits (like network stability or speed) but must adhere to the host blockchain platform protocol’s technical parameters. This model allows for quick deployment of new projects, lower development overhead, and more versatility in how assets and services are offered.

Benefits of tokens

• Fast Deployment: Creating crypto tokens is more straightforward than building an entire blockchain from scratch. Developers can use established platforms (like Ethereum) to launch tokens within hours.
• Wider Adoption: Tokens tap into robust, existing communities and developer ecosystems. They can immediately benefit from wallets, decentralized exchanges, and other infrastructure already designed for that blockchain.
• Flexible Use Cases: Tokens can embody anything from share-like security tokens to specialized utility tokens for dApps. The diverse range of functionalities fuels constant innovation.
• Shared Security: Since cryptocurrency tokens rely on a proven network’s consensus, they don’t need separate miners or validators, which can reduce overall security risks and overhead.

Types of tokens

Utility Tokens

Provide access or features within a particular ecosystem. For instance, a gaming dApp might issue a token that lets players buy virtual items.

Security Tokens

These token transactions digitally represent ownership in real-world financial instruments such as stocks or bonds, subjecting them to stricter regulatory frameworks.

Governance Tokens

Tokens issued for governance grant holders the right to vote on protocol changes, funding proposals, or developmental priorities. They shape decentralized projects without a central authority.

Non-Fungible Tokens (NFTs)

Unique tokens that represent singular assets like digital art, collectibles, or in-game items. Each NFT has distinct metadata making it non-interchangeable.

Popular Tokens

• Chainlink (LINK): A leading oracle token bridging off-chain data (like price feeds) with on-chain smart contracts, vital for DeFi protocols seeking reliable information.

• Uniswap (UNI): Issued by the popular decentralized exchange, UNI grants governance power over protocol fee structures and upgrades. UNI holders can also propose new features or community grants.

• ApeCoin (APE): A governance and utility token tied to the broader Bored Ape Yacht Club ecosystem, used for voting, exclusive events, and certain digital marketplaces.

• SushiSwap (SUSHI): A DeFi token awarding holders a share of swap fees on the SushiSwap DEX, balancing utility with partial governance rights over treasury decisions.

Coins vs Tokens: The Main Differences

Structure

Coins have their own native blockchain and run independently, and process transactions through their underlying consensus mechanism. In contrast, tokens rely on an existing chain, such as the Ethereum network, for their ledger and security.

This means coins often require more extensive development and upkeep—like maintaining miners or validators—while tokens use established infrastructure to launch faster with lower costs.

Because tokens share a host chain’s storage and validation, they do not need an exclusive node network. Instead, they inherit the resilience of whichever protocol underlies them.

Purpose

Coins typically serve as a primary medium of exchange, paying transaction fees or rewarding block validators. Their main function might be digital currency (like Bitcoin) or fueling the blockchain’s operations (like Ether on Ethereum).

Tokens, however, take on multiple roles: some represent governance privileges, others reflect staking or yield in DeFi, and still others operate as stable units tied to external assets. While coin usage often focuses on payments or collateral, buying tokens can unlock specialized features—like getting special or limited in-game items or managing voting rights.

Decentralization

A coin’s decentralization level depends on its network’s size, the distribution of validators or miners, and whether a small group controls development. Bitcoin’s widely dispersed mining activities exemplify strong decentralization, while certain smaller coin projects are more centralized in practice.

Tokens exist on top of these blockchains, so their decentralization depends partly on the host chain and partly on how the token’s smart contract is governed. If a single project team manages most of the token supply or upgrading rights, then it may lead to reduced decentralization for that token’s ecosystem.

Interoperability

Coins often stay confined to their own chain unless wrapped or bridged to other networks.

For instance, “wrapped Bitcoin” (WBTC) uses Ethereum-based tokens to represent BTC in DeFi. Tokens, by design, frequently plug into the host chain’s broader ecosystem. If a token is ERC-20 on Ethereum, it can interact with any dApp, wallet, or layer-2 solution that supports that standard.

This flexibility fosters synergy across DeFi platforms, DEXs, and NFT marketplaces. Still, cross-chain interoperability can grow complicated if tokens span multiple networks.

Use case

Coins provide simple payment methods, store-of-value functions, or blockchain fuel (like gas on Ethereum). Their limited supply or core usage can drive market demand, especially as network activity intensifies.

Tokens serve distinct roles within an app’s or protocol’s micro-economy, governance tokens can dictate upgrades, while utility tokens let holders stake, access premium features, or earn fees.

Each approach suits different ends: coins often emphasize global transactions or robust store-of-value narratives, whereas tokens cover niche expansions like gaming, social media, or specialized DeFi frameworks on top of an existing blockchain.

Conclusion

Having a solid, working knowledge of the differences between a coin on its own blockchain and a token built on an existing network is critical for any crypto enthusiast. Coins frequently serve as digital currencies or gas for their blockchain’s operations, while tokens often power specialized utilities, governance, or application-specific features.

Before making investment decisions, ensure you’ve considered each asset’s underlying network security, practicality, and user adoption. By understanding this distinction in the coin vs. token conversation, you’ll navigate the dynamic crypto landscape more confidently and spot the opportunities that best fit your long-term investment goals.

The post Coin vs Token: What are the Key Differences? appeared first on NFT Evening.

So, how these digital assets are different from the bitcoin blockchain platform, and what exactly altcoins offer. Let’s find out!

What are Altcoins?

Altcoins, short for “Alternative coins,” typically refer to every digital currency or token that is not Bitcoin. Since Bitcoin’s launch, developers have tried to improve certain aspects or create entirely new functionalities by forking existing chains or building fresh networks.

Early altcoins like Litecoin or Namecoin focused on addressing specific Bitcoin limitations, such as processing speed or domain registry. Over time, the altcoin market has branched out significantly, resulting in thousands of crypto projects offering widely varied use cases.

Several altcoins emerged to facilitate transactions at lower fees or with faster confirmation times. Others incorporate advanced features like smart contracts, a hallmark of Ethereum, the network of the second largest cryptocurrency. Ethereum launched in 2015 and proved to be a massive revolution for crypto, since it pioneered the entire concept of smart contracts, which are programmable, self-executing agreements on the blockchain. This breakthrough rapidly positioned Ethereum as a central hub for decentralized finance and other cutting edge crypto applications.

Today, Ethereum’s vast ecosystem hosts thousands of tokens and dApps, ranging from meme coins to high-profile digital art marketplaces. Moreover, Ethereum’s transition to proof of stake in 2024 underscored its agility, reducing energy usage and preparing it for future scalability solutions. With a highly active developer base, robust infrastructure, and wide institutional interest, Ethereum holds a foundational role in the crypto landscape and serving as a bellwether for far broader market sentiment.

Meanwhile, stablecoins came about to maintain a steady value tied to a traditional asset such as the US dollar, bringing relative stability in a market known for volatility. These innovations illustrate how altcoins offer a range of approaches to solving different problems in finance, logistics, gaming, and more.

Some altcoins seek to challenge Bitcoin’s perceived limitations, such as energy efficiency, transaction throughput, or additional privacy settings. Others position themselves as “app coins” or “utility tokens,” fueling specific blockchain-based platforms. This diversity explains why altcoin ecosystems can grow and adapt faster than a more established project like Bitcoin.

However, that same diversity also opens the door to potential scams, vaporware, or oversold ideas. When exploring altcoins, keep in mind that each project’s success largely depends on its development team, roadmap execution, and real-world adoption. By doing so, you can better separate meaningful innovations from short-lived hype in the rapidly shifting cryptocurrency space.

Types of Altcoins and Their Use Cases

Altcoins come in many shapes and sizes, each aiming to solve specific challenges or offer unique features beyond what Bitcoin provides. Here are some common categories of alternative coins, as well as some real-world examples of how they function in the cryptocurrency market.

Payment Token

Payment tokens strive to facilitate transactions more efficiently than Bitcoin, often claiming faster transaction speeds or lower fees. One classic example is Litecoin, which forked from Bitcoin’s codebase but uses a different hashing algorithm and aims for quicker block times. Similarly, Bitcoin Cash split off from Bitcoin to increase block size, theoretically supporting more transactions per block.

These tokens serve as decentralized digital currency, letting users pay for goods or transfer value peer-to-peer without a central authority to validate transactions. Despite competing with Bitcoin’s established brand, payment-focused altcoins often tout speed, convenience, and cheaper transactions, especially in cross-border scenarios where traditional remittance services are slow or expensive.

Stablecoins

Stablecoins emerged to address crypto’s notorious volatility by pegging their value to a more stable asset like fiat currencies or precious metals. Tether (USDT) and USD Coin (USDC) are two popular altcoins in this category, maintaining (in theory) a 1:1 ratio with the U.S. dollar.

The idea is to provide traders with a safe haven during sharp market swings without leaving the crypto ecosystem. Stablecoins also ease real-world usage, offering a digital medium of exchange with predictable value. Some stablecoins rely on fiat reserves, while others use algorithmic strategies that burn or mint tokens to maintain a stable value.

Stablecoins play a pivotal role in the wider cryptocurrency market, offering a bridge between fiat currencies and digital assets. By pegging their value to stable assets, often major national currencies like the U.S. dollar or even to precious metals like gold or silver, these coins enable crypto traders to hedge against market volatility without completely exiting the crypto ecosystem. For example, when the prices of highly volatile altcoins spike or tumble, investors can quickly move funds into stablecoins to lock in gains or mitigate losses.

Beyond trading, stablecoins provide accessibility and financial inclusion in regions where local currencies can be unstable. By converting local currency into a dollar-pegged stablecoin, users gain a measure of price stability and the ability to transact in global markets. This mechanism can also lubricate liquidity across decentralized exchanges: traders can trade altcoins against stablecoins rather than converting to fiat every time.

GameFi Tokens

GameFi or Play-to-earn tokens power blockchain-based games or virtual worlds, rewarding players for in-game achievements and allowing them to convert gaming progress into tangible digital assets.

Projects like Axie Infinity’s AXS or Gala Games’ GALA exemplify this approach, where gamers earn tokens by completing quests, battling other players, or contributing to the game’s ecosystem. These tokens can be traded on exchanges for other cryptocurrencies or fiat, bridging entertainment and real-world economic value.

While critics caution about potential oversaturation and speculation, enthusiasts see these altcoins as catalysts for broader adoption, transforming hobbyist activities into viable revenue streams and fueling the evolution of decentralized finance within gaming universes.

In 2025, two of the bigger GameFi tokens to keep an eye on are $PIXEL and $SAND. Building on the Pixels.xyz platform, $PIXEL fuels an open-ended world blending farming, exploration, and social engagement. Every action and skill progression is backed by blockchain ownership, rewarding players with genuine digital property and tokens for their in-game accomplishments. The Pixels team is intent on bringing millions of gamers into web3 by focusing on accessible mechanics, from skill leveling to guild participation. Developers also seek to expand the concept of on-chain reputation and user personas, hinting at a robust social-Fi ecosystem.

The SAND token anchors The Sandbox metaverse, an Ethereum-based realm where players create voxelized content and monetize virtual real estate known as LAND. This user-generated approach fosters a robust economy of player-made assets, from 3D art to fully developed mini-games. SAND powers these in-game transactions, staking rewards, and DAO-style governance, letting token holders vote on future features or developments. Its ERC-20 structure integrates with The Sandbox’s broader NFT marketplace and Game Maker tool, allowing creators to earn from their original digital items.

Security Tokens

Security tokens represent ownership in a real-world asset or company, carrying rights similar to stocks, bonds, or other financial instruments. Unlike other altcoins that focus on utility or payment, security tokens must comply with stricter regulations, especially if they grant holders dividends or partial ownership.

For instance, a tokenized real estate project might issue security tokens entitling investors to a portion of rental income. By leveraging blockchain’s transparency, these tokens can streamline processes like KYC checks or fractional ownership, making traditionally illiquid markets more accessible.

That said, the regulatory burden often slows development, and offerings must carefully adhere to securities laws. Nonetheless, security tokens point toward a future of tokenized equity and fully digital capital markets.

Utility Tokens

Utility tokens provide access, functions, or privileges within a specific blockchain platform or decentralized application. Ethereum’s native ETH, while also viewed as a coin, doubles as a utility token for paying gas fees on the Ethereum network, fueling smart contracts and other dApps.

Other examples include Chainlink (LINK), which is used to pay node operators supplying off-chain data to on-chain protocols, and Basic Attention Token (BAT), which rewards users for viewing ads in the Brave browser.

Various altcoins offer specialized “keys” to features in a digital ecosystem. Their market value hinges on genuine usage: Demand may drive up token altcoin prices, as more users rely on these utilities, reflecting their importance in the underlying technology.

Meme Coins

Meme coins epitomize the viral, community-driven side of crypto, often launched with playful branding and minimal fundamental utility. Dogecoin, the first major meme coin, gained an enormous following thanks to internet culture’s enthusiasm. Others, like Shiba Inu, soared on viral marketing and speculation. Though typically high-risk, these tokens provide an intriguing lens on how collective sentiment can drive substantial market cap gains overnight.

Because meme coins rely heavily on community hype and continuous social media presence, they can endure extreme price volatility. Some projects gradually add functionalities or philanthropic goals, but success usually rests on sustained community engagement more than any underlying blockchain technology or upgrade.

Governance Tokens

Governance tokens empower holders to vote on protocol changes, adjusting fees, or treasury allocations in a decentralized project. Typical examples include Uniswap’s UNI or MakerDAO’s MKR.

By distributing decision-making authority among a broad user base, governance tokens aim to maintain transparency and resist centralized control. For instance, UNI holders debate matters like liquidity mining incentives or the introduction of new trading pairs.

Governance can extend to wide-ranging proposals, letting the community shape the altcoin’s roadmap. While some governance tokens offer added perks like staking or partial fee distribution, their main appeal is letting users actively participate in a project’s trajectory, boosting a sense of ownership and loyalty.

Pros and Cons of Altcoins

Altcoins open the door to new possibilities in the cryptocurrency market, but they also carry unique risks. Here’s a quick explanation of both the pros and cons of altcoins.

Pros

Many altcoins offer faster transaction speeds and lower fees than Bitcoin. This is appealing to users who want quick payments or cheaper smart contract execution. Thanks to specialized consensus mechanisms, these networks might achieve higher throughput, making them more suitable for day-to-day transactions.

On top of that, altcoins can introduce advanced features or niche functionalities. For example, certain altcoins focus on privacy, while others emphasize interoperable ecosystems or specialized applications like supply chain management. This diversity breeds innovation and fosters healthy competition within the cryptocurrency and blockchain ecosystem itself.

Altcoins may also provide a hedge if Bitcoin faces technical or regulatory challenges. By spreading investments across multiple coins, some individuals hope to capture potential gains in emerging sectors such as decentralized finance or NFTs.

Not only that, but smaller altcoins occasionally see meteoric rises, driven by developer milestones or intense community enthusiasm. While this can be speculative, it might yield substantial returns for early adopters who pick promising projects.

Cons 

Altcoins come with higher volatility and uncertain market demand, often relying on smaller communities and limited liquidity. Newer projects may see massive price swings or fade away if developers lose interest or fail to deliver on roadmaps. The altcoin space contains many low-quality offerings, or “rug pulls,” that take advantage of hype without genuine value. Thorough research is necessary to avoid these pitfalls.

Regulatory climates remain fluid for altcoins. Tokens like security coins face extra compliance hurdles, and the project’s management must keep pace with local and international laws. This complexity can hamper adoption or restrict certain altcoins from reaching mainstream users. Another major challenge is the network effect that favors Bitcoin and Ethereum.

While altcoins can innovate, they may struggle to match the brand recognition or widespread developer support enjoyed by major coins. Overall, the whole altcoin investment environment demands vigilance: profits can be high but come with greater risk, limited track records, and potential vulnerabilities to market sentiment swings.

How to Decide What Cryptocurrency to Invest in

Evaluating an altcoin among the sea of digital assets can be daunting. By focusing on critical factors like project fundamentals, liquidity, and transparent development, you increase your odds of finding worthwhile investments instead of betting purely on hype. Let’s look at a few things you should consider before getting into any particular altcoin.

Whitepaper

A white paper explains a project’s technical design, motivation, and problem-solving approach. Reviewing it provides insight into how a coin or token aims to stand out in the cryptocurrency landscape.

Look for specific use cases rather than vague promises. Assess whether the team offers a plausible roadmap, realistic timelines, and testable features. Projects with thorough plans, open-source development, and active contributor communities typically inspire more confidence.

If the paper lacks clarity or is overly promotional, that can signal weak fundamentals. Spending time dissecting white papers can prevent you from backing tokens with little more than marketing fluff.

Liquidity

Liquidity is vital for seamless trading and stable price discovery. Coins or tokens listed on major exchanges tend to have higher volume, meaning transactions can happen with minimal slippage. Thinly traded altcoins can see substantial price fluctuations even with modest buy or sell orders.

Evaluate daily volumes, the number of trading pairs, and whether the token appears on multiple reputable platforms. Checking aggregator tools or DEX analytics reveals how easily you can enter or exit positions. Low-liquidity projects might tempt speculators with sharper pump-and-dump cycles, but they also run higher risks of abrupt crashes and difficulty in finding buyers.

Additional Considerations

Along with the white paper and liquidity, assess team credentials and development progress. An altcoin’s website should disclose core contributors, explaining their backgrounds and prior achievements.

Join official community channels like Discord or Telegram to gauge user sentiment, progress updates, and dev interactions. A responsive, transparent team typically indicates a healthier project. Getting a glimpse of a project’s backers can shed light on its financial security and long-term prospects, and prominent investors often bring credibility, resources, and strategic guidance. 

Teams with proven track records or well-known affiliations signal an ability to navigate challenges and form meaningful alliances. When both the core development group and influential backers align behind a vision, it instills greater confidence that the project can actually do what it’s setting out to do..

Monitor the consensus mechanism (proof of stake, proof of work, or others) as it can affect energy usage, security, and incentives. Pay attention to token distribution, watch for whales holding large portions, and see whether the community has governance or voting rights.

Finally, weigh how the altcoin’s core features align with your personal investment goals. Some investors prioritize stable growth in established ecosystems, while others seek early-stage tokens offering higher risk-and-reward potential.

Conclusion: The Future of Altcoins

Altcoins are a dynamic force within the broader cryptocurrency space, offering new solutions, faster transaction confirmations, and specialized applications. Over time, many altcoins will evolve or fade away, reflecting the industry’s natural cycle of innovation and consolidation. Institutions and mainstream investors increasingly explore certain altcoins for diversification and cutting-edge features like decentralized finance or NFTs.

As blockchains grow more interoperable, altcoins could integrate more easily into daily finance. Still, the market remains highly competitive and volatile. For those not averse to research and risk, altcoins represent massive potential opportunities.

FAQs

What Altcoin Will Explode in 2025?

Look at real-world use cases, developer activity, and community engagement. Strong fundamentals typically point to better prospects for sustained growth. Some solid candidates that are currently sub-$1 include The Graph (GRT), Tron (TRX), and Shiba Inu (SHIB).

Where can I buy altcoins?

Major centralized exchanges like Binance, Coinbase, and Kraken list many altcoins. Decentralized exchanges, like Uniswap or PancakeSwap, also support a large variety of lesser-known tokens.

To learn more about which exchange is the best for buying altcoins, check out our review of best altcoin exchanges and trading platforms.

What is the top altcoin by market cap today?

As of January 14th, 2025, Ether ($ETH)  is the top altcoin, with a market capitalization of $387.9 billion.

How many altcoins are there?

Thousands of altcoins exist, with varying degrees of adoption and credibility. New ones appear regularly, while others lose steam, reflecting the crypto market’s rapid evolution. That’s why filtering is extremely crucial for retailers when joining the crypto market nowadays.

Are Altcoins any different from Bitcoin?

Although all are some form of digital currency, altcoins typically use new features or consensus mechanisms beyond Bitcoin’s design. They may target different niches, focus on faster speeds, or introduce smart contracts and governance.

The post What are Altcoins? Getting Started with Alternative Coins appeared first on NFT Evening.

What is APR?

APR, or Annual Percentage Rate, is the amount it costs to borrow money over a year. In crypto, it’s commonly used for loans or staking rewards. It’s just the interest rate alone, but it doesn’t factor compounding into APR.

For instance, if you borrow a crypto loan of $1,000 with a 10% APR, you will have to pay $100 in interest after one year. That is without additional fees or compounding.

In DeFi, APR often gets applied to borrowing or lending tokens. If you’re lending out stablecoin with an APR of 5%, in a year’s time, that’s 5% of principal. But remember, APR does not consider how often you get paid or how reinvesting those payments can grow your returns.

What affects your APR?

Many things can determine your APR, for example:

• Credit Score: If you have a good credit score, you’ll get a low APR, but if you have a bad credit score, you might get a high APR.
• Loan Type: Various loans carry different APRs. For instance, a mortgage will have a lower APR compared to a credit card.
• Lender: For the same type of loan, various banks or lenders may provide different APRs.
• Loan amount and term: The amount you borrow and how long you take to repay it can change the APR. So, shorter loans may have lower APRs.
• Market Rates: If interest rates in the economy increase, your APR may increase.
• Down Payment: The more significant the down payment, the better the APR given by the lender.

APR vs. Interest rate

APR and interest rates are similar but not the same. The interest rate is the base rate, while APR includes fees. For example, if you take a crypto loan with a 5% interest rate and a 2% platform fee, the APR becomes 7%. APR helps borrowers understand the total cost of borrowing.

What is APY?

APY, or Annual Percentage Yield, will measure how much you earn on your savings or investment, with the compounding interest. Compounding occurs when the interest you are earning is added to your original amount and then that total earns interest on it. In crypto, compounding may happen daily, weekly, or monthly depending on a given platform.

For example, if you deposited $1,000 in cryptocurrency into a savings account with a 5% APY, compounded monthly, you’ll earn a bit above $50 for a year. This is because every month, your earnings are added to your balance, raising the amount that future interest gets computed on. 

APY vs. interest rate

The interest rate only reflects the simple annual return, whereas APY takes into account compounding. For instance, a 10% APY with monthly compounding will be slightly higher than a 10% annual interest rate. That is why APY is more useful for understanding actual returns.

APR vs. APY: What is the difference?

Example

Here’s an example to understand the difference between APR and APY:

• Borrowing: If you take a $1,000 crypto loan at a 12% APR, you’ll owe $120 in interest after a year. However, if compounding is applied monthly, and the rate is expressed as APY, your total cost could be closer to $126.
• Saving: If you deposit $5,000 in a staking pool offering a 12% APY with monthly compounding, your returns will exceed $600 due to the added effect of compounding.

The Borrower’s Perspective

The annual percentage rate (APR) is the most important figure to pay attention to when borrowing. It’s the figure that lets you see what the average baseline cost of a loan is. For example, if you borrowed 5,000 USD in stablecoins at an APR of 12%, you know that, assuming there isn’t compounding, you’ll have $600 in interest owed after one year.

However, borrowing in crypto is not that simple. Although APR gives a simple picture, many platforms apply compounding, which makes the actual cost higher than the quoted APR. In such cases, the effective interest rate is more similar to the APY. Borrowers need to carefully look at loan agreements for terms like “compounding frequency” or “effective rate” to avoid surprises.

Additionally, crypto lending markets are influenced by the volatility and liquidity of the assets involved. If you are borrowing highly volatile cryptocurrencies, the platform may adjust rates dynamically. APR in such scenarios might shift, leading to variable borrowing costs. Borrowers need to monitor these changes and plan repayments accordingly to avoid higher-than-expected costs.

There are also platform-specific fees that can greatly add to the APR. The APRs on some decentralized finance platforms include these fees, while on others, they appear separately. The difference makes comparison across platforms difficult but is necessary for an accurate cost of borrowing estimate.

The Saver’s Perspective

Annual percentage yield (APY) is much more relevant to the saver or investor, as it indicates how much more your money will grow with account compound interest. This aspect is especially crucial for cryptocurrency, because staking, yield farming, or liquidity provision usually involves relatively frequent compounding. The greater the compounding frequency, the higher the actual returns would be.

For instance, if you are staking $10,000 in a DeFi pool with an APY of 10% that compounds daily, your returns would be more than the simple $1,000 that a 10% APR would give you. Instead, your compounded returns could grow to $1,051 or more, depending on the compounding frequency. In longer periods, this difference is even more apparent, making APY a better indicator of real growth.

The compounding frequency, platform reliability, and stability of the tokens should be at the forefront when comparing APYs for savers. Platforms that compound daily or weekly tend to give better returns compared to those that compound monthly or annually.

APR vs. APY: Which is better?

Neither APR nor APY is inherently better; it depends on your goal. If you’re borrowing, focus on the APR to understand the base cost. If you’re saving or investing, look at the APY to see how much your money can grow with compounding.

Some liquidity pairs offer huge yields in decentralized exchanges (DEX), especially in meme coins, because of:

• Liquidity and Slippage: New or less popular pairs may offer higher yields to attract liquidity providers and reduce slippage.
• Scarcity: Limited token supply can increase demand, leading to better yields for liquidity providers.

For example, if you’re lending out a stablecoin on a DeFi platform, an APY of 8% with daily compounding will yield more than an APR of 8%. But if you’re taking a loan, a lower APR is more favorable as it means less interest to pay.

Cryptocurrency protocols also use APR and APY in many ways. For instance:

• Liquidity Pools in DEXs: Platforms like Raydium, Uniswap, and Sushiswap reward liquidity providers with APR. The rewards often include transaction fees and bonus tokens.
• Staking in CEXs: Centralized exchanges like Binance show staking rewards in APR. However, you can enable auto-savings on Binance, where your rewards are automatically added to your balance, effectively turning APR into APY.

In DEX like Raydium, adding liquidity in Memecoin pairs can be beneficial from incredibly high APR, but high risk in return

Conclusion

In a nutshell, understanding the difference between APR and APY is crucial. APR is ideal for estimating borrowing costs, while APY is better for understanding investment growth. Both metrics are essential for making informed financial decisions. Always compare these rates carefully, read the terms, and choose what aligns with your financial goals.

FAQs

Is it better to earn APR or APY?

It’s generally better to earn APY than APR if you want to grow your money. APY includes the effect of compound interest, which means you earn interest on both the money you deposit and the interest you’ve already earned. This helps your money grow faster. 

The APR, on the other hand only indicates how much interest you pay or earn that does not count on compound interest. So if you are saving money, APY is usually better because it will give you a higher return over time.

What is a good APR rate?

A good APR rate depends on what you are borrowing for. If it’s a credit card, then a good APR is usually 15% to 20%, but some people can get lower APRs if they have excellent credit scores. 

Mortgages have good APRs under 4% to 5%. Crypto lending APRs are around 10%. The lower the APR, the lesser interest you will pay overtime. Always shop around and compare what rates are from which lenders to get a good deal.

What is 5% APY in APR?

To convert 5% APY into APR, first understand the meaning of compounding in APY and the lack of compounding in APR. 5% APY is nearly equivalent to around 4.88% APR, as calculated based on compounding interest frequencies.

This is because the more often interest is compounded, the higher the APY will be compared to the APR. You can use the formula to figure out the true APR, but, in general, for the same rate, APY will be higher than APR.

Can APR and APY rates change?

Yes, the APR and APY rates may differ. Your APR will vary based on whether your lender offering a variable-rate loan or your interest rate increases or lowers with market changes.

Your APY may also vary if the bank changes the interest rate offered, or if they change how often they compound interest. It’s important to check your rates regularly to see if they have changed and to make sure you’re still getting a good deal.

What’s the difference between an interest rate and APY on a CD?

The interest rate on a CD (Certificate of Deposit) shows how much you will earn in interest over the year, but it doesn’t include the effect of compounding. Instead, APY shows how much you will make in one year if the interest is compounded, meaning you earn interest on both your deposit and the interest added.

So, APY refers to a clearer picture of how much your investment will grow. If your CD compounds interest more frequently, the APY will be higher than the interest rate.

The post APR vs. APY: What’s the Difference? appeared first on NFT Evening.

In this guide, we’ll explore the core elements of crypto tokenomics and how they affect your investment strategies. This way, you’ll have the information you need to make more informed decisions, especially when comparing various crypto projects. Let’s get into it.

What is Tokenomics?

Tokenomics, or token economics, refers to the rules and structures that govern how a crypto token functions within its ecosystem. It includes factors such as how new tokens are issued, the maximum token supply, or how many tokens will ultimately exist, and what role they play in the network. By outlining the supply mechanisms, demand drivers, and utility features, tokenomics gives investors insight into a project’s fundamental health.

For example, some governance tokens allow holders to vote on proposals, while utility tokens may pay for transaction fees or unlock certain platform features. A token’s circulating supply and token allocations also shape the market value. This is because large pre-mines or uneven distributions can cause rapid price swings.

Basically, a token’s economics determines how participants engage with it, whether through staking rewards, burning mechanisms, or other incentives. Ultimately, understanding these elements helps assess a token’s growth potential and long-term sustainability.

Main Features of Tokenomics

Issuance

A fundamental component of crypto tokenomics is the issuance schedule, or how new tokens enter the market. Some crypto projects adopt a fixed supply, meaning no additional tokens are minted beyond a certain cap. Others follow an inflationary model, releasing new tokens on a schedule that may mirror the creation of additional money in a traditional economy.

Projects might also combine elements of both, setting an initial supply but leaving room for gradual growth if the community approves. Issuance is often governed by smart contracts, ensuring transparent and predictable token creation. Investors typically watch issuance schedules closely to gauge supply growth and anticipate how it might affect token supply and demand characteristics, as well as overall market sentiment.

Maximum Supply, Circulating Supply, and Market Capitalization

Knowing a token’s maximum supply, circulating supply, and market capitalization helps investors assess potential price movements.

• Maximum token supply represents the highest number of tokens that can ever exist, sometimes called a fixed maximum supply if no further minting is allowed.
• Circulating supply is the actual number of tokens trading freely on markets. The remaining tokens might be locked up, reserved for staking rewards, or still awaiting distribution.
• Meanwhile, the market cap is calculated by multiplying the current market price by the circulating supply. This figure hints at overall market value and can signal whether a token is undervalued or overhyped.

Distribution

Distribution describes how tokens are initially allocated or sold to participants. Some projects use initial coin offerings, known as ICOs, or token pre-sales to allow early supporters to purchase tokens at a preset rate. Others launch via fair distribution, where tokens are mined or earned through community activities.

In addition, the tokens allocated to founders, developers, or private investors can impact a coin’s price once these early allocations become tradable. Inequitable or poorly communicated distribution plans sometimes lead to market distrust or are seen as potential ‘rug pull’ or ‘pump and dump’ schemes. Transparent distribution processes, on the other hand, build confidence among token holders and can foster a more stable, long-term investment environment.

Burning

Token burning permanently removes tokens from circulation, often by sending them to an irretrievable address. This strategy is designed to reduce the supply of a token, potentially increasing its scarcity and supporting supply and demand fundamentals.

Projects might burn tokens each time a transaction fee is paid or periodically through scheduled burn events. Some protocols burn a portion of tokens allocated for specific purposes, such as unsold tokens after an ICO.

Burning can stabilize or elevate a token’s price by decreasing its circulating supply, though that isn’t guaranteed. The most effective token-burning policies are transparent and predictable.

DeFi Incentives

When it comes to the decentralized finance space, tokens can introduce a wide range of incentive mechanisms to help attract participants and investors. Staking rewards let users lock up their tokens to help validate transactions or secure a decentralized network, earning interest or additional tokens in return.

Similarly, liquidity mining or yield farming encourages token holders to deposit their assets into decentralized exchanges or lending platforms, receiving extra tokens as a reward. Governance tokens may grant voting rights in protocol proposals, enhancing community engagement.

All of these incentives actively drive total ecosystem activity, which in turn creates a higher demand for the crypto asset and potentially higher demand levels. This typically result in raising market price through user retention and speculative interest.

Utility

Utility tokens power unique functions within a network, from paying gas fees to unlocking platform features and facilitating a form of governance. The real-world applications of a token can have a massive impact on its value and perceived usefulness. When the underlying use case is strong, demand will typically follow.

Technical Aspects

A token’s technical architecture shapes its security and performance. Smart contracts define token allocations, manage transaction fees, and implement on-chain governance. Some protocols adopt layer-2 solutions for faster throughput. These technological details heavily influence a token’s reliability and versatility, thereby affecting how investors perceive its future potential.

Game Theory in Tokenomics

Tokenomics often leverages game theory to shape the behavior of token holders and other participants in a network. At its core, game theory analyzes how individual choices and incentives interact to produce collective outcomes. In the crypto context, well-crafted tokenomics nudges users to cooperate, with things like staking tokens, contributing to liquidity pools, or voting in governance proposals, rather than simply acting with self-interest or self-centeredness.

At the same time, poorly aligned incentives can encourage destructive behaviors like pump-and-dump schemes, where largeholders manipulate prices to profit at the expense of newcomers. On the flip side, collaborative staking or yield farming can enhance ecosystem security and reward long-term contributors.

Finding a crucial balance between rewards and penalties within smart contracts, crypto projects aim to build robust, self-sustaining networks. In the end, applying game theory principles helps foster trust, reduce conflicts, and create a more positive online environment that helps support and grow a token’s value.

Why is Tokenomics Important?

Tokenomics provides a framework for understanding how supply and demand mechanics, distribution models, and utility features shape a token’s overall viability. This specific aspect of crypto projects is a major distinguishing factor from other investment vehicles, by putting control into the hands of decentralized communities and automated protocols. A token’s design, including issuance schedules, inflationary supply, and burning mechanisms, directly influences market cap and token price over the long run.

Effective tokenomics fosters stability and encourages meaningful engagement from token holders. For instance, a well-planned distribution that rewards ongoing contributions can bolster community trust and participation, thereby reducing volatility.

On the flip side, poorly implemented tokenomics—such as an unlimited supply or misleading burn policies—may dilute investor confidence and cause prices to plummet. Projects must also consider transaction fees, staking rewards, and other forms of incentive to maintain user loyalty in an increasingly competitive crypto economy.

Beyond facilitating growth, clear and transparent tokenomics can also help avert regulatory issues. It prevents potential pitfalls when a project’s design strays too close to unregistered securities or questionable fundraising practices. Ultimately, tokenomics serves as the economic backbone of every decentralized network. This shapes how value moves and how stakeholders interact within the project’s ecosystem.

Conclusion

Tokenomics stands at the heart of every crypto asset, linking real-world incentives with digital supply-and-demand dynamics. From issuance schedules to game-theoretic considerations, these factors decisively shape a token’s evolution. Mastering what tokenomics is allows investors to navigate the crypto landscape more confidently and evaluate projects on a deeper, more strategic level.

FAQs

What is an example of tokenomics?

A simple example is Bitcoin’s fixed supply of 21 million coins, paired with a halving event every four years where the mining reward for each block discovered is halved. This limits new coin issuance, creating scarcity over time and influencing price. The transparent schedule helps investors anticipate changes in BTC’s circulating supply.

What is the idea of tokenomics?

Tokenomics sets the economic rules for a crypto token, including how it’s created, distributed, and used. It aims to align participant incentives, balance supply and demand, and encourage network growth. Essentially, it establishes the financial ‘playbook’ that supports a token’s stability and utility.

What is good tokenomics?

‘Good tokenomics’ typically means a fair, transparent structure that encourages long-term engagement and prevents abusive practices. It often includes measured issuance, well-communicated distributions, and utilities that foster real demand. Clear incentive mechanisms and balanced supply help maintain a stable or steadily growing token price.

How is tokenomics calculated?

Tokenomics isn’t a single formula but involves analyzing factors such as market cap, supply models, burn rates, and utility-driven demand. Observers often multiply circulating supply by the current market price to get the market cap. They then assess issuance schedules, staking rewards, and other supply alterations for ongoing insight.

What is tokenomics for crypto games?

In crypto gaming, tokenomics blends gameplay with digital assets. Players earn or spend in-game tokens for actions like leveling up, crafting items, or trading collectibles. These tokens may have governance or staking features, tying game incentives to broader network value and community-driven development.

The post What is Tokenomics? A Definitive Guide for Crypto Investors appeared first on NFT Evening.

As demand for more eco-friendly and scalable consensus models grows, staking stands out as a strategy that benefits both individual investors and entire blockchain communities. This guide will give you all the information you need to make more informed decisions for your crypto portfolio.

What is Crypto Staking?

Crypto staking is the process of committing a certain amount of digital tokens, often in a dedicated staking wallet, to help support and validate transactions on a proof-of-stake blockchain. Unlike traditional mining, which uses computing power to solve complex puzzles, typically called ‘proof-of-work‘ systems, staking relies on participants holding and ‘locking’ their tokens to verify transactions and secure the network.

In return for their contribution, staked assets can earn regular staking rewards, typically distributed in the network’s native token. This staking process not only fosters decentralization but also allows individual investors to gain more tokens over time, effectively growing their position without active trading.

Because of this, many see staking as an eco-friendly alternative to conventional mining. The exact staking strategy varies by project, with some networks requiring a minimum amount of tokens, and others letting you delegate your stake to validators, removing the need for deep technical knowledge.

Proof of Stake (PoS) vs Proof of work (PoW)

In Proof of Work (PoW) systems, networks rely on miners who employ computing power to solve cryptographic puzzles. This approach underpins early blockchains like Bitcoin. Though battle-tested and highly secure, PoW often faces criticism for its substantial energy consumption, as miners continuously compete to generate new blocks. To maintain network consensus, PoW uses computational difficulty that escalates over time, demanding ever more powerful hardware.

On the other hand, Proof of Stake (PoS) aims to sidestep these inefficiencies by choosing block validators based on the number of tokens they stake. Instead of running resource-intensive calculations, validators prove their commitment to the network through locked-up assets. This means well-funded participants, referred to as stakers, share responsibility for verifying blocks and ensuring network security.

PoS generally achieves faster transaction throughput and requires fewer resources than PoW, making it a more eco-friendly alternative for many emerging blockchains. Not only that, but PoS incentives focus on holding tokens rather than constant mining activity, rewarding those who keep assets locked for longer durations. This structural difference shifts the emphasis away from raw hardware power and toward long-term network involvement, encouraging deeper community engagement in crypto staking.

The Role of Validators and Delegators in Staking

Validators are network participants who run specialized nodes and stake a required amount of the native token to help secure the blockchain. In exchange, they earn staking rewards for verifying new blocks and upholding consensus rules. That said, operating a validator node can demand technical expertise, reliable hardware, and continuous monitoring. If validators act maliciously or fail to meet performance requirements, they risk penalties in the form of “slashing,” which reduces their staked tokens.

Delegators, on the other hand, lend their tokens to validators without personally running the infrastructure. This approach allows investors lacking technical knowledge or time to participate. By delegating tokens, they share in the staking rewards while trusting the validator to perform efficiently.

This two-tier system helps widen access, enabling both advanced users and everyday holders to contribute to network security and earn passive income.

How Does Crypto Staking Work?

Staking begins when you lock tokens in a wallet or staking pool on a POS network. This signals your commitment to the blockchain and allows you to participate in the validation process.

Each time transactions are gathered into a new block, a validator is chosen—often randomly selected but weighted by the size of the stake—to confirm those transactions. Once validated, the block is added to the chain, and rewards are distributed proportionally to all participants whose stake backed the validator.

Depending on the coin, staking can occur through different methods. Some networks require a minimum amount of tokens to stake directly and run a full validator node. Others permit delegation, letting you stake your crypto indirectly by assigning it to a trusted validator. You might also opt for a staking pool, where multiple participants combine tokens to meet the chain’s criteria, and then share rewards based on each member’s contribution.

Throughout this staking process, tokens may remain locked for a set period, limiting their liquidity. When you decide to unstake, there could be a waiting period built into the smart contract before you can exercise full control over your digital assets again.

Why is Crypto Staking Important?

Staking matters because it provides a more eco-friendly alternative to energy-intensive mining, using token ownership rather than raw computing power to secure a blockchain. 

This arrangement increases network security by financially incentivizing honesty. Participants risk losing part of their stake if they act maliciously or fail to follow protocol rules. Not only that, but the shared responsibility among multiple validators boosts decentralization, distributing authority across the community.

For investors, staking serves as a way to earn passive income in the form of additional tokens. Rather than holding idle coins, staking transforms them into interest-bearing assets that grow over time. It can also foster loyalty within the community, as users who stake often become more engaged in network changes and governance, strengthening the overall crypto ecosystem.

Pros and Cons of Staking Crypto

Pros

1. Passive income potential: By locking up tokens to help secure a pos network, you receive staking rewards without the need for active trading. This can often yield higher returns than traditional savings.
2. Enhanced network security: Staking encourages users to hold tokens long-term, increasing overall stability and discouraging malicious activities. Unlike traditional mining, it relies on token ownership rather than brute computing power.
3. Less power-intensive core mechanism: Because validators do not compete using energy-intensive hardware, proof of stake is considered a more sustainable alternative to proof of work, appealing to environmentally conscious investors.

Cons

1. Restricted access to funds: Certain blockchains require a lock-up period, limiting your ability to withdraw or sell instantly if the market turns against you.
2. Varying coin support: Not all cryptocurrencies support staking, and some that do may offer inconsistent rewards, so you must carefully select the right project.
3. Security and delegation risks: If you delegate tokens to a careless or malicious validator, you could face penalties, known as “slashing,” that reduce your staked assets.
4. Tax and regulatory concerns: Staking rewards may be classified as income or capital gains in some jurisdictions, adding complexity to your tax filings and potentially exposing you to regulatory changes.

Crypto Staking Options

Solo or self-staking

• You run a validator node using your own hardware and staking wallet
• Ideal for those with technical knowledge and time to maintain nodes
• Higher potential rewards but demands more setup and continuous monitoring
• Risk of slashing if your node fails or behaves maliciously
• You keep full control over your staked assets, without delegating to others

Delegated staking

• You assign tokens to a validator who manages technical tasks
• Good for those seeking simplicity, as no node maintenance is required
• A portion of rewards goes to the validator as a commission
• Risk depends on validator performance and honesty (slashing can still apply)
• Let non-technical users help secure the network while earning staking rewards

Pooled staking

• Multiple users combine stakes to reach the minimum required for validation
• Rewards are split proportionally based on each participant’s contribution
• Pools lower barriers to entry, making staking accessible for smaller holders
• Some pools charge fees or follow specific withdrawal schedules
• Can provide steadier yields but reduce personal control

Staking as a service

• External platforms handle the entire staking process, often for a fee
• Typically user-friendly, requiring minimal setup or management
• Attractive to institutional investors or large-scale stakeholders
• Potential risks include platform failure or mismanagement
• You trust a third party with your tokens’ security, so select a reliable provider

Popular Staking Cryptocurrencies

Several major blockchains stand out for their well-established pos process and attractive staking metrics. Here are five big ones:

• Ethereum (ETH): Transitioned to a proof of stake model, during a fork known as The Merge for more sustainable scaling. ETH is widely available on many exchanges and can yield moderate returns.
• Cardano (ADA): Known for its research-driven approach, Cardano offers consistent staking rewards and robust community support.
• Polkadot (DOT): Features an interoperable network designed for fast and secure cross-chain operations, with flexible staking methods.
• Cosmos (ATOM): Focuses on interoperability and easy creation of new blockchains. ATOM staking is known for its relatively high annual percentage yield.
• Tezos (XTZ): Provides a self-amending governance system, where stakers (aka: ‘bakers’) can earn rewards by voting on network changes in addition to standard block validations.

Popular Staking Platforms

When selecting a platform for crypto staking, look for a mix of user-friendly tools, strong security, and transparent fees. Here are a few of the most popular platforms.

• Binance: Offers a variety of staking products for different tokens, including locked and flexible options.
  

• Coinbase: Known for its intuitive interface, it supports staking for coins like Ethereum and Tezos, with rewards auto-deposited to your account.
  

• Kraken: Provides staking rewards for multiple assets and includes a streamlined approach to unstaking your coins.
  

• Ledger Live: Enables secure self-custody staking with built-in support for select PoS networks.
  

• Staking-as-a-Service Providers: Entities like Figment or Blockdaemon tailor solutions for institutional and large-scale clients, simplifying validator setup and management for a fee.

Conclusion

Crypto staking merges income generation with active participation in blockchain networks. By choosing the right approach, whether that is solo staking, delegation, or staking pools, you can accrue tokens while fortifying network security. The crypto ecosystem will always be evolving, but cryptocurrency staking will continue to play several important roles and bring tangible benefits to investors.

FAQs

Is staking better than holding in crypto?

Staking can outperform simple holding if the coin’s rewards exceed potential price losses. However, lock periods and market dips may negate those gains, so consider your risk tolerance.

Is crypto staking taxable?

In many jurisdictions, staking rewards count as taxable income. Classification varies by region, so consult professional tax advice or official guidelines to avoid compliance issues.

What does APY mean in staking?

APY stands for ‘annual percentage yield’, which is a way of reflecting on yearly returns from staking crypto.

How is the return on staking calculated?

Staking returns depend on a range of factors, including the token’s inflation rate, network policies, number of participants, fees, and so on. Stakers typically receive rewards proportionally to your staked amount.

The post What is Crypto Staking and How Does it Work? appeared first on NFT Evening.

So, instead of buying actual Bitcoin and figuring out how to store it safely, you can buy shares of this ETF. When the price of Bitcoin goes up, the value of your ETF shares should also go up, and vice versa. In this guide, we will be explaining what Bitcoin ETF is, how it works, its pros and cons, and the future of crypto ETFs.

What are Bitcoin ETFs?

A Bitcoin Exchange-Traded Fund (ETF) is a financial product designed to follow Bitcoin’s price. It enables investors to gain exposure to Bitcoin’s price movements without purchasing, storing, or managing the cryptocurrency directly. Bitcoin ETFs are traded on traditional stock exchanges, making them accessible through regular brokerage accounts.

For instance, the iShares Bitcoin Trust (IBIT) is one of the prominent Bitcoin ETFs, with assets under management (AUM) of approximately $55.44 billion. Similarly, the Grayscale Bitcoin Trust (GBTC) holds around $19.98 billion in assets.

(Bitcoin ETFs overview, source: CoinGlass ETF tracker)

How Do Bitcoin ETFs Work?

Bitcoin ETFs function by tracking Bitcoin’s market price. When you invest in a Bitcoin ETF, you’re purchasing shares of a fund that represents Bitcoin’s value. The fund may hold actual Bitcoin (as in Spot ETFs) or utilize financial instruments like futures contracts to replicate Bitcoin’s performance.

For example, the Fidelity Wise Origin Bitcoin Fund (FBTC) is designed to expose investors to BTC’s daily price movements. Investors can buy and sell shares of FBTC through traditional brokerage accounts.

Types of Bitcoin ETFs

Bitcoin Futures ETFs

Bitcoin Futures ETFs invest in BTC futures contracts rather than holding the cryptocurrency directly. In simple terms “a futures contract is an agreement to buy or sell Bitcoin at a predetermined price on a specific future date”. 

These ETFs aim to track Bitcoin’s expected future price, which can sometimes lead to discrepancies between the ETF’s value and the current market price of Bitcoin.

An example is the ProShares Bitcoin Strategy ETF (BITO), which was among the first Bitcoin Futures ETFs approved in the U.S. It provides investors with exposure to Bitcoin through futures contracts traded on the Chicago Mercantile Exchange (CME).

Spot Bitcoin ETF

Spot Bitcoin ETFs hold actual Bitcoin, aiming to mirror the current market price of the cryptocurrency closely. Investing in a Spot ETF offers direct exposure to Bitcoin’s price movements without the need for investors to manage digital wallets or deal with cryptocurrency exchanges.

The iShares Bitcoin Trust (IBIT) is an example of a Spot Bitcoin ETF, with significant assets under management, providing investors with a straightforward way to gain Bitcoin exposure. 

Advantages of Bitcoin ETFs

Convenience

One of the biggest draws of Bitcoin ETFs is how incredibly convenient they are. If you’ve ever tried to buy Bitcoin directly, you know it can be a bit of a hassle. 

You need to set up an account on a cryptocurrency exchange, go through verification processes, figure out how to use a digital wallet, and then worry about keeping your Bitcoin safe from hackers.

Bitcoin ETFs simplify all of that. You can buy and sell them through your regular brokerage account, the same way you would with stocks or other ETFs. No need for special crypto exchanges or wallets. It’s all handled within the familiar framework of traditional investing. This makes Bitcoin much more accessible to a wider range of investors.

Diversification

Another benefit of Bitcoin ETFs is diversification. Now, this doesn’t mean you’re diversifying within the ETF itself, as it primarily tracks Bitcoin. Instead, it’s about diversifying your overall investment portfolio.

Let’s say you have a portfolio of stocks and bonds. Adding a Bitcoin strategy ETF can introduce a new asset class that doesn’t always move in the same direction as traditional assets. This can potentially reduce the overall volatility of your portfolio. If stocks go down, Bitcoin might go up, or vice versa, which can help to balance out your returns.

Tax efficiency

In some cases, Bitcoin ETFs can offer tax advantages compared to directly owning Bitcoin. This is a bit complex and can vary depending on your specific tax situation and location.

Generally, when you sell Bitcoin directly, you may trigger a taxable event, either a capital gain or loss. With a Bitcoin ETF, some of these tax events might be deferred or handled within the fund itself, so simplifying your tax reporting and possibly reducing your tax burden.

Disadvantages of Bitcoin ETFs

Management fees

These are fees charged by the company that manages the ETF to cover its operating expenses. While these fees might seem small, they can eat into your returns over time, especially if you’re a long-term investor.

When you own Bitcoin directly, you don’t have to pay any ongoing management fees. You only incur fees when you buy or sell on an exchange. So, with an ETF, you’re essentially paying for the convenience of not having to manage your Bitcoin yourself. It’s a trade-off to consider.

ETF inaccuracy

Bitcoin ETFs aim to track the price of Bitcoin as closely as possible. However, they’re not always perfect. There can be discrepancies between the ETF’s price and the actual price of Bitcoin. This is known as “tracking error”.

Several factors can cause tracking errors, such as the ETF’s trading costs, the way it holds its assets, and market fluctuations. While these discrepancies are usually small, they can still impact your returns.

Limits to cryptocurrency trading

When you own Bitcoin directly, you have complete control over it. You can send it to anyone, use it to make purchases (where accepted), and participate in other cryptocurrency activities. Bitcoin ETFs don’t offer this level of flexibility.

With an ETF, you’re essentially just investing in the price of Bitcoin. You can’t actually use it like real Bitcoin. This might not be a big deal for some investors, but it’s something to consider if you’re interested in actively using cryptocurrencies.

Lack of Bitcoin ownership

When you buy a Bitcoin ETF, you don’t actually own any Bitcoin. The ETF provider owns the Bitcoin, and you own shares of the ETF. This means you don’t have control over the Bitcoin’s private keys, which are like the passwords that give you access to your Bitcoin. 

In the crypto world, there’s a saying: “Not your keys, not your coins”. This highlights the importance of controlling your own private keys for security and autonomy.

With a Bitcoin ETF, you’re trusting the ETF provider to securely hold the Bitcoin. While reputable providers have strong security measures in place, there’s always a small element of counterparty risk.

The Future of Crypto ETFs

• More Crypto Assets: Right now, most crypto ETFs focus on Bitcoin or Ethereum. In the future, we’ll likely see ETFs that track other cryptocurrencies or even baskets of different cryptos.
• New Types of ETFs: Besides just tracking the price of a crypto, we might see more complex ETFs. For example, there could be ETFs that focus on companies involved in blockchain technology or even ETFs that use strategies to try and beat the market.
• Increased Regulation: As crypto ETFs become more popular, governments will likely create more rules and regulations around them. This is meant to protect investors and make the market safer.
• Greater Adoption: Because ETFs are easy to buy and sell through regular brokerage accounts, they can bring more people into the crypto market.
• Focus on Security: Security is a big concern in the crypto space. Future crypto ETFs will likely put a huge emphasis on keeping the underlying assets safe. This could involve using advanced cold storage solutions and working with trusted custodians.
• Competition and Lower Fees: As more companies launch crypto ETFs, there will be more competition in the market. This could lead to lower management fees for investors, making these products more attractive. Lower fees mean more of the returns stay in the investor’s pocket.

Conclusion

In a nutshell, crypto ETFs are good for investing in digital currencies. They offer a simple and convenient way to gain exposure to assets like Bitcoin without the complexities of direct ownership. While there are some downsides, such as management fees and not actually owning the underlying crypto, the ease of use and potential for diversification make them appealing to many investors. 

Looking ahead, the future of crypto ETFs seems bright. We can anticipate a wider range of crypto assets being tracked, innovative ETF structures, and increased regulatory oversight.

FAQs

Is it safe to buy Bitcoin ETF?

Yes, investing in Bitcoin ETFs is safer than directly buying Bitcoin for many investors. This is because ETFs are traded on regulated stock exchanges and are managed by reputable financial institutions, compared to unregulated cryptocurrency exchanges. But, like any investment, Bitcoin ETFs come with risks. Bitcoin is known for its high volatility, which means the value of the ETF can fluctuate significantly. Plus, factors like management fees and tracking errors can impact your returns.

Which ETF is best for Bitcoin?

The best Bitcoin ETFs are ProShares Bitcoin Strategy ETF (BITO), Grayscale Bitcoin Trust (GBTC), and Valkyrie Bitcoin Fund. Here are a few popular Bitcoin ETFs:

• ProShares Bitcoin Strategy ETF (BITO): This was the first Bitcoin Futures ETF allowed in the United States. It is ideal for investors looking to trade Bitcoin futures without direct ownership.
• Grayscale Bitcoin Trust (GBTC): While not an ETF in the traditional sense, it offers exposure to Bitcoin’s price through shares traded on the stock market. It has one of the largest AUM in the cryptocurrency investment space.
• Valkyrie Bitcoin Strategy ETF (BTF): Similar to BITO, this ETF tracks Bitcoin futures and provides a regulated way to invest in Bitcoin.

Is BTC ETF approved?

Yes, several Bitcoin ETFs were approved in January 2024, marking an important moment for the cryptocurrency market. Major companies, such as BlackRock and Fidelity, introduced their Bitcoin ETFs following this approval.

Do Bitcoin ETFs exist?

Yes, Bitcoin ETFs exist and are actively traded on stock exchanges worldwide. In the U.S., Bitcoin ETFs like BITO and BTF are available. In Canada, investors can access Spot Bitcoin ETFs such as the Purpose Bitcoin ETF (BTCC) and the Evolve Bitcoin ETF (EBIT).

The post What is Bitcoin ETF and How Does it Work? appeared first on NFT Evening.

In this guide, we’ll give you all the critical information you need to know about the most common crypto scams. You’ll learn how to spot cryptocurrency scams, how they work, and what you can do to protect your digital assets. By staying current and informed, and always exercising caution, you’ll be able to enjoy crypto without being taken advantage of. Let’s get down to it.

What is a Crypto Scam?

Simply put, crypto scams are the term for any fraudulent scheme that uses deception to steal money, obtain private keys illegally, or other sensitive information from people interested in cryptocurrency investments. Scammers will often make ‘too good to be true’ claims of guaranteed returns. Scammers impersonate government agencies as well, trying to use the illusion of authority to trick users into sending cryptocurrency. Cryptocurrency scams are different from traditional scams in that they can easily propagate on digital platforms and social media, reaching online wallets and potential victims instantly.

Scammers might claim they have discovered a groundbreaking crypto project or use fake endorsements to build credibility. In reality, these investments can be pyramid schemes or Ponzi schemes with no legitimate product or service. Other approaches involve phishing scams, where scammers replicate legitimate platforms or wallets to harvest login details. Because most crypto transactions are irreversible, if you end up getting scammed out of your coins, there is almost zero chance of ever recovering those funds.

Types of Crypto Scams

Fake websites

Fake websites are designed to look like legitimate crypto exchanges or wallet providers. Criminals clone the layout, graphics, and domain name with minor alterations, hoping victims will fail to notice the difference. Once users sign up or input their private keys and passwords, scammers seize control of their accounts. These sites may also prompt individuals to deposit funds that disappear instantly. To stay safe, always double-check the URL, look for SSL certificates, and bookmark trustworthy sites to avoid accidental visits to impostor platforms.

Fake apps

Just like fake websites, fraudulent apps target users on mobile devices. They pose as crypto wallets, portfolio trackers, or exchange tools, tricking people into downloading malware or revealing sensitive details. Some apps even manage to pass minimal reviews on official app stores, though more often they are available via direct download links. Watch for poor spelling, low download counts, and suspicious permission requests. Always rely on official links from recognized crypto exchange websites or well-known developers, do your own research, and read user reviews before installing any cryptocurrency-related app.

Fake celebrity endorsements

Scammers often pretend that high-profile figures, such as famous entrepreneurs or actors, endorse a new token or NFT project. Social media posts or sponsored ads push the message that celebrities are backing these ventures, which boosts their perceived legitimacy. In most cases, the celebrity has no involvement. Verify announcements through official channels, and never trust claims of guaranteed profits from these dubious endorsements. With AI and deepfake technology facilitating these types of cryptocurrency scams, scammers can run the same scam with countless different computer-generated celebs or politicians.

Giveaway scams

Also called “free money” scams, these exploit social media to promise doubled deposits or other easy gains. Victims send cryptocurrency to a wallet address, expecting a bigger return, which never materializes. Genuine promotions rarely require you to transfer funds first. These are often fraudulent initial coin offerings. Avoid falling for urgent calls to action, guaranteed returns, or suspiciously good offers that demand quick compliance.

Blackmail and extortion scams

Claiming they possess embarrassing or incriminating information about their target, scammers demand payment, threatening to release it unless a cryptocurrency payment is made. Sometimes they quote old passwords or personal details, obtained from data breaches, to sound convincing. Do not respond to these tactics or send cryptocurrency, and report extortion attempts to local authorities. Often, it is just a fear-based ploy to steal funds, but in other situations, these can end up being romance scams, where scammers pretend to be in love in order to get someone to send them crypto assets.

Cloud mining scams

In these schemes, fraudsters pose as mining service providers, claiming they are mining cryptocurrency on your behalf for a fee. After you invest, you may see fictitious “profits” in a dashboard, but there is usually no real mining happening. Victims often cannot withdraw funds to a wallet or bank account, just like with fake exchanges, and they lose their entire deposit. Research reputable mining operations, and be wary of sites where scammers guarantee unrealistic returns for minimal effort.

How to Spot Cryptocurrency Scams

Spotting a cryptocurrency scam often involves paying attention to sudden promises of guaranteed returns, urgent calls to action, or requests for personal information.

• Legitimate platforms rarely ask for private keys, so any request for sensitive details is a huge red flag.
• Phishing scams frequently begin with direct messages or chats via email, WhatsApp, Telegram, etc., that direct you to unverified websites, where scammers may copy a reputable crypto exchange interface. Scrutinize URLs carefully, and look for misspellings or odd domain endings.
• If you see a ‘limited-time offer’ with claims that a project is about to skyrocket, approach it with caution. Scammers thrive on hype and social media, sometimes impersonating government agencies or forging endorsements. Double-check whether you can verify the crypto project’s team, whitepaper, and online presence. If anything appears off or incomplete, consider it a warning sign.
• Always compare the wallet address with trusted sources, and do not rely solely on social media channels for validation.

By staying sharp and questioning suspicious claims, you can reduce your chance of becoming a victim of crypto scams.

How to Avoid Cryptocurrency Scams

Learning how to avoid crypto scams takes a bit of patience, research, and practical knowledge. Here are some simple tips that can help you steer clear of crypto fraud.

1. Use Reputable Platforms

Start your journey on established exchanges and wallet services that have a proven track record. Fake exchanges and fraudulent crypto coins can look convincing but collapse once they lure in unsuspecting users. Always check reviews, read user feedback, and confirm that a website or app is genuine.

2. Secure Your Private Keys

Never share your private keys with anyone, regardless of who they claim to be. Legitimate crypto services will never ask you to hand over sensitive information. Keep your keys offline if possible, and use hardware wallets for long-term storage when you can.

3. Double-Check URLs and Apps

Phishing scams often begin with lookalike URLs that contain minor spelling differences from legitimate platforms. Bookmark the correct crypto exchange websites for easy access, and download crypto apps only from official stores or direct links provided by recognized sources. Stay away from unsolicited links in emails or social media posts.

4. Question Free Money Promises

Scammers frequently entice victims by claiming they can double your funds or guarantee profits with minimal risk. These types of promises or sales pitches should always be red flags. No reputable project can promise guaranteed returns and legitimate giveaways will never require you to send cryptocurrency first. If an offer seems too good to be true, it almost certainly is.

5. Conduct Thorough Research

Before investing in a new token, review its whitepaper, development team, community channels, and any audit reports. Look for real-world use cases, active developer updates, and transparent communication. Don’t blindly trust or follow endorsements from celebrities or “experts” on social media.

6. Be Wary of Urgency or Pressure

Urgent deadlines, limited availability, and other high-pressure tactics are common with cryptocurrency scams. This sense of urgency is meant to stop you from thinking critically. Give yourself time to evaluate each opportunity.

7. Stay Informed

Follow reputable news outlets, community forums, and official project channels to keep up with emerging scams. Awareness of current tricks and tactics will help you recognize a scheme before it snares your funds.

How to Report Cryptocurrency Scams

Reporting cryptocurrency scams is crucial for preventing further damage and raising awareness. Begin by gathering any evidence of the crypto fraud, such as transaction IDs, screenshots of messages or emails, and details about wallets or websites used by the scammer. This information will help authorities and platforms trace the scheme.

If the scam involves a specific crypto exchange or wallet service, contact their support team immediately and describe the incident in detail. Many legitimate platforms have dedicated channels for reporting fraudulent accounts, suspicious links, or illegal activities. If you share your wallet address or lost funds, notify your financial institutions or credit card providers if applicable, as they might offer additional guidance.

For more serious cases, consider filing a report with local law enforcement and relevant regulatory bodies, such as the Internet Crime Complaint Center in the United States. These agencies can coordinate with international partners when scams span multiple regions.

Also, be sure to share warnings on social media and community forums to alert other users to the scammer’s tactics, preventing further victimization. Use popular customer service hashtags to get traction on your posts. While recovering lost funds can be challenging, reporting the incident helps authorities track the scammer’s methods and potentially shuts down fake platforms.

Conclusion

Understanding how to avoid crypto scams is a core skill for anyone navigating digital currencies. Scammers prey on both newcomers and experienced traders who lower their guard, employing tactics like phishing, social engineering, and fraudulent coin offerings.

Learn the red flags, use trusted platforms, and always verify your sources, and you’ll be substantially lowering your risk of becoming a victim.

FAQs

What are the fake crypto platforms?

Fake crypto platforms are fraudulent exchanges, wallet providers, or trading tools designed to trick users into depositing funds or disclosing private keys. These sites often mimic the look and feel of legitimate platforms, using domains that closely resemble real ones. Their main goal is to steal cryptocurrency and personal data, and they usually disappear once they have gathered enough victim funds. Always verify a platform’s authenticity by checking online reviews, ensuring the URL is correct, and confirming regulatory status where possible.

How to spot a fake cryptocurrency wallet?

A fake wallet may prompt you to reveal sensitive details like private keys or seed phrases during setup. It might also have poor spelling, low download counts, or request overly broad permissions, such as full device access. Some suspicious apps bypass official app stores by offering direct download links. Pay attention to user reviews, check the developer’s credibility, and compare app interfaces against well-known wallet services. If anything seems unprofessional, inaccurate, or deceptive, avoid installing the wallet and search for an official, proven alternative.

How do I get my money back from a crypto scammer?

Recovering funds lost in a crypto scam. It can be difficult to recover funds lost in a crypto scam due to the irreversible nature of blockchain transactions. Nonetheless, you should report the incident to your local authorities, and relevant crypto exchanges, and potentially hire a forensic investigator specializing in blockchain analysis. Sharing details with law enforcement may help identify the scammer, though success rates vary. Prevention and vigilance remain the best strategy, as refunds are not guaranteed once crypto leaves your wallet.

How can crypto scams be prevented?

Preventing crypto scams involves a mix of knowledge, caution, and continuous vigilance. Research any project thoroughly before investing, verifying team members, whitepapers, and community engagement. Use trusted wallets or exchanges with solid reputations, never share your private keys, and always check URLs to ensure you are on the correct site.

Stay wary of unsolicited investment offers, guaranteed returns, or requests for upfront payments. Enable security features like two-factor authentication and consider using hardware wallets for long-term storage. Lastly, keep yourself updated on the latest scam tactics by following reputable news sources and crypto communities, so you can recognize threats early.

The post How to Avoid Cryptocurrency Scams: Keep Your Crypto Safe! appeared first on NFT Evening.

That’s why we’re going to give you a full breakdown of how cryptocurrency taxes work, how you end up owing, and how much you may need to pay. Then we’ll get into what kind of paperwork and recordkeeping you should expect, before giving you some actionable strategies for minimizing your taxes while staying fully compliant.

What Are Cryptocurrency Taxes?

Cryptocurrency taxes refer to the tax obligations that arise when you engage with digital assets like Bitcoin, Ethereum, or other virtual currencies. In many jurisdictions, tax authorities treat crypto as capital assets, similar to stocks, bonds, or real estate.

This means that gains or losses from trading, selling, or exchanging cryptocurrencies may be subject to capital gains taxes. Meanwhile, certain other activities—such as mining, staking, or receiving crypto as payment—can create taxable income.

Because cryptocurrencies are considered property for tax purposes, their tax treatment differs from simple currency transactions. Each taxable event, including selling crypto for fiat currency or using it to buy goods, may trigger a calculation of gain or loss based on the fair market value at the time of the transaction.

Not only that, but certain transactions may fall under different tax categories, from ordinary income tax to long-term capital gains rates, depending on how long you’ve held the asset. Ultimately, cryptocurrency taxes ensure that any profits from digital assets are reported to the appropriate tax authorities, keeping the tax system fair and transparent. Understanding these rules helps you stay on the right side of tax agencies and maintain full compliance.

How Do Cryptocurrency Taxes Work?

Cryptocurrency taxes hinge on a few key principles. First, tax authorities usually consider cryptocurrencies as property, not currency. This classification means that each transaction involving crypto can be a taxable event, depending on what you do with your assets.

If you buy a digital asset and later sell or trade it at a higher price, you generally have a capital gain, and you’ll owe taxes on that profit. Conversely, selling at a loss can sometimes offset other gains, reducing your overall tax liability.

Your cost basis is central to calculating your gain or loss. This is the amount you initially paid for the asset, including fees. When you sell, trade, or otherwise dispose of the crypto, compare the fair market value at the time of the transaction to your cost basis. The difference determines whether you have a gain or loss. Gains might be subject to short-term capital gains tax rates if held for less than a year, or long-term capital gains rates if held longer.

In addition to trading, other activities like mining, staking, or receiving crypto as payment for services typically count as ordinary income at the time you receive them. Tax authorities expect you to report these amounts on your tax return.

Types of Cryptocurrency Taxes

Cryptocurrency taxes fall into several broad categories, each reflecting different kinds of transactions and income sources. Take a look.

1. Capital Gains Taxes: When you sell, trade, or exchange a cryptocurrency for a value higher than your original cost basis, you realize a capital gain. If you held the asset for more than a year, you may qualify for long-term capital gains rates, which are often lower than ordinary income tax rates. Holding for less than a year typically results in short-term capital gains, taxed at your regular income tax bracket.
2. Ordinary Income Taxes: Some crypto activities generate taxable income at the time you receive the asset. For example, mining or staking rewards count as digital asset income, with the fair market value of the coins received on the date you gain control treated as ordinary income. Similarly, if you accept crypto as payment for goods or services, that value is considered taxable income, subject to your standard income tax rates.
3. Other Capital Assets Treatment: Converting one cryptocurrency to another also triggers a taxable event. Even though you’re not converting to fiat, the tax authorities consider it as “disposing” of one asset and acquiring another. The difference in fair market value between the two assets at the time of the transaction determines your gain or loss.
4. Less Common Tax Situations: Certain actions, like receiving airdrops, hard forks, or participating in liquidity pools, may carry their own unique tax consequences. Each scenario requires evaluating the fair market value and determining whether it counts as ordinary income, capital gain, or another form of taxable activity.

How Much Is Cryptocurrency Taxed?

The amount of tax you pay on cryptocurrency depends on several factors: how long you’ve held the asset, your overall income level, and your country’s tax laws. Generally, if you hold crypto for more than a year before selling, any gain you realize is subject to long-term capital gains tax rates, which are often lower than short-term capital gains rates. In some jurisdictions, long-term rates might be as high as 20%, depending on your tax bracket and filing status. If you hold the asset for less than a year, the gain is typically treated as short-term capital gains, taxed at your ordinary income tax rate. This could mean higher tax rates (could be up to 37%), especially if you already earn a substantial salary or have other income sources.

When it comes to ordinary income, the tax rate equals your regular income tax rate. For many people, this corresponds to their income tax bracket, which could range anywhere from 10% to 35%, depending on total earnings.

Your specific tax liability also depends on any available deductions, credits, or offsets. For instance, if you experience capital losses on other trades, you might be able to reduce your total capital gains. Additionally, holding crypto for more than a year can significantly lower your tax burden.

What it really comes down to, is that determining how much you’ll pay requires careful calculation of each transaction’s cost basis, the fair market value at disposal, and the relevant rates. Consulting a tax professional or using reliable crypto tax software can help ensure you apply the correct tax rates to your unique circumstances.

When Do You Owe Tax on Cryptocurrency? 

Capital gains tax

You generally owe taxes on cryptocurrency whenever you realize a taxable event that produces a gain or income. One of the most common triggers is selling your crypto for fiat currency at a higher price than your original cost. For example, if you bought some Bitcoin for $1,000 and sold it later for $2,000, you have a $1,000 capital gain, which is then taxable.

However, taxable events extend beyond just selling for cash. Exchanging one cryptocurrency for another may also create a tax obligation. If the crypto you’re trading away has appreciated since you acquired it, you’ll owe taxes on the gain, even though you never converted it into fiat. Using crypto to purchase goods or services is another scenario where you might owe taxes, as you’re effectively disposing of an asset with a certain fair market value.

Additional situations, like swapping crypto for NFTs or stablecoins, can also trigger taxes if the original assets have appreciated.

Income tax

Receiving crypto as payment for freelance work, mining rewards, or staking income is considered taxable income at the time you receive it. In these cases, you’ll be taxed based on the coin’s value when it enters your wallet. Even gifting crypto to someone beyond certain thresholds or donating it to charity can involve reporting requirements and potential tax implications.

Airdrops and hard forks that provide you with new tokens at no immediate cost may also count as ordinary income, subjecting you to tax at the time of receipt. Each of these events requires careful documentation to determine the extent of your liability.

When Do You Need to Report Crypto Taxes?

Reporting your crypto taxes typically follows the same timeline as filing your annual tax return. In the US, the tax year ends on December 31, and you must report all taxable events that occurred during that period by the standard tax filing deadline of April 15. It’s crucial to confirm the specific deadlines for your location, however, as dates will vary from one jurisdiction to another.

You need to report whenever you’ve had a taxable event. This includes capital gains or losses from selling, trading, or using crypto to buy goods, as well as any taxable income from staking, mining, or receiving crypto as payment. Even if you only made a few trades, the net gains or losses must appear on your tax return.

Some exchanges may send tax forms to help you summarize your transactions. However, it’s ultimately your responsibility to ensure your reporting is accurate and complete. Using crypto tax software can simplify the process by aggregating all of your trades and calculating the required figures. Keeping detailed records throughout the year, including purchase dates, cost bases, and fair market values at the time of disposal, makes it easier to report your activity on time.

In short, you should be ready to report crypto activities in line with your regular tax filing schedule. Planning ahead, maintaining good documentation, and understanding which events are taxable ensure you meet all your reporting obligations promptly and correctly.

Tax Forms Issued by Cryptocurrency Exchanges

Many cryptocurrency exchanges issue tax forms to help you report your crypto activity. These forms summarize your annual transactions and record all of the details for each one. In some countries, these forms are sent directly to you and the tax authorities, ensuring transparency and accuracy.

In the United States, for example, exchanges may provide forms such as a 1099-B or a 1099-K, depending on the nature and volume of your transactions. A 1099-B can detail your capital gains and losses, making it easier to calculate your tax liability. 

Meanwhile, a 1099-K reports gross transaction volumes rather than profit, so it might require additional calculations on your part.

Keep in mind, however, that not all exchanges issue these forms. Smaller or foreign-based platforms may not send tax documents, leaving you to gather the necessary information from your account history. If your exchange doesn’t provide a specialized tax form, you may need to rely on transaction histories, API integrations with crypto tax software, or manual record-keeping.

Cryptocurrency Tax Records

Accurate and thorough record-keeping is vital when managing crypto taxes. Every taxable event, whether it is a sale, trade, use of crypto to purchase goods, or receipt of staking or mining rewards, must be tracked. So, you can correctly calculate capital gains and losses, taxable income, and any applicable deductions.

Good records ensure you know your cost basis, the fair market value at the time of each transaction, and the resulting capital gain or loss. Essential details include the date and time you acquired the asset, the amount of crypto received. They also cover the purchase price or cost basis, as well as the date and value when you sold, traded, or disposed of it.

If you have engaged in complex activities such as liquidity pooling, yield farming, or receiving airdrops, keeping even more detailed notes can help clarify the tax implications. Accurate documentation also makes it easier to handle audits, inquiries from tax authorities, and potential adjustments to previous returns.

To streamline the process, consider using crypto tax software that automatically imports your transaction history from multiple crypto exchanges and wallets. These tools can handle cost basis calculations, including FIFO, LIFO, or specific identification, track long-term and short-term capital gains, and create ready-to-file tax reports.

If your crypto activities are significant, seeking guidance from a tax professional may help ensure full compliance and optimization of your tax strategy. Staying organized throughout the tax year makes filing your return easier and reduces the risk of errors. With the right systems in place, you can confidently report your crypto activities, meet all your obligations, and avoid potential penalties or complications later on.

Tax-free Cryptocurrency Transactions

While many crypto activities trigger tax obligations, certain transactions may qualify as tax-free or carry reduced tax liability. Understanding these scenarios can help you manage your overall tax burden and keep more of your gains.

One example is simply buying and holding crypto without converting it, trading it, or using it for purchases. Merely holding an asset does not create a taxable event. No matter how much your digital asset appreciates, you generally do not owe taxes until you sell or otherwise dispose of it. This allows long-term holders to defer taxes while potentially benefiting from favorable long-term capital gains rates later.

Another potential tax-free scenario involves transferring crypto between your own wallets or exchange accounts. Moving your tokens from one personal address to another does not count as a disposal. Therefore, it does not generate a gain or loss. As long as ownership remains with you, this type of transfer is typically a non-taxable event.

Certain jurisdictions may offer additional opportunities, such as holding crypto within certain tax-advantaged accounts or leveraging local laws that exempt small crypto transactions under specific thresholds. Similarly, some charitable donations of crypto may be eligible for a tax deduction, depending on the rules in your region. While not strictly tax-free, these strategies can lower your taxes owed.

Simply put, identifying tax-free transactions requires a clear understanding of the rules in your country. By familiarizing yourself with these scenarios and structuring your crypto activities accordingly, you can minimize tax exposure, reduce complexity, and optimize your long-term financial results.

How To Lower Your Crypto Taxes?

Lowering your crypto taxes involves careful planning, smart strategies, and a thorough understanding of the rules in your jurisdiction. While you cannot avoid taxes entirely, you can take steps to reduce your tax liability and keep more of your gains. Consider some of the following strategies, and speak with your preferred tax expert or financial advisor about implementing the ones pertinent or applicable to your investment style and long-term goals.

Hold for the Long Term

One of the most effective ways to lower your crypto taxes is by holding your assets for more than a year before selling. Long-term capital gains rates are often significantly lower than short-term rates, especially if you fall into a higher income tax bracket. This patience can result in substantial savings and help you keep a larger portion of your profits.

Use Capital Losses to Offset Gains

If you have experienced losses on certain cryptocurrency trades, you can use these losses to offset your capital gains. By strategically selling assets that have declined in value, known as tax loss harvesting, you can reduce the amount of gains subject to tax. Keep in mind that you must follow the rules in your country related to wash sales or similar restrictions, as these prevent you from immediately rebuying the same asset.

Optimize Your Accounting Method

Depending on local tax regulations, you may have the option to choose different accounting methods for tracking the cost basis of your crypto trades. Methods like ‘first-in first-out’, or FIFO, or specific identification can influence the size of your taxable gains. Selecting the accounting method that minimizes gains can lead to lower taxes over time.

Consider Retirement and Tax-Advantaged Accounts

In some regions, certain retirement or tax-advantaged accounts allow you to hold cryptocurrencies. By doing so, you can potentially defer taxes until you withdraw the funds or even enjoy tax-free growth, depending on the account’s rules. Consult a tax professional to determine if these options are available and beneficial in your situation.

Stay Organized and Use Tax Software

Good record-keeping is essential. Tracking every transaction ensures that you accurately calculate gains, losses, and taxable income. Using crypto tax software can simplify these calculations. It helps you maintain proper records, and ensures you do not overlook deductions or credits. The more accurate your data, the better positioned you are to minimize unnecessary taxes.

Consider Charitable Donations

Donating cryptocurrency to qualified charities may yield tax benefits. In some jurisdictions, you may receive a tax deduction for the fair market value of the donated crypto, and you do not pay taxes on the associated gains. This strategy can support a cause you care about while also reducing your taxable income.

Consult a Tax Professional

Crypto tax rules can be complex and vary widely across different regions. A tax professional experienced in cryptocurrency matters can help you identify opportunities to lower your tax bill. They can ensure compliance with local laws, and guide you through any regulatory changes that may affect your strategy.

Monitor Changing Regulations

Tax agencies frequently update their guidance on digital assets. Staying informed about evolving rules allows you to adjust your strategies accordingly. Regularly reviewing your approach and adapting to new regulations can help ensure that you consistently minimize your crypto taxes over the long run.

FAQs

How is crypto staking or mining taxed?

Staking or mining generates new coins that are generally considered taxable income at the time you receive them. The fair market value of the coins on that day becomes your cost basis. When you later sell, trade, or convert them, you may owe capital gains taxes on any increase in value since acquisition.

How are crypto debit card payments taxed?

Using a crypto debit card to buy goods or services is considered disposing of a digital asset. If the crypto you spend has appreciated since you acquired it, you realize a taxable gain. You owe taxes on the difference between your cost basis and the fair market value at the time of purchase.

How are crypto gifts and donations taxed?

If you are giving someone the gift of crypto, you generally won’t be creating a taxable event for yourself. However, the person you gift the crypto to will assume your cost basis. Donations to qualified charities may provide tax deductions equal to the crypto’s fair market value at the time of donation. These rules vary by jurisdiction, so verify local regulations to ensure proper reporting.

How are NFTs taxed?

NFTs, or non-fungible tokens, are typically treated like any other digital asset. So, selling an NFT for profit leads to capital gains taxes. However, creating and selling NFTs on the primary market may be considered ordinary income. Sales on the secondary market will generally pay taxes according to the usual capital gains structure based on increases in value over time.

How are exchange bankruptcies taxed?

If a crypto exchange goes bankrupt and you lose access to your funds, tax treatment depends on your jurisdiction’s rules. In some cases, you may be able to claim a capital loss if the assets become worthless. It’s critical to work with a tax professional in situations like this. Plus, maintain records to support any claims related to lost or inaccessible funds. These scenarios can take months, even years to figure out, like the ongoing FTX situation.

How do I avoid crypto taxes?

You cannot legally avoid taxes entirely, because that’s known as tax evasion. However, you can minimize them, and often to a substantial degree. Hold assets as long as possible, use losses to strategically offset gains, donate to charities for additional deductions, and consider tax-advantaged accounts. Always comply with local regulations, maintain detailed records, and consult a tax professional for personalized guidance.

The post Crypto Taxes: Everything You Need To Know appeared first on NFT Evening.

In this guide, we’ll look at what KYC means in the crypto space, how it works, why it matters for exchanges, and whether you can participate in the market without it. Let’s dive in.

What does KYC mean in crypto?

KYC in crypto refers to “know your customer,” a set of regulatory and procedural standards designed to confirm customer identities and ensure compliance with local and international financial laws. In the crypto industry, KYC requirements aim to reduce anonymity in crypto transactions, making it harder for fraudsters, terrorists, or money launderers to abuse digital assets.

These KYC procedures require users to provide personal documents, like a state ID or driver’s license, along with proof of their residential address. This helps crypto exchanges stay in line with global regulatory compliance requirements, such as the framework created by the Financial Action Task Force, helping to grow trust in the entire ecosystem.

For businesses, KYC crypto measures facilitate safer onboarding, protect their reputations, and reduce the risk of fines and penalties. For users, passing the KYC step can grant access to higher withdrawal limits, advanced features, and greater trading security.

AML for Crypto

Anti-money laundering or AML protocols work hand-in-hand with KYC in the crypto space. AML measures focus on identifying and preventing suspicious activity, including money laundering and terrorist financing, within financial systems. By enforcing AML regulations, authorities ensure that digital assets don’t become safe havens for illicit funds.

In most cases, AML involves transaction monitoring, risk profiling, and ongoing vigilance for abnormal behavior. Coupled with KYC, these controls reduce the likelihood of illegal activities by making it easier for crypto exchanges and financial intermediaries to detect and report questionable transactions.

How does KYC work with crypto?

When a user signs up for an exchange or a related crypto platform, they’re prompted to submit personal information, like name, date of birth, and proof of address, alongside government-issued IDs like a state-issued driver’s license or passport. This data undergoes thorough checks by identity verification solutions or crypto KYC providers, who confirm that the applicant isn’t on any sanctions list or known for illegal activities.

Once the verification process is complete, the platform can better assess the customer risk profile and take appropriate measures if any red flags surface. Additionally, by establishing a clear link between an individual and their financial transactions, regulatory authorities can more effectively detect suspicious activity. In the end, KYC fosters trust, stability, and credibility across the cryptocurrency market.

Process of KYC

1. Data Collection: Users provide personal information along with a government-issued ID. High-quality scans or photos of documents are essential for document verification.
2. Identity Verification: The platform’s identity verification solutions check submitted details against databases, sanctions lists, and watchlists. In some cases, additional steps like uploading a selfie or recording a short video are required to confirm the user’s identity matches the documents.
3. Approval & Account Verification: Once cleared, the user’s account is officially KYC-verified. This status often grants access to higher withdrawal limits, advanced trading features, and fiat currency options, ensuring compliance with AML regulations and financial action task force guidelines.

KYC and Crypto Exchanges

Regulatory Shift Toward Compliance

As the crypto industry matures, KYC crypto measures have become a defining characteristic of reputable cryptocurrency exchanges. Rather than operating as the ‘crypto wild west’, platforms now move toward a compliance-driven model similar to traditional banking. This transformation aligns with KYC requirements, ensuring that users engage within a legally sanctioned environment. 

Preventing Illicit Activities

Robust KYC procedures help prevent money laundering, and counter-terrorism financing, as well as reduce other fraudulent activity. Without these measures, criminals could abuse exchanges to convert illicit funds into legitimate assets, undermining public trust in the crypto space. By confirming customer identities, platforms strengthen integrity and deter bad actors.

Building User Confidence

Embracing KYC is not just about following rules; it’s a strategy to win user confidence. When exchanges show they operate within the law and adhere to AML regulations, users feel safer. This assurance attracts mainstream investors who might otherwise avoid less regulated venues. A transparent framework, supported by crypto kyc providers, helps exchanges reassure customers that their funds reside in a controlled, secure environment.

Enhancing Market Credibility

Compliance with KYC bolsters an exchange’s reputation. By demonstrating commitment to regulatory standards, platforms foster stable user bases and cultivate stronger relationships with financial authorities. This approach can pave the way for partnerships, licensing opportunities, and smoother integration with legacy financial institutions, ultimately advancing the credibility of the exchange.

Dynamic, Ongoing Adaptation

Implementing KYC is not a static, one-time effort. Exchanges must continuously update their KYC measures and identity verification solutions to stay ahead of emerging threats. Machine learning tools can assist with transaction monitoring, flagging suspicious activity before it escalates. Regular adjustments ensure compliance remains current, protecting both the platform and its users.

A Hallmark of Professional Exchanges

Ultimately, exchanges that integrate KYC set themselves apart from competitors that ignore compliance. Whether the focus is on reducing fraud, attracting conventional investors, or meeting international legal standards, KYC represents a critical evolution in how crypto platforms operate. By prioritizing security, transparency, and regulatory alignment, these exchanges lay the groundwork for a more stable, trusted global marketplace.

Balancing Decentralization and Compliance

Critics argue that KYC runs counter to the decentralized ethos of blockchain technology. Yet many crypto enthusiasts accept a trade-off: improved security and legitimacy at the cost of reduced anonymity. This compromise helps the industry mature. Over time, the capacity to conduct KYC effectively becomes a marker of professionalism, guiding the ecosystem toward mainstream acceptance.

Do crypto wallets need KYC compliance?

Not all crypto wallets require KYC compliance, but many regulated platforms now encourage or mandate it.

Custodial wallets that are tied to centralized services may require users to verify their identity. This allows the wallet provider to align with local and international regulations, preventing suspicious activity and maintaining trust.

Non-custodial wallets, on the other hand, do not usually require any form of identity verification. They give users control over their private keys and allow them to remain disconnected from traditional financial intermediaries.

Although these solutions deliver greater privacy and autonomy, some exchanges and services may restrict transactions with wallets that have not passed KYC checks. Ultimately, whether a crypto wallet needs KYC compliance depends on the specific platform’s legal obligations and the user’s preference for privacy, convenience, and compliance with the prevailing regulatory environment.

Can I buy crypto without KYC?

It is possible to buy crypto without KYC on certain platforms, but options are limited and come with trade-offs. Some decentralized exchanges, peer-to-peer marketplaces, or in-person trades allow users to purchase digital assets without providing identification. These methods offer greater privacy and may appeal to individuals who value anonymity or operate in regions with restrictive regulations.

However, non-KYC options often involve higher fees, smaller limits, or reduced liquidity. Without verification, it can be challenging to access mainstream exchanges, advanced trading features, or fiat currency payment methods. As the regulatory climate continues to tighten, more prominent marketplaces and services require users to complete KYC procedures.

FAQs

Does metamask require KYC?

Metamask does not require KYC because it is a non-custodial wallet. Users retain control over their private keys, and the platform does not hold user funds.

Does Crypto.com require KYC?

Crypto.com typically requires KYC verification before granting access to its full suite of services. By confirming user identities, the platform complies with regulatory standards, supports fiat transactions, and provides higher withdrawal limits.

Is KYC verification safe?

KYC verification is generally safe when conducted by reputable platforms employing strong data protection methods. Although risks exist if personal data is compromised, established exchanges use encryption and strict security protocols to keep information secure and maintain customer trust.

Why do centralized exchanges require you to verify your identity?

By verifying customer identities, these platforms reduce risks associated with money laundering, terrorist financing, and fraud, creating a more stable, transparent cryptocurrency market.

Does Trust Wallet require KYC?

Trust Wallet does not generally require KYC because it is a non-custodial wallet. Users control their private keys, and the app does not store customer information.

Do all crypto wallets require KYC?

Not all crypto wallets require KYC. Non-custodial wallets prioritize user autonomy and typically forego identity checks. In contrast, custodial wallets connected to regulated platforms often need KYC compliance to meet legal obligations and ensure a secure trading environment.

Can I withdraw crypto without KYC?

Withdrawing crypto without KYC is possible through certain non-custodial wallets, peer-to-peer trades, or decentralized platforms. However, many regulated exchanges and custodial services will require verification before processing withdrawals, limiting options for users seeking anonymity.

Is it illegal to buy crypto without KYC?

Buying crypto without KYC is not necessarily illegal, but it depends on local regulations. Some jurisdictions require KYC to prevent illicit activities. While decentralized options may not enforce KYC, operating outside compliance can carry legal risks and potential penalties.

The post What is KYC in Crypto and Why Do Exchanges Need KYC? appeared first on NFT Evening.

In this guide, we’ll walk you through a detailed example of how this strategy works, including clear calculations and a step-by-step DCA table.

What is dollar-cost averaging?

Dollar-cost averaging or DCA is an investment strategy to buy assets regularly with a fixed dollar amount. It means putting a fixed amount of money into an investment on a regular schedule. It doesn’t matter if the price of the cryptocurrency is going up or down. You just stick to the plan and keep investing the same amount each time.

For example, if you want to invest $1,200, you can invest $100 each month for a year. This method helps reduce the risk of investing a large amount at a peak price. This can reduce the risk of losing a lot if the market suddenly drops. DCA is good for people who want to invest steadily without worrying too much about timing.

Now, for a better understanding, look at this current MicroStrategy Bitcoin investment graph, they are continuously buying BTC at different prices to average out the actual price. Their average buying price is $61,694, while the current BTC price is $97,619. Hence, they achieve a 58.44% profit over time with DCA.

How does dollar-cost averaging work?

Dollar-cost averaging works by setting up a routine where you invest a fixed dollar into cryptocurrency at regular intervals, regardless of the market’s ups and downs. 

Let’s say you decide to invest $50 every week into Bitcoin. If Bitcoin’s share price is high one week, you’ll get fewer shares or coins for your $50. Conversely, if the price drops, you’ll buy more coins with the same amount. Over time, this averages out the cost of your investment. 

The beauty of DCA is that it removes the need to predict market highs and lows. Instead, you consistently buy, which can smooth out the volatility and potentially lead to better long-term gains. It’s a disciplined approach that can help manage risk in an unpredictable market like crypto.

Benefits of dollar-cost averaging

• Less Risk: Dollar-cost averaging (DCA) spreads out your investment, so you’re not putting all your money in at once. If the crypto market declines, you won’t lose everything at once because you’ve only got part of your investment in at any given time.
• Lower Average Cost: With DCA, you end up buying more when prices are low and less when they’re high. This means, over time, you buy at a lower average price.
• No Need to Predict the Market: Guessing when to buy crypto can be tough. DCA takes that stress away because you just keep investing the same amount regularly, no matter what the market’s doing.
• Encourages Regular Saving: DCA gets you into the habit of investing regularly. It helps build discipline, which is great when dealing with something as unpredictable as crypto.
• Keeps Emotions at Bay: The crypto market can make you feel all sorts of emotions. DCA helps because you’re not making decisions based on how you feel about price changes; you stick to your plan.
• Good for Small Investors: If you don’t have a lot of money to invest all at once, DCA lets you start with whatever you can afford each time. It makes investing in crypto accessible to more people.

Drawbacks of dollar-cost averaging

• Might Miss Out on Gains: If you start DCA right before a big market surge, you’ll wish you’d put all your money in at once. You end up buying at higher prices later, missing potential profits.
• Transaction Fees: Every time you buy crypto, there’s usually a fee. If you’re doing DCA with small amounts, these fees can add up, eating into what you make.
• Not Great in a Bull Market: If you’re using DCA while the market’s just going up, you’re buying at higher and higher prices. You might end up with fewer coins than if you’d invested all at once at the start.
• Slow Growth: DCA can feel like you’re not getting rich quick. It’s all about steady growth, which isn’t for everyone who wants fast returns.
• Can Be Tough Emotionally: When prices fall, it’s hard to keep investing. DCA requires patience and discipline to keep going, even when you see your investment value drop.

Example of dollar-cost averaging

Let’s take the example of John, who wants to invest in Bitcoin but is worried about its volatile price. Instead of investing a large amount at once, he decides to use dollar-cost averaging (DCA). John plans to invest $100 every month for a year (12 months). He follows a disciplined approach and invests on the 1st of each month, regardless of the Bitcoin price.

Below is the detailed breakdown of John’s investment over 12 months:

To find the average cost per Bitcoin for John, we use the total amount invested and the total BTC bought:

Total BTC Bought: John purchased 0.025993 BTC in 12 months

Total Investment: $1,200 over 12 months

Average Cost Per BTC: 

Average Cost = Total Investment / Total BTC Bought = 1,200 / 0.025993 ≈ 46,157 USD per BTC

Comparing DCA with Lump-Sum Investment:

If John had invested all $1,200 at once when Bitcoin was at $50,000 in Month 1:

He would have received: 1,200 / 50,000 = 0.024 BTC

Through DCA, however, John ended up with 0.025993 BTC by buying Bitcoin at various price points. This means he got slightly more Bitcoin for the same amount of money by averaging out his purchases, especially because he invested during periods when Bitcoin prices were lower (e.g., $30,000).

This example shows how DCA helps investors avoid the pressure of market timing and reduce risks from price volatility. By consistently investing, John ended up with a larger Bitcoin portfolio and a lower average cost compared to a lump-sum investment.

How can you set up dollar-cost averaging for your crypto investments?

Setting up dollar-cost averaging (DCA) for crypto investments is straightforward and can be done with the following steps:

1. Choose Your Cryptocurrency Exchange or Broker: Select a platform where you can buy cryptocurrency. Make sure it supports the crypto you want to invest in and offers features for automated trading bots or recurring purchases. We recommend Binance because it has an “Auto-invest feature”.
2. Open and Fund an Account: If you haven’t already, sign up for an account and complete any necessary identity verification. Once verified, deposit funds into your account. This can be done via bank transfer, debit/credit card, or other payment methods.
3. Determine Your Investment Amount and Frequency: Decide how much you want to invest per period (e.g., $100 per month) and how often (weekly, monthly).
4. Set Up Recurring Buys: Most exchanges now offer an option for setting up recurring or automatic purchases. Look for terms like “Recurring Buy”, “DCA”, or “Automated Investment”. Enter the amount you want to invest, select the cryptocurrency, and choose the frequency (like every week or month). Some platforms allow you to choose the day of the week or month for the investment to occur.
5. Monitor Your Investments: Even though DCA is about automation, you’ll need to check in to see how your investments are doing. You might need to adjust your investment amount if your financial situation changes or if you want to react to market trends, although DCA is meant to minimize this need.

Conclusion

In wrapping up, dollar cost averaging? It’s an investing strategy in which you invest a fixed amount into cryptocurrency at regular intervals, regardless of price changes.  This approach can help smooth out the ups and downs of the market, potentially leading to a lower average cost for your investments over time. 

It’s especially useful for those who want to invest without the pressure of timing the market perfectly. Whether you’re just starting or looking to manage risk better, DCA could be a smart way to grow your crypto portfolio.

FAQs

Is dollar-cost averaging a good strategy?

Yes, dollar-cost averaging can be a great strategy if you want to invest in cryptocurrencies without worrying about when to buy. By putting in the same amount regularly, you end up buying more when prices are down and less when they’re up, which could mean you pay less on average. 

This approach is especially handy in the wild swings of the crypto market, helping you avoid the risk of putting all your money in at the wrong time. However, if the market only goes up, you might miss out on bigger gains by not investing everything at once.

What is the best strategy for dollar-cost averaging?

The best way to do dollar-cost averaging is to decide on a regular investment plan that fits your budget, maybe weekly or monthly. Pick an exchange that lets you set up automatic buys if you can, or just remember to do it yourself. 

It’s important that you only invest money you can afford to lose and stick to your plan no matter how the market moves. Also, watch out for fees because they can eat into your investment, especially if you’re buying small amounts often. The trick with DCA is to keep going steadily and patiently.

How do I calculate dollar-cost averaging?

To figure out your dollar-cost averaging, first add up all the money you’ve put in over time. Then, count up all the cryptocurrency units you’ve bought. Divide the total money by the total units to find your average cost per unit. 

For instance, if you’ve spent $600 over six months and got 0.015 BTC, your average cost per BTC would be $600 divided by 0.015, which is $40,000. 

Doing this calculation shows you how much you’re really paying for each piece of cryptocurrency over time, which can be quite enlightening when you see your numbers.

Is it better to DCA or lump-sum?

If the market’s going up, putting all your money in at once could give you better returns because you buy at a lower price right away. But if the market’s all over the place or you’re not sure when to invest, DCA can be safer since you spread out your risk. 

It’s also good if you don’t have a big chunk of money to invest all at once. You might find that lump-sum investing can be stressful, but DCA can make the process smoother and less nerve-wracking. 

In the end, DCA might be the way to go if you’re worried about timing, while lump-sum could be better in a consistently rising market.

The post What Is Dollar-Cost Averaging? Definition, Benefits, & Examples appeared first on NFT Evening.

In this post, we’ll walk you through legal considerations, best security measures, and explore strategies like using password managers, two-factor authentication, and cold storage solutions. By the end, you’ll have easily actionable steps to keep your crypto safe, maintain peace of mind, and trade confidently in the coming year.

Is Crypto Legal?

As we close out 2024, the legal landscape for cryptocurrency is still a foggy patchwork of varied regulations, evolving policies, and ongoing debates. Different countries maintain distinct approaches to governing digital assets, with some embracing digital currency as a legitimate form of payment and investment, while others impose strict rules or outright bans.

The complexity of these legal frameworks means it’s crucial to stay informed before trading, investing, or looking into how to protect your cryptocurrency. Many nations now recognize crypto exchanges as regulated financial entities. This subjects them to compliance measures like ‘Know Your Customer’ and ‘Anti-Money Laundering’ protocols, also known as KYC & AML.

This helps reduce illicit activities and increase trust in the broader market. Still, regulatory clarity varies widely from one jurisdiction to the next, with some encouraging crypto investments and others discouraging or even prohibiting them.

Knowing where your jurisdiction stands is more than just a legal checkbox; it’s a fundamental layer of security. Compliance with local laws ensures that you can confidently store, trade, and protect your digital assets, making it easier to avoid disputes, safeguard your holdings, and reduce risks as the crypto world marches forward.

Crypto Regulations

Policymakers worldwide continue to refine their rules, focusing on preventing fraud, ensuring consumer protection, and maintaining financial stability.

Central banks and regulators closely monitor cryptocurrency transactions. Meanwhile, some countries are developing central bank digital currencies to coexist alongside traditional digital currency and private cryptocurrencies.

Security measures like mandatory registration for crypto exchanges, strict KYC/AML requirements, and potential taxation guidelines are becoming the norm. These frameworks aim to bring more legitimacy to the market, improving transparency and reducing the incidence of scams or stolen, lost cryptocurrency.

For individuals, knowing the rules in your jurisdiction helps you navigate the complexities of storing crypto and trading legally. Before you engage with a wallet address or open an exchange account, take time to research applicable laws. Thus, you are empowered with safety and security.

Methods To Protect Your Crypto

It’s important to find the most effective methods to secure your cryptocurrency account from digital theft. As the number of digital assets continues to grow, that growth brings new opportunities for crypto investments, but it also brings elevated risks of digital theft, phishing scams, and other ongoing security threats.

With the right combination of tools and strategies, you can keep your cryptocurrency wallets safe. The following sections break down various approaches, from using crypto exchanges more cautiously, to leveraging secure password managers, setting up two-factor authentication, and taking advantage of the unmatched protection offered by cold storage solutions like hardware wallets. Each method has benefits and trade-offs, so let’s dig into the details.

Store your crypto on an Exchange

Storing your crypto on a reputable cryptocurrency exchange may seem like a convenient option for beginners or frequent traders. Leading exchanges often invest heavily in security measures, employing robust encryption, multi-sig verification, multi-factor authentication, and round-the-clock monitoring to prevent unauthorized access. Many top-tier platforms even maintain insurance policies to cover specific types of lost cryptocurrency in case of severe breaches.

However, relying solely on an exchange account has its downsides. While the platform might safeguard your coins against external hacking attempts, your holdings remain partially under the exchange’s control. Also, by keeping funds on a platform connected to the internet, you are more exposed to hacking attempts than if you were to secure them offline.

For the best security on an exchange, choose from some of the best exchanges out there, knowing that they are well-established and have transparent security protocols. Be sure you keep your wallet password updated, and enable two-factor authentication. Finally, never store more in your online crypto account than you need to trade cryptocurrency in the short term.

Use a password manager

The sheer number of online accounts the average person manages, including emails, social channels, banking, work, and multiple crypto accounts, can start to feel overwhelming.

A robust password manager is an essential tool for anyone learning how to secure your cryptocurrency effectively. These applications generate, store, and autofill strong passwords, eliminating the need to rely on weak, easy-to-remember credentials that attackers can exploit.

By using a password manager, you reduce the risk of exposing your wallet password to keyloggers, spyware, or fake sites designed to harvest login details. The manager encrypts your login information, and many offer biometrics or a master passphrase as an added layer of security. Plus, with automatic alerts, if a site you use suffers a data breach you can respond quickly by updating credentials, dramatically reducing the chance of digital theft.

When choosing a password manager, opt for a well-reviewed, reputable service with strong encryption standards and no history of major security incidents. Integrating this tool into your daily routine isn’t just about convenience, it’s a key component of digital security. In conjunction with a proper crypto wallet and other protective steps, a password manager helps ensure that even if someone tries to gain access to your accounts, they’ll find the door locked tight.

Use 2-factor authentication (2FA)

As more people enter the crypto space in 2025, 2FA has become one of the most basic, though non-negotiable, measures for maintaining crypto security. 2FA adds a second layer of verification to your login process, making it far harder for attackers to breach your crypto account.

Even if a hacker somehow obtains your password, they must still bypass the additional verification factor in the form of a single-use code sent to a mobile device, a hardware token, or a specialized authentication app.

The most common methods of 2FA include SMS codes, push notifications, and time-based one-time passwords from apps like Google Authenticator. Enabling 2FA on your cryptocurrency exchanges, mobile wallets, and other accounts helps protect your crypto transactions, especially if you’re frequently moving funds.

This level of multi-factor authentication is critical as the crypto ecosystem matures. When combined with strong passwords and reputable wallets, 2FA becomes a powerful tool for preventing stolen or lost cryptocurrency.

Use a cold wallet

While hot wallets are incredibly convenient and offer quick access to cryptocurrency transactions, they are also connected to the internet. Cold wallets are typically seen as the gold standard when it comes to maximum security. Often embodied as hardware wallets or even a paper wallet (a printed set of private keys), cold storage methods like these all but eliminate the risk of losing crypto to a hacking attempt.

A cold wallet never exposes your private keys directly to the web. When you need to sign transactions, you typically connect your device to a computer or mobile device, authorize the transfer, and then disconnect. Because these USB device-like hardware wallets operate offline, hackers can’t simply break into your system to steal keys.

Paper wallets are generated by printing your wallet address and corresponding private keys on paper. They also stand as a form of cold storage, although they’re less user-friendly than hardware devices. Paper can be lost, damaged, or destroyed, so robust physical safeguards are necessary. Another crucial point is protection against physical theft, so consider a key vault or safe deposit box for storing your paper wallet or hardware device.

As time marches on, the best methods for securing all cryptocurrency investments that aren’t used for daily crypto trading will increasingly depend on offline solutions. From high-tech hardware wallets to paper wallets stashed in a safe, they will all help ensure that even if your online systems are penetrated, the bulk of your digital assets will remain safe and out of reach.

While they usually require more steps to move funds in and out of cold storage compared to hot wallets, the increased security and peace of mind cold wallets provide make it worth the effort. Everyday hardware wallets are also evolving to have more features, integrating screens, buttons, and firmware updates for enhanced user experiences while still retaining that core tenet of offline security.

Crypto security: Tips to protect your crypto

Beyond choosing the right wallet type or enabling two-factor authentication, it’s about cultivating a proactive mindset and adopting best-practice security measures that adapt to an ever-changing landscape of threats.

1. Regularly Update Software: Whether it’s your wallet app, operating system, or browser extensions, keeping all software current helps close security gaps and prevents attackers from exploiting known vulnerabilities.
2. Be Cautious with Public Wi-Fi: Avoid accessing your crypto account on unsecured networks. Malicious actors often target public hotspots to intercept login credentials or monitor crypto transactions.
3. Use Reputable Wallets and Exchanges: Stick to well-known cryptocurrency exchanges, hardware wallets, and wallet apps with a solid track record. This reduces the risk of encountering fake wallets or clone sites designed to trick you into revealing your private keys.
4. Double-check Wallet Addresses: Always verify that you’re sending funds to the correct wallet address. Scammers can alter or disguise addresses, resulting in lost cryptocurrency that’s almost impossible to recover.
5. Keep Secrets Offline: Never store sensitive information like seed phrases, backup codes, or private keys on devices connected to the internet. Consider writing them down and storing them in a secure, offline location.
6. Stay Informed: Join reputable online forums, follow trusted crypto news outlets, and engage with the community. Knowing about emerging threats and common scams can help you avoid pitfalls and quickly update your defenses.

Common Crypto Scams

• Phishing Scams: Phishing remains a go-to tactic for scammers. They’ll create fake sites that range from bogus exchange logins to imitation wallet interfaces, or send emails and messages that resemble official communications. These lures often encourage you to enter login details, private keys, or seed phrases. Always confirm the URL and check for non-standard or Cyrillic characters before entering any information. Plus, never share your keys online.
• Fake Wallets and Extensions: With the growing popularity of cryptocurrency wallets, fraudsters develop counterfeit apps and browser add-ons claiming to be “official” tools. Once installed, they harvest your credentials or redirect transactions to the hacker’s wallet address. Stick to reputable wallet providers with established reputations, and download apps or extensions only from trusted sources.
• Ponzi Schemes and Fake ICOs: Ponzi-style schemes and fake initial coin offerings promise unrealistic returns on your cryptocurrency investments, enticing you to deposit funds with the promise of rapid gains. However, these projects often lack real value or a sustainable model, and once the operator collects enough funds, they vanish. Conduct thorough research, verify the team’s credibility, and avoid projects that guarantee impossible returns.
• Impersonation Attacks: Scammers might pose as tech support, influential crypto figures, or even well-known brands within the crypto trading community. They’ll contact you directly, asking for account details, private keys, or urging you to send funds for “verification.” Legitimate support teams never request sensitive information, so always reach out to official channels if in doubt.
• Rogue Giveaways and Airdrops: Promises of free crypto are common bait. Bad actors set up fraudulent giveaway campaigns on social media, impersonating famous entrepreneurs, crypto exchanges, or prominent brands. They’ll ask you to send a small amount of crypto to “verify” your wallet before releasing your reward. Legitimate giveaways never ask you to send funds first.
• Malware and Keyloggers: Attackers distribute malware designed to gain access to your computer or phone, logging your keystrokes or silently redirecting crypto transactions. To prevent such infections, keep antivirus software updated, refrain from downloading suspicious files. Also, use hardware wallets or cold storage solutions to limit exposure.

Final Thoughts

With the crypto explosion continuing, the potential risks of scams to unwary or careless investors are growing right alongside. While technology evolves and security measures improve, hackers and fraudsters remain inventive, targeting newcomers and seasoned traders alike. Therefore, staying informed, adopting strong security measures, and applying a multilayered approach become essential.

Whether you’re choosing regulated exchanges, employing hardware wallets, or strengthening your passwords, these strategies work best in combination. Remember that proactive vigilance stands at the core of effective crypto security. Keep learning, adapting, and seeking trusted information sources. Most importantly, never let convenience override caution, and you’ll be well-prepared to navigate the evolving landscape of assets with confidence.

FAQs

What are two features that help make cryptocurrency secure?

Two key features bolstering cryptocurrency security are decentralization and cryptographic encryption. Decentralization means there isn’t a single point of failure. Instead, a network of computers verifies transactions, preventing any one entity from manipulating data. Meanwhile, advanced cryptography secures transaction details, keeping private keys safe from unauthorized access.

Together, these features form a foundation that’s difficult for hackers to compromise. Not only that, but blockchains record every transaction, creating a transparent and immutable ledger. This combination makes it nearly impossible to tamper with historical data.

Although no system is immune to threats, these fundamental traits help ensure your cryptocurrency remains protected as you navigate the expanding digital economy. Stay vigilant and informed daily.

What is the safest way to keep cryptocurrency?

The safest way to keep cryptocurrency typically involves using cold storage solutions, such as hardware wallets or paper wallets. Hardware wallets store private keys offline on dedicated, tamper-resistant devices, reducing exposure to hackers who target internet-connected systems. Paper wallets, though less user-friendly, keep your keys in a physical format, immune to digital attacks.

These methods ensure that even if your computer or smartphone is compromised, your funds remain secure. Combine cold storage with layered security measures such as two-factor authentication, strong passwords, and reputable wallet providers, for maximum protection. Regularly review your practices, stay informed about evolving threats, and maintain strict control over your backup materials.

What is the safest crypto wallet?

Although no single wallet can guarantee absolute security, hardware wallets are widely considered the safest option for storing cryptocurrency. Devices like Ledger or Trezor keep your private keys offline, making it nearly impossible for hackers to intercept them through online channels. These wallets often feature secure elements, PIN codes, and the ability to verify transactions via a built-in screen and buttons.

By remaining disconnected from the internet, hardware wallets minimize exposure to malware, phishing attempts, and other cyber threats. Pairing a hardware wallet with strong passwords, updated firmware, and cautious device handling can further fortify your defense. Regularly check for manufacturer updates and guidelines, and maintain careful, robust backup procedures.

Is it better to keep crypto in a wallet or exchange?

Whether it’s better to store crypto in a wallet or on an exchange depends on your priorities. A crypto wallet, especially a hardware wallet, grants you full control over your private keys and funds. This independence reduces the risk associated with centralized platforms but requires greater personal responsibility.

On the other hand, storing assets on a reputable exchange may offer convenience, built-in security features, and quicker access for trading. However, you’re relying on the exchange’s safety protocols, and events like hacks or regulatory changes could affect your holdings. Ideally, many investors split their funds—keeping a portion offline for maximum security and another portion online for immediate use, balancing both options.

Is my crypto safe on Coinbase?

Coinbase is generally regarded as one of the more secure and reputable cryptocurrency exchanges. It employs extensive security measures, insurance coverage for certain assets, and strict regulatory compliance.

They store a significant portion of customer funds in cold storage, reducing exposure to online threats. However, no centralized platform is entirely risk-free. As a Coinbase user, enabling two-factor authentication, setting strong passwords, and monitoring your account activity are vital steps. On top of that, staying informed about policy changes or unusual market events can help you make better decisions.

For long-term storage or substantial holdings, consider using a hardware wallet as a supplement to Coinbase’s established safeguards. This ensures extra valuable layers of lasting protection.

The post How to Secure Your Cryptocurrency in 2025: A Complete Guide appeared first on NFT Evening.

What is Cryptocurrency Trading?

Cryptocurrency trading involves buying, selling, or exchanging digital currencies such as Bitcoin, Ethereum, and others. Instead of trading stocks or commodities, you deal with cryptocurrencies, which are digital assets built on blockchain technology. This technology ensures secure and decentralized transactions without central authority control.

Traders engage in cryptocurrency trading to earn profits by taking advantage of changes in market prices. These trades occur on top cryptocurrency exchanges like Binance, Coinbase, or OKX. Some people trade long-term, holding cryptocurrencies to benefit from potential future price increases. Others prefer short-term trading, making frequent trades based on daily or hourly price changes.

There are different trading strategies, including spot trading, where you buy and sell the actual digital asset, and derivatives trading, which involves up to 200x leverage on major trading platforms.

Pros of Crypto Trading

• Potential for High Returns: Cryptocurrency prices can rise or fall dramatically in a short time. If you can predict price trends accurately, you have the chance to earn substantial profits.
• Non-Stop Market: Unlike traditional stock markets, cryptocurrency markets operate 24/7. This allows you to trade at any time, including weekends and holidays.
• Global Participation: Cryptocurrencies are accessible to anyone with an internet connection. You can trade on international platforms from anywhere in the world, breaking down geographical barriers.
• No Centralized Control: Because cryptocurrencies operate on decentralized networks, they are not directly influenced by government policies or central bank decisions
• Wide Variety of Tradable Assets: There are millions of cryptocurrencies available, from popular ones like Bitcoin and Ethereum to newer options like meme coins with growth potential.

Cons of Crypto Trading

• Price Volatility: The crypto market is known for its unpredictable price swings. While this volatility offers opportunities for profit, it also increases the likelihood of losses if the market turns against you.
• Limited Regulations: The cryptocurrency industry lacks the strict regulations found in traditional financial markets. This can leave traders exposed to risks like fraud or lack of legal recourse in disputes.
• Technical Issues: Problems such as exchange hacks, wallet failures, or forgetting your digital wallet’s private keys can lead to permanent loss of your funds.

How to Trade Cryptocurrency: Step-by-Step Guide

Cryptocurrency trading is easy when you know the steps. If you are a beginner, don’t worry. Follow this guide, and you can start trading today.

Step 1: Create an Account on Cryptocurrency Exchange

First, you need to create a crypto exchange account. This is like a marketplace where you can buy and sell cryptocurrencies. Some of the popular exchanges are Binance, Coinbase, Bybit, and KuCoin. In this guide, we will use Binance, one of the world’s most popular and trusted crypto exchanges, to show you how to trade step by step.

First, go to Binance’s official website or download the Binance app. Click on “Sign Up” at the top-right corner if you are using the website.

You need to provide your email address or phone number and create a strong password. Binance will also ask you to verify your account. To do this, upload a government ID like a passport or driver’s license. Once Binance confirms your identity, your account will be ready to use.

Binance is free to join, and it supports users from over 180 countries. Make sure you enable two-factor authentication (2FA) for extra security.

Step 2: Deposit Funds to Your Binance Account

After creating your account, log in to Binance. On the dashboard, click “Wallet” and then choose “Overview” and “Deposit”.

Now, deposit funds into your Binance account. Binance gives you many ways to deposit money:

• Bank transfer: You can connect your bank account and transfer money. This usually takes 1–3 days.
• Debit or credit card: Select “Buy With USD” from the top menu and pay using your card. This is instant but may have a 1.8%–4% fee.
• Crypto deposit: If you already have Bitcoin or another coin, you can send it to your Binance wallet by clicking “Deposit Crypto”.

Let’s say you deposit $100 through your card. After the deposit, your funds will show in your Fiat Wallet. You can now use this money to trade.

Step 3: Pick a Cryptocurrency to Trade

On Binance, go to the “Markets” tab on the main menu. Here, you’ll see 350+ cryptocurrencies to trade. Popular options include:

• Bitcoin (BTC): The first cryptocurrency, currently priced around $97,000.
• Ethereum (ETH): Used for smart contracts, priced at $3,600.
• BNB (Binance Coin): The native coin of Binance, priced around $660.

Binance also lists smaller coins (altcoins) like Dogecoin, Solana, and Shiba Inu. If you are a beginner, it’s better to start with larger, more stable coins like Bitcoin or Ethereum.

Step 4: Choose a Trading Strategy

Before you trade, decide how you want to trade. A strategy is like a plan that helps you know when to buy or sell. Let’s look at some common strategies:

• Crypto Day Trading: You buy and sell within a single day to profit from small price changes. For example, if Ethereum rises from $3,280 to $3,720 in a few hours, you sell to earn a quick profit. This needs constant attention.
• Swing Trading: Hold your crypto for days or weeks. This strategy works well when you expect prices to rise over time but don’t want to hold for too long.
• Scalping: This is a very fast strategy where you make many small trades in minutes or hours. You earn tiny profits from small price changes, but it needs a lot of practice. You can use crypto trading bots for this strategy.
• HODLing: This means holding crypto for months or even years. People who bought Bitcoin in 2013 for $100 and held it until 2024 made huge profits when it reached $98,000. This strategy is for patient traders.
• Arbitrage Trading: Buy a coin on one exchange at a lower price and sell it on another exchange where the price is higher. Binance’s low fees make it easier for arbitrage trading.
• Copy Trading: If you are new, you can copy professional traders on Binance’s Copy Trading feature. This lets you follow experts and mirror their trades automatically.

Choose a strategy that fits your time and experience. Never trade without a plan because crypto prices change fast.

Step 5: Make a Cryptocurrency Trade

When you log into Binance, go to the “Trade” section and choose “Spot”. You’ll see a chart showing how the price of your selected cryptocurrency has moved over time. 

Let’s say you want to trade Bitcoin. In the top-left search bar, type “BTC” and select a trading pair like BTC/USDT. A trading pair means you’re trading Bitcoin with Tether, which is a stablecoin equal to one US dollar.

You have two main order types when trading: Market Order and Limit Order. 

• A market order lets you buy or sell crypto at the current price. For example, if Bitcoin is $97,000 and you want to buy instantly, choose a market order, enter the amount (like $970 for 0.01 BTC), and click Buy BTC. 
• A limit order allows you to set the price. If you think Bitcoin will drop to $96,500, you can set this price. Your order will only be completed if Bitcoin reaches this price.

Binance also supports other cryptocurrency trading methods like 10x margin trading, 125x perpetual futures trading, and options trading.

Once you make a trade, your coins will appear in your Binance wallet. You can sell them later when the price goes up, withdraw them to a wallet, or trade them for other cryptocurrencies.

Step 6: Store Your Purchased Coins

After buying, you need to store your coins. Binance automatically keeps your coins in your account wallet, but this is only for short-term trading. For long-term holding, use a secure crypto wallet.

On Binance, you can use the Binance Trust Wallet, which is a free hot wallet. It’s easy to use but connected to the internet, so it’s less secure.

If you want maximum security, buy a hardware wallet like Ledger Nano X or Trezor Safe 5. These wallets cost around $50–$150 but are offline, so hackers can’t access them.

Crypto Trading vs. Stock Trading: The Difference

Fundamental Analysis and Technical Analysis

When trading cryptocurrency, you need to decide when to buy or sell. Two important ways to make this decision are fundamental analysis and technical analysis.

Fundamental analysis is about checking the big picture of a cryptocurrency. It’s like asking, “Why is this coin valuable?” You look at things like the purpose of the coin, the team behind it, and how it works. 

Bitcoin is valuable because it is decentralized, scarce, and widely accepted. Ethereum is popular because it supports smart contracts and many decentralized apps.

You also check news and events. For example, when big companies like Tesla or PayPal accept Bitcoin, its price usually goes up. If a country bans crypto, the price may fall. Another thing to check is the supply of the coin. Bitcoin has a maximum supply of 21 million coins, which makes it scarce and valuable. Compare this to coins like Shiba Inu, which have trillions in supply and are much riskier.

Technical analysis is different. Instead of looking at news or projects, you focus on charts and numbers. You study how the price of a coin changes over time. Binance and other exchanges have price charts where you can see trends.

In technical analysis, traders use tools like moving averages, which show the average price over a specific period, and RSI (Relative Strength Index), which tells if a coin is overbought or oversold. For example, if the RSI is above 80, the coin might be too expensive and ready to drop.

Pro Tip: Some traders use both methods together. For example, you might use fundamental analysis to pick a good coin like Ethereum and technical analysis to decide the best time to buy it. This way, you combine the long-term potential of the coin with short-term price movements to trade smarter.

Factors to Consider When Trading Cryptocurrency

• Liquidity: Liquidity means “high trading volume” or how easy it is to buy or sell a coin. Coins like Bitcoin and Ethereum have high liquidity because many people trade them. This means you can easily sell your coins at the current price. Lower liquidity results in price slippage.
• Trading Fees: Every trade has a cost. On Binance, spot trading fees are around 0.1%. If you trade cryptocurrencies a lot, these fees can add up. Some crypto exchanges charge more, especially for credit card deposits or withdrawals. Always check the fees before you trade. If you want zero-fee crypto exchange, MEXC is a great choice.
• Security: Crypto trading is not risk-free. In 2024, hackers stole over $1.2 billion worth of crypto. Use exchanges like Binance that have strong security features, like two-factor authentication. Never share your passwords, and if you’re holding crypto long-term, use a hardware wallet.
• Regulations and Taxes: Different countries have different rules for crypto. For example, some countries ban trading, while others like the USA allow it but with taxes. In the USA, you have to pay taxes on crypto profits. Know the rules in your country to avoid trouble.

Conclusion

In the end, learning how to trade cryptocurrency is not that hard if you take it step by step. Start by picking a safe crypto exchange like Binance or Coinbase, and always use a secure crypto wallet for your coins. 

It’s smart to begin small – maybe $50 or $100 – so you can learn without losing much. Remember, crypto prices can change fast, so take time to study charts, trends, and the coins you want to buy. Popular ones like Bitcoin and Ethereum are great for beginners, but smaller coins can also have big potential. 

Most importantly, never invest more than you can afford to lose. Trading crypto is about patience, learning, and staying updated on what’s happening in the market. If you’re careful and consistent, it can be an exciting way to grow your money.

FAQs

Is crypto trading easy?

Crypto trading is not as easy as it looks at first. You can’t just buy some coins and expect to make money right away. It’s learning a game – at first, it’s confusing, but you get better over time. 

Beginners often make mistakes like buying when prices are high or selling too early. It takes time to understand things like charts, market trends, and different coins. Many people lose money when they start because they don’t have a proper plan. So, while trading crypto can be exciting, it’s better to start slow and learn step by step. Practice and patience make it easier as you go.

What is the best crypto to buy now?

The best crypto to buy right now depends on what’s happening in the market and your goals. Bitcoin and Ethereum are usually safe choices because they are the biggest and most trusted. 

Bitcoin is like digital gold, while Ethereum is used for many apps and games. Some smaller coins like Solana, Cardano, or Polkadot are also popular because they have the best technologies behind them.

How to start trading cryptocurrency?

Starting with cryptocurrency trading is pretty easy if you follow the steps. First, you need to choose a reliable crypto exchange like Binance, Coinbase, or OKX. Then, sign up and verify your account with an ID. Once that’s done, add some money using a bank transfer, credit card, or another payment method. 

Before you buy anything, learn the basics about how crypto works and check which coins are trending. You can start by investing a small amount, like $50 or $100, to get the hang of it. Use beginner-friendly tools like demo accounts if available.

What are crypto pump and dump schemes?

Crypto pump and dump schemes are scams where groups trick people into buying a coin to drive up its price. It starts when a group promotes a small, cheap coin, claiming it will skyrocket. When people rush to buy it, the price rises, but only because of the hype, not real value. 

Once the price is high, the group behind the scheme sells all their coins for profit, and the price crashes. People who bought late often lose all their money. These schemes are illegal in most places but still happen in crypto because it’s less regulated.

The post How to Trade Cryptocurrency? The Beginner’s Guide 2025 appeared first on NFT Evening.

In this guide, we’ll explore exactly what crypto whales are, how they can influence markets, and how you can track their movements to stay ahead of the game. Having a clear grasp of what crypto whales are and how they impact the market is critical for anyone looking to make informed decisions in the crypto space, so let’s dive in.

What are Crypto Whales?

Crypto whales are individuals or entities that hold a significant amount of cryptocurrency, often enough to influence market prices and trends. These whales may include early adopters, institutional investors, crypto exchanges, and even blockchain co-founders. Their large holdings allow them to execute significant trades, sometimes creating artificial demand or downward pressure on specific cryptocurrencies.

Crypto whales operate across various blockchains, holding significant portions of Bitcoin, Ethereum, or other altcoins. Their actions, such as buying or selling large amounts, can cause ripple effects in the market, leading to price volatility or shifts in market sentiment. Due to their influence, tracking their trading activities has become an essential practice for smaller investors and traders seeking valuable insights into market movements,

Crypto Whales’ Influence on the Market

Crypto whales have a profound influence on the crypto market, affecting prices, liquidity, and even governance through their large-scale transactions.

Price

When a crypto whale executes a large trade, it can significantly impact the price of a particular cryptocurrency. For instance, a whale’s decision to buy a substantial amount can create artificial demand, driving prices up and encouraging smaller investors to follow suit. This phenomenon is known as whale-induced FOMO, or ‘fear of missing out’. On the other hand, dumping huge quantities of any one particular crypto can push the price down on a market-wide basis.

These price movements are particularly impactful in smaller markets or for lesser-known cryptocurrencies with limited liquidity, where a single whale’s transaction can result in dramatic volatility. By closely monitoring whale activity, traders can anticipate potential price shifts and make informed decisions. There are some tools and news sources, like Whale Alert and Unusual Whales, which help give you insights into significant trades and can help you generally stay ahead of market trends.

Liquidity

Whales are also foundational to the momentary liquidity of the crypto market. When whales hold a significant amount of cryptocurrency, they reduce the circulating supply and potentially make the crypto more scarce. This, in turn, leads to a higher degree of price volatility, and smaller investors will have a harder time executing trades under ideal circumstances without moving the market themselves.

The other side of that coin, though, is that when a whale dumps a bunch of crypto back into the market, selling off an amount like 2500 BTC for example, the global liquidity ramps up, and transactions get smoother and faster. Higher liquidity also helps to flatten out more severe price movements as well. When you look at it this way, crypto whales can help maintain substantial liquidity pools for many DeFi platforms.

Governance

In addition to price and liquidity, whales can influence the governance of blockchain networks. Many blockchains use voting mechanisms where participants’ influence is proportional to their holdings.

Crypto whales hold large quantities of cryptocurrency and can sway governance decisions, such as protocol upgrades or community fund allocations with a somewhat disproportionate ‘vote’, relative to other average users. While this influence can be beneficial for driving innovation, it can also centralize power in the hands of a few, impacting the decentralized nature of blockchain technology.

Who are the Crypto Whales?

Crypto whales encompass a diverse group of individuals and entities with substantial cryptocurrency holdings. Early adopters, like the Winklevoss twins, became prominent whales by investing heavily in Bitcoin during its infancy. Institutional investors, including companies such as MicroStrategy and Tesla, also hold significant portions of cryptocurrency, influencing market movements with their large-scale transactions.

Crypto exchanges, such as Binance and Coinbase, act as whales by managing large reserves of crypto for trading and liquidity purposes. On top of that, anonymous entities, sometimes called “wallet whales,” remain significant market participants, conducting large-scale transactions that are publicly announced or tracked on blockchain networks.

These whales can act as market movers, sparking interest in specific coins or creating trends that shape the broader crypto ecosystem. Understanding who these whales are provides valuable insights into the dynamics of the crypto market, helping smaller investors and traders stay informed.

How much crypto do you need to be a whale?

The threshold to be considered a crypto whale varies depending on the cryptocurrency and market context. For Bitcoin, holding 1,000 or more BTC often qualifies an individual or entity as a whale. With Ethereum, a whale typically owns upwards of 10,000 ETH.

These benchmarks represent significant amounts of cryptocurrency on each respective platform, giving whales the power to influence market sentiment and trading activities.

Smaller market cap coins require fewer holdings to attain whale status. For instance, holding a substantial portion of a particular cryptocurrency with limited supply can still position an investor as a whale, capable of creating price volatility or liquidity shifts.

Becoming a whale isn’t just about the amount of cryptocurrency held, it’s also about the amount of influence those holdings have on market trends. Whale status often reflects the ability to move markets and sway decisions, making these players critical to understanding the crypto ecosystem.

How Many Bitcoins to Be Considered a Whale?

To be considered a Bitcoin whale, you’d have to hold 1,000 or more BTC. This is an amount that positions you among the largest Bitcoin holders globally.

With Bitcoin’s limited supply of 21 million coins, Bitcoin wallets with such a significant quantity have the ability to impact market dynamics through large transactions. Bitcoin whales are often responsible for significant trades that create noticeable price movements.

For instance, when a whale buys or sells thousands of BTC, it can influence market participants, spark price volatility, or shift market sentiment. Tracking these whales provides valuable insights for smaller investors, helping them anticipate market trends and make informed decisions.

Wrapping Up

Crypto whales are influential players in the cryptocurrency market, shaping prices, liquidity, and governance with their significant holdings and transactions. By learning more about their impact on the greater market movements, and tracking their movements, you can stay informed, make better decisions, and hopefully see more significant gains and fewer potential losses.

FAQs

Who are the biggest crypto whales?

The biggest crypto whales include investors like MicroStrategy, which holds over 152,000 BTC, and Tesla, with significant Bitcoin reserves. Entities like the Bitcoin Foundation also rank among the largest holders, alongside anonymous wallets with substantial amounts of cryptocurrency.

How do I track crypto whales?

You can track crypto whales using tools like Whale Alert and Unusual Whales, which monitor large transactions and significant trades across blockchain networks. Even just following the latest whale news outlets can help you stay informed.

The post Crypto Whales: Who They Are and Their Impact on Markets appeared first on NFT Evening.

These are all digital assets, and they’re shaping how we share, invest, and store value today. This article will discuss what digital assets are, best types of them, and why they’re becoming essential in our modern lives.

What is a Digital Asset?

A digital asset is anything stored in a digital format that has value. It can be a file, content, or even data used for personal and professional lives. Digital assets include items like photos, videos, documents, and more. 

Today, with technology like blockchain, digital assets have expanded to include cryptocurrencies and NFTs (non-fungible tokens). For instance, Bitcoin is a type of cryptocurrency, while NFTs are unique digital items like art or music stored on a blockchain.

Types of Digital Assets

Digital assets are of many types, each serving a unique purpose in daily life or business. The first type includes simple things like photos, videos, and documents. These are often stored on your computer or in the cloud. For example, you might have pictures saved on your phone or Google Drive. 

Companies also use digital images and videos for branding. A business might upload a product video on YouTube or share its logo as a PNG file for marketing. These assets help businesses connect with people and explain what they do.

Another common digital asset is written content. PDFs, eBooks, and whitepapers are examples. Think about a user manual for your new gadget. That document is a digital asset. Businesses use eBooks or guides to share information or show their expertise. This type of digital asset is easy to store and share, which is why many companies use them for promotions.

Videos and audio files are very popular digital assets, especially on social media. A video ad on Instagram or a podcast episode are good examples. Video content can get more views and likes because people enjoy watching more than reading. In fact, about 91% of businesses use videos for marketing. This shows how powerful video as a digital asset can be.

Now let’s talk about the newer, more high-tech digital assets. These are made using blockchain technology. Cryptocurrencies, like Bitcoin, are a big part of this.

In summary, here are some best digital asset types:

• Photos
• Videos
• Audio files
• Digital documents (PDFs, Word files)
• Logos
• eBooks
• Spreadsheets
• Presentations (e.g., PowerPoint)
• Infographics
• Digital artwork
• Website designs (HTML, CSS files)
• Social media posts
• Online courses
• Virtual reality (VR) content
• Cloud-stored backups or files

Why are Digital Assets important?

Digital assets are changing how we create, store, and use value. Here’s why they matter:

1. Accessibility: Digital assets can be used and shared worldwide, allowing anyone with internet access to participate.
2. Transparency: Blockchain-based assets record all digital asset transactions in the public. This means you can track ownership and ensure authenticity.
3. New Opportunities: Assets like cryptocurrencies and NFTs open new investment avenues. For instance, people can buy small shares of expensive assets, like real estate, using tokens, or trade digital assets like BTC.
4. Efficiency: Digital form saves time and resources compared to physical alternatives. Sending a digital contract is faster than mailing a printed one.

Digital Assets Examples

#1. Photos

Photos are among the most common digital assets. They can be personal, like family pictures stored on your phone or cloud storage, or professional, such as images used by businesses in advertisements or websites.

Most digital media files are saved in formats like JPEG or PNG. JPEG files are widely used because they are smaller in size, making them easier to share, while PNGs are preferred for images requiring transparency, such as logos. For individuals, digital photos serve as a way to preserve memories. Platforms like Google Photos or Apple iCloud allow people to safely store thousands of images. For businesses, photos are critical for marketing and branding.

For example, an online store like Amazon relies on high-quality product photos to attract buyers. Even social media platforms like Instagram and Pinterest thrive on sharing digital photos. A professional photo can make a huge difference in attracting an audience or conveying a message.

#2. Videos

Videos have become a vital digital asset, especially in today’s world where online content is king. Every minute, people upload over 500 hours of video to platforms like YouTube. 

These digital assets can include everything from educational content and promotional material to personal vlogs and entertainment videos. Popular video formats include MP4, MOV, and AVI, each suited for different purposes.

For individuals, videos capture important moments, like weddings or trips, and can be stored on platforms like Google Drive or Dropbox. Platforms like TikTok, Instagram, and YouTube have made video-sharing easier than ever, helping brands connect with audiences.

The rise of online learning has also increased the demand for videos. Schools and professionals use videos for tutorials, webinars, and lectures. As high-speed internet becomes more accessible, the use of videos as digital assets will only grow.

#3. Audio/Music

Audio files and music are essential digital assets used in entertainment, education, and even business. Formats like MP3, WAV, and AAC are widely used for storing and sharing sound files.

Music is a form of entertainment and expression. People store playlists, podcasts, and audiobooks on their devices or access them through online platforms. For businesses, audio files are used in advertisements, jingles, and branding. A catchy audio logo, like Intel’s “ding-ding-ding”, is a memorable example of how sound can strengthen a brand.

Audio assets also play a major role in industries like gaming and film, where sound effects and background scores are critical. In education, audio files are used for language learning apps or audiobooks. As technology evolves, audio digital assets are becoming more interactive and immersive, like in virtual reality (VR) environments.

#4. Cryptocurrency

Cryptocurrency is a revolutionary digital asset that serves as a medium of exchange, much like traditional money but entirely digital. Bitcoin, introduced in 2009, was the first virtual currency and remains the most popular. As of 2024, over 500 million people worldwide own cryptocurrencies, and the market is valued at more than $3.2 trillion.

One of the biggest appeals of crypto assets is its global accessibility. A person in one country can send digital currency to another without the need for a bank. However, cryptocurrencies are highly volatile. For example, Bitcoin’s value can swing by thousands of dollars in a single day, making it both exciting and risky for investors.

#5. Non-Fungible Tokens

Non-fungible tokens, or NFTs, are unique digital representation of ownership of specific items, such as artwork, music, or virtual real estate. Unlike cryptocurrencies, which are interchangeable, NFTs are one-of-a-kind. For example, the digital artwork “Everydays: The First 5000 Days” sold for $69 million in 2021, making it one of the most expensive NFTs ever.

NFTs are stored on blockchain technology, ensuring their authenticity and preventing duplication. They are popular among artists and creators because they allow them to monetize digital work directly. Buyers of NFTs gain ownership rights, though the actual file (like a digital image) may still be viewable by others.

NFTs have extended beyond art into gaming and entertainment. In virtual worlds like Decentraland, people can buy virtual land as NFTs. While the market is still new, it has grown significantly, with billions of dollars traded in NFT marketplaces like OpenSea.

#6. Tokenized Assets

Tokenized assets are a new type of digital asset where real-world items, like property or stocks, are converted into digital tokens on a blockchain. This allows people to own fractions of expensive assets. For instance, instead of buying an entire building, you can own a small part of it through tokens.

This system makes investments more accessible. In 2024, the global market for tokenized real estate was valued at $3.5 billion. Tokenized assets are also used in art, cars, and even rare collectibles. These tokens can be traded online, providing liquidity to otherwise illiquid assets.

Blockchain ensures the security and transparency of these tokens. As more industries adopt this technology, tokenized assets are expected to transform the way we invest and trade.

#7. Central Bank Digital Currencies (CBDCs)

Central Bank Digital Currencies, or CBDCs, are digital versions of national currencies issued by governments. Unlike cryptocurrencies, CBDCs are regulated and backed by central banks. 

For example, China launched its digital yuan, while countries like the U.S. and India are exploring their versions.

CBDCs offer the convenience of digital transactions while maintaining the trust of traditional money. They can make payments faster, reduce transaction fees, and improve access to financial services. Governments also benefit by gaining better control over monetary policies.

However, CBDCs raise privacy concerns, as governments could potentially track all transactions. Despite this, they are seen as the future of money. This blends the benefits of digital assets with the stability of national currencies.

Conclusion

In a nutshell, digital assets have become a vital part of our lives, whether you are an individual, a business owner, or an investor. From photos and videos that capture memories to advanced blockchain-based assets like cryptocurrencies and NFTs, they are all around us. They save time, bring convenience, and open doors to innovative possibilities. 

These assets are not just about storing information or making transactions easier. They are reshaping industries like education, entertainment, and real estate. Even governments are joining the trend with Central Bank Digital Currencies (CBDCs). The digital world is growing fast, and understanding these assets is key to keeping up with modern technology.

While digital assets offer many opportunities, they also come with challenges. Security and storage are important concerns. Managing them safely ensures they remain valuable and accessible.

FAQs

How to invest in digital assets?

Investing in digital assets is now easier than ever. If you are interested in cryptocurrencies, you can use top crypto exchanges like Bybit, Binance, or OKX. These platforms let you buy, sell, and trade coins like Bitcoin or Ethereum. You will need a digital wallet to store them securely. Some wallets are software-based, like MetaMask, while others are hardware devices like Ledger Nano X.

For NFTs, you can explore platforms such as OpenSea or Rarible. These marketplaces allow you to buy unique digital art, music, or collectibles. Traditional digital assets like videos, eBooks, or images can also be investments. For example, you can sell stock photos or monetize videos on YouTube. The key is understanding which assets align with your goals and choosing the right platform to get started.

What is the difference between crypto and digital assets?

Many people think crypto and digital assets are the same, but they are not. Cryptocurrency is just one type of digital asset. It includes digital currencies like Bitcoin, Ethereum, and Litecoin, which are mainly used for transactions or investments. Cryptocurrencies are based on blockchain technology, which ensures security and transparency.

On the other hand, digital assets cover a much broader range. These include things like photos, videos, documents, and even NFTs. For example, a video on YouTube or an image stored on Google Drive is a digital asset, but it is not cryptocurrency. Blockchain-based assets like NFTs and tokenized real estate also fall under the digital asset category.

In simple terms, all cryptocurrencies are digital assets, but not all digital assets are cryptocurrencies.

Where are digital assets stored?

Digital assets are usually stored on digital platforms or devices, depending on the type. For example, photos and videos are often stored in cloud services like Google Drive, Dropbox, or iCloud. These platforms allow easy access from any device with an internet connection. Personal devices, such as smartphones, tablets, or computers, are also common storage places for documents, images, and audio files.

Blockchain-based assets like cryptocurrencies and NFTs are stored in digital wallets. These crypto wallets can be software-based, such as Trust Wallet or MetaMask, or hardware wallets, which look like USB drives. Hardware wallets, like Ledger or Trezor, are safer because they are offline and harder to hack.

For businesses, managing digital assets is more organized. Companies often use Digital Asset Management (DAM) systems. These platforms help store and manage large libraries of images, videos, and files securely.

The post What is Digital Asset? Best Digital Asset Examples appeared first on NFT Evening.

There are different ways to make money, like mining, staking, and even playing games where you earn crypto. It might sound confusing at first, but once you understand the basics, it gets easier. In this guide, we’ll look at some simple ways you can start making money with cryptocurrency and what you should watch out for.

7 Best Ways to Make Money With Cryptocurrency

1. Yield Farming

Yield farming is earning interest on your money but using crypto instead. You deposit your digital assets in liquidity pools on decentralized exchanges like Uniswap or PancakeSwap. These pools help traders swap tokens. For letting your crypto sit there, you earn rewards in the form of extra crypto or fees.

For example, if you deposit $1,000 worth of Ethereum and USDT into a pool, you might earn an annual percentage yield (APY) of 4% to 10%. That means you could earn $40 to $100 in a year. Higher-risk pools sometimes offer even higher rewards, like 100% or more, but the risk of losing money is big too.

In 2024, the total value locked (TVL) in DeFi protocols reached over $110 billion, showing how popular yield farming is. If you’re starting, choose well-known platforms like Uniswap or Aave to reduce risks.

2. Mining

Crypto mining was the first way people earned Bitcoin. It involves solving complex math problems to verify transactions on the blockchain. For this, miners get rewards in Bitcoin or other coins.

Mining Bitcoin used to be simple. In 2010, you could mine using a regular PC and earn several bitcoins daily. Now, you need specialized hardware like ASIC miners, which can cost $2,000 to $10,000. Electricity costs are also high. For example, mining 1 Bitcoin can use 1,449 kWh, costing around $150 in countries like the U.S.

A better option for beginners is joining mining pools. These are groups of miners who combine their computing power and share the rewards. Popular pools include Slush Pool and F2Pool. Another option is cloud mining, where you rent mining power online. Be careful, though – scams are common in cloud mining.

3. Staking

Staking in cryptocurrency is a way to make passive income by locking up your crypto to support a blockchain. This process works with cryptocurrencies using the Proof-of-Stake (PoS) system, such as Ethereum, Cardano, or Polkadot.

Here’s how it works:

When you stake your coins, they are locked in a network to validate transactions and secure the blockchain. In return, you get rewards, usually in the form of more crypto. 

Some networks, like Ethereum, require a minimum amount to stake (32 ETH, which is a lot!), but smaller amounts can be staked through staking pools or crypto staking platforms like Coinbase or Binance. The rewards depend on how much you stake and the blockchain’s rules. On average, annual yields can range from 5% to 20%.

The best part about staking is you don’t need fancy equipment like miners do in Proof-of-Work systems (used by Bitcoin). It’s also more energy-efficient. Once staked, your crypto might be locked for weeks or months, so you can’t use or sell it during that time.

If you’re a beginner, centralized exchanges are easiest. They handle the technical stuff for you, but they charge fees, and there’s always a risk of hacks.

4. Play to Earn

Play-to-earn is one of the best ways to make money with cryptocurrency. It’s playing games but also earning real money while having fun. They are called play-to-earn games, where you can earn crypto coins or tokens just by completing missions, battling with other players, or building stuff in the game.

For example, games like Axie Infinity are super popular. In this game, you need to collect creatures called Axies. You battle with them, and if you win, you get a token called SLP (Smooth Love Potion). People can sell this token for real money. Some players even make up to $300 a month, which is pretty good if you’re just playing a game.

Another example is The Sandbox. It’s like Minecraft but with a twist. Here, you can create your own stuff like buildings, sell them to other players, and earn a token called SAND. Some people made thousands of dollars by selling their creations. To start, you usually need a bit of crypto to buy stuff in the game, like Axies or Land in The Sandbox. But once you start earning, it gets easier to make money without spending more.

5. Airdrop

Crypto startups use airdrops to promote their new coins and get more people involved. Airdrops are one of the top ways to make passive income with crypto. it’s getting free tokens from a new crypto project just for participating in some simple tasks or meeting specific requirements.

Here’s how it works. A project announces an airdrop and shares the steps to join. This might include things like creating an account, following them on social media, or using their platform. 

For example, some airdrops ask you to hold a certain cryptocurrency or provide liquidity on their network. Others might want you to test their features, like creating NFTs or completing trades. Once you’ve done what’s needed, they send free tokens directly to your wallet.

Many airdrops reward early adopters, which is a smart way to grow a project’s community. Big names like zkSync and Shardeum have offered airdrops, with participants gaining tokens that rise in value as the project grows. However, the rewards vary; some tokens become very valuable, while others may not hold much worth.

6. Day Trading

Day trading cryptocurrency is a way to make money by buying and selling digital coins within the same day to profit from price changes. It’s fast-paced and works best for people who can monitor the market closely. Crypto markets run 24/7, unlike stocks, so you can trade anytime.

To succeed, you need to know about market trends and technical analysis. This means using charts and tools to figure out if prices will go up or down. Many traders use indicators like the RSI (Relative Strength Index) or MACD (Moving Average Convergence Divergence) to decide when to buy or sell. 

For example, if Bitcoin (BTC) drops to $35,000 in the morning and climbs to $37,000 by noon, a trader who buys low and sells high could make a profit.

Popular strategies include “scalping”, where you aim for small, quick profits many times a day, and “range trading”, which involves buying when prices are low and selling when they hit a peak. Advanced traders might even use bots to automate trades for speed. Risk management is key, so always set a “stop-loss” to prevent big losses if the market moves against you. You’ll need a crypto exchange to start. The best day trading platforms are Binance, Bybit, and KuCoin.

7. ICOs

ICOs, or Initial Coin Offerings, are a way to invest in cryptocurrency projects. It’s a mix of crowdfunding and stock market investments, but it’s for new digital platforms or services. During an ICO, companies or crypto projects sell tokens to raise money. These tokens are not shares in the company, but if the project succeeds, their value can go up, and you can sell them for a profit.

To participate in an ICO, you usually need cryptocurrency like Bitcoin or Ethereum. You exchange this for the project’s tokens. The process happens on the blockchain, which keeps everything secure and transparent.

If you’re thinking about investing in an ICO, it’s important to research. Check the team behind the project, their goals, and if they’ve shared a detailed whitepaper explaining their idea. Some ICOs have given big profits, but there are also risks of losing all your money, especially with rug pulls.

How to Choose a Crypto Platform for Earning Passive Income?

If you want to make passive income with crypto investments, picking the right platform is very important. Here are some simple steps to help you choose the best one:

1. Check Security Features: Always pick a platform with strong security. Look for features like two-factor authentication (2FA), encryption, and insurance for your funds. Trusted platforms like Coinbase and Binance offer excellent security measures.
2. Compare Interest Rates: Different platforms offer different rewards. For example, staking on platforms like Kraken can give you annual rewards of up to 20% for certain cryptocurrencies. Lending platforms like Nexo offer varying interest rates depending on the crypto type.
3. Understand Fees: Some crypto platforms charge high fees for transactions or withdrawals. Ensure you review these charges before committing. Lower fees mean more earnings in the long run. MEXC is best for zero-fee crypto trading.
4. Look for Reputable Platforms: Stick to well-known platforms like Binance, Bybit, or Aave. These have been around longer and are less likely to have issues like fraud or sudden shutdowns.
5. Check Supported Cryptocurrencies: Make sure the platform supports the coins you want to use. Not all platforms support every cryptocurrency.
6. Read User Reviews: Look for honest reviews online or in forums. See if other users have had good experiences with the platform.
7. Ease of Use: If you are a beginner, go for user-friendly platforms. Crypto apps like Binance and OKX are simple and easy to navigate, making them great for new users.

What are the Risks of Crypto Passive Income?

• Price Volatility: Cryptocurrencies are known for their wild price swings. For example, Bitcoin’s price dropped from over $60,000 in 2021 to below $20,000 in 2022. This means if you’re earning passive income by staking or lending crypto, the value of your earnings could drop quickly.
• Scams and Fraud: There are many fake platforms out there that pretend to generate passive income opportunities. Always double-check the platform’s reputation and reviews.
• Uncertain Regulation: Governments around the world are still figuring out how to regulate cryptocurrency. In some countries, cryptocurrencies are banned or heavily regulated, which can affect the platforms that offer passive income options.
• Technical Complexity: Some crypto passive income methods, like running a masternode, require a lot of technical knowledge. If you don’t know how to set it up or manage it, you could end up losing money.
• Impermanent Loss: This happens when you provide liquidity to a pool, and the value of your crypto assets changes compared to when you first put them in.

Conclusion

To sum up our guide on how to make money in crypto, it can be done in different ways like yield farming, mining, staking, and even playing games. But it’s not without risks, such as price swings and scams. 

If you want to earn passive income, you should pick a trusted platform, check the fees, and understand how the system works. While some people have made good money, it’s important to know that things can change quickly in the crypto world.

FAQs

Is crypto safe?

Crypto can be risky. While the technology behind it, like blockchain, is secure, there are still risks involved. It depends on how you use it. Hackers can steal your crypto if you don’t store it in a secure wallet. In 2024, crypto scams cost people over $1.4 billion! That’s huge, right? Also, the prices of crypto like Bitcoin can change very fast. One day it’s up, and the next day it’s down.

Always use trusted apps and wallets Ledger or Trezor. Never share your private keys with anyone. If you’re careful, crypto can be safer, but it’s never risk-free.

Can I get rich with cryptocurrency?

Yes, it’s possible to get rich with cryptocurrency, but it’s not easy. Some people have made a lot of money, especially early investors in Bitcoin, Ethereum, or other altcoins. For example, Bitcoin went from less than $1 in 2010 to over $90,000 today. During the bearish market in 2022, if you bought Bitcoin at $60,000 and sold it at $20,000, you would lose a lot. Most rich crypto investors are patient and hold their coins for years. Some also trade, but trading is risky if you don’t know what you’re doing.

Is passive income from crypto taxable?

Yes, in most countries, it is taxable. If you earn crypto by staking, mining, or lending, that’s called passive income. For example, staking Solana or Ethereum gives you rewards. In the U.S., the IRS taxes digital currency rewards as income. You might pay 10%, 20%, or even more, depending on your total income. If you’re in India, you could pay a 30% tax on all crypto earnings. Always keep a record of how much crypto you earn.

The post How to Make Money with Cryptocurrency? The 2025 Guide appeared first on NFT Evening.

In this guide, you’ll learn what makes cryptocurrency different, how it works, and how to buy and sell these crypto assets on cryptocurrency exchanges.

What is Cryptocurrency?

Cryptocurrency is a digital money that only exists online. Unlike cash you can hold, cryptocurrency works on the internet. Bitcoin and Ethereum are two of the most famous examples, but there are over 10,000 legit cryptocurrencies out there today. What makes these digital currencies unique is that they don’t rely on financial institutions or the government. 

Instead, they work on “blockchain”, a type of public database that record transaction (like a receipt) to keep track of who owns what. This way, crypto transactions can happen directly between traders without any middleman.

How does cryptocurrency work?

The core of how cryptocurrency works is through the blockchain and cryptography. Cryptography is a type of coding that secures each transaction. When you send cryptocurrency, a complex code is created to lock that transaction so only the person who has the “private key” can unlock and access the funds.

Cryptocurrency transactions are verified by “miners”, who are people (or computers) solving tough math problems to confirm that each transaction is legit. For their work, miners are rewarded with new cryptocurrency coins. This process is called “cryptocurrency mining”. It’s a bit like how people get rewarded for finding gold in real life – except these miners are using computer power to find virtual coins. You can also read our guide on how to mine Bitcoin.

Types of Cryptocurrency

Bitcoin (BTC)

Bitcoin is the first and most popular cryptocurrency. It was created in 2009 by a person or group called Satoshi Nakamoto. Bitcoin is a digital cash that you can send over the internet to anyone, anywhere in the world. 

People like BTC because it’s decentralized, meaning no single company or government controls it. Instead, it uses blockchain technology. The total number of Bitcoins is limited to 21 million, so there will never be more than that. 

Because of this limit, investors often think Bitcoin is like “digital gold” and believe its value might go up over time as demand increases and supply stays the same. Bitcoin transactions can be slow and expensive sometimes, but people still like it for its security and the fact that it was the first of its kind.

Utility Tokens

Utility tokens are a type of cryptocurrency used to pay for services or products on specific platforms. These tokens are not meant to be an investment like Bitcoin, but instead, they let you do certain things on the platform that created them. 

For example, Ethereum is one of the most popular platforms with its own utility token called Ether (ETH). People use Ether to pay for transactions or run applications on the Ethereum network. Another example is Binance Coin (BNB), which is used to pay for transaction fees on the Binance exchange, giving users discounts. 

Utility tokens usually have a purpose within their own platform or ecosystem, so they are valuable to people who want to use that platform’s services.

Governance Tokens

Governance tokens are cryptocurrencies that give people a voice in how a platform or project is run. If you own a governance token, you can vote on important decisions, like updates or changes to the project. 

These tokens are usually linked to decentralized finance (DeFi) platforms, where there is no central authority making decisions. Instead, the people who own governance tokens help make those choices. 

An example of a governance token is Maker (MKR), which lets holders vote on changes to the MakerDAO platform. Another example is Uniswap (UNI), a token that lets people vote on how the Uniswap decentralized exchange works.

Metaverse Tokens

The metaverse is like an online universe where people can work, play, and socialize in 3D spaces. Metaverse tokens allow people to buy land, avatars, and other digital items within these virtual worlds. 

Some popular metaverse tokens include Decentraland’s MANA and The Sandbox’s SAND. In Decentraland, people can use MANA to buy digital land, build on it, and interact with other users. The idea behind metaverse tokens is to create a new kind of economy within virtual worlds.

GameFi

GameFi, or “game finance”, is a new concept that combines gaming with finance. In GameFi, people can earn cryptocurrency by playing video games. These games usually use blockchain technology, which allows players to truly own in-game items like characters, weapons, or land. 

In GameFi, items won or bought by players are stored on the blockchain, so players can trade or sell them, even outside the game. An example of a GameFi project is Axie Infinity, a game where players collect and battle creatures called Axies. 

The Axies are NFTs, so each one is unique, and players can sell them on the marketplace. The tokens in these games, like Axie Infinity’s AXS and SLP, have real value, and people can trade or sell them just like any other cryptocurrency.

Decentralized Storage

Unlike traditional cloud storage, where companies like Google or Amazon control the data, decentralized storage spreads data across a network of computers, called nodes.

One popular decentralized storage project is Filecoin, where people can earn FIL crypto tokens by offering up their computer’s storage space. Another project is Storj, which works similarly, letting people rent out their extra storage space in exchange for tokens.

How to buy cryptocurrency?

Here’s a simple step-by-step guide on how to buy cryptocurrency.

1. Pick a Crypto Exchange: To buy cryptocurrency, start by choosing a reliable exchange, which is an online crypto trading platform where you can buy, sell, and hold crypto. The best crypto exchanges include MEXC, Binance, and KuCoin. These crypto exchanges are well-known for being secure and user-friendly, especially for beginners.
2. Create an Account: Once you’ve chosen an exchange, you need to create an account. Sign up by providing an email address and setting a password. Most exchanges require you to verify your identity by uploading a photo ID (like a driver’s license or passport) and sometimes additional proof of address, like a utility bill. This verification can take anywhere from a few minutes to a few days depending on the platform.
3. Link Your Payment Method: After your account is verified, connect a payment method. Most exchanges let you pay with bank transfers, debit or credit cards, and sometimes even mobile payment apps like Apple Pay or Google Pay. Check with your bank for any additional fees, as some banks charge extra fees for crypto transactions.
4. Choose a Cryptocurrency to Buy: Go to the “Buy” section of your exchange. You’ll see a list of available cryptocurrencies, like Bitcoin, Ethereum, or Litecoin. Select the one you’re interested in buying. You don’t need to buy a whole coin; most platforms allow you to purchase fractions, so you could start with as little as $10 or $20.
5. Enter the Amount and Review Fees: After choosing your cryptocurrency, enter the amount you want to buy. Be aware of any transaction fees—these vary by exchange and payment method. Some platforms may charge extra for credit card purchases. The standard fee for most crypto exchanges is 0.1% maker/taker.
6. Confirm and Buy: Once you’re ready, click “Buy” or “Confirm Purchase”. This will complete the transaction, and you’ll now own your selected cryptocurrency. The coins will appear in your account’s wallet, a secure area on the exchange that holds your crypto for easy access.

How to store cryptocurrency?

Storing cryptocurrency safely is super important if you don’t want your digital currency to get stolen or lost. There are several ways to keep your crypto safe, and each way has pros and cons.

1. Hot Wallets

A hot wallet is a digital wallet that’s always online. It can be on your computer, phone, or even an app. Hot wallets are quick to set up, easy to use, and perfect for people who need to access their crypto regularly, like for trading or buying digital assets online. But since they’re connected to the internet, they’re not the safest option because they’re vulnerable to hacking.

Examples of hot wallets to store cryptocurrencies:

1. Trust Wallet: It’s free and supports thousands of cryptocurrencies on 100+ blockchains. It also lets you trade crypto right inside the app.
2. Mycelium: This mobile wallet has been around for a long time, especially for Bitcoin, and is known for being user-friendly.

Pros: Easy to access and use, great for daily transactions.

Cons: Higher risk of hacks since it’s online.

Check out our detailed guide on the best crypto wallets to store digital currencies.

2. Cold Wallets

Cold wallets keep your cryptocurrency offline, which makes them way safer from online hackers. These wallets are usually used by people who want to hold onto their crypto for a long time without touching it often. Since cold wallets are not connected to the internet, hackers can’t access them unless they physically get ahold of the wallet.

Types of cold wallets to store crypto coins:

• Hardware Wallets: These are physical devices like USBs where you store your crypto offline. When you want to make a transaction, you plug it in and enter your code. The best crypto hardware wallets are Ledger Nano X and Trezor Model T. They cost around $50 to $200, but they’re super secure.
• Paper Wallets: A paper wallet is basically a printed piece of paper with your crypto’s public and private keys on it. You keep this paper somewhere safe, like a locked drawer. But if you lose it or it gets damaged, you could lose all your funds, so it’s risky.

Pros: Very secure and good for storing large amounts of crypto long-term.

Cons: Hardware wallets can be expensive, and paper wallets can be easily damaged or lost.

3. Custodial Wallets

With custodial wallets, a third party (like a crypto exchange) holds your crypto for you. You don’t control the private keys directly; the platform does. This setup is similar to a central bank, where they keep your money safe and handle the security. 

These wallets are handy if you don’t want to worry about losing your private keys, but if the exchange gets hacked or goes insolvent, your funds could be at risk.

As discussed above, some of the best crypto exchanges are Binance, Bybit, KuCoin, MEXC, OKX, and Coinbase.

Pros: Good for beginners who aren’t confident in handling security.

Cons: You have less control over your crypto; relies on the exchange’s security.

Risk of Investing in Cryptocurrency

Investing in cryptocurrency can be super exciting because prices can rise fast, but it’s also really risky. If you’re thinking about crypto, here are some big risks to consider:

• Price Volatility: Crypto prices are extremely unpredictable. They can jump up quickly or drop even faster. For example, when Elon Musk tweeted about Bitcoin, its price either shot up or plunged within hours. Because there’s no fixed value or steady income tied to crypto, it’s common to see big gains but also huge losses in short periods.
• Lack of Regulation: Unlike banks or the stock market, crypto exchanges don’t have strict rules. So, if something goes wrong – like an exchange shutting down or hacking incidents – there may be no way to get your money back. Some exchanges, like Coinbase, have even paused trading during market crashes, which prevented people from selling when they wanted to.
• Security and Scams: Cryptocurrencies rely on digital wallets, which are secure if used correctly. But scammers are always looking for ways to steal crypto, whether by fake wallet apps, phishing links, or hacking attempts. Also, if someone gets access to your private key (like a password for your wallet), they can drain all your crypto, and it’s almost impossible to recover.
• Liquidity Issues: Some smaller or newer cryptocurrencies might not be easy to sell when you want to. If too many people try to sell at once, the value can drop fast, or there might not even be buyers at the price you want, meaning you could lose out on cashing in​.
• Leveraged Trading Risks: Some exchanges offer “leverage”, where you can invest more than you have by borrowing. While it seems like a great way to make more money if the price goes up, the downside is severe. If prices drop even a bit, you could lose more than you invested because you still owe the exchange the money you borrowed.

Conclusion

In conclusion, cryptocurrency is digital money that works without banks or governments controlling it. It’s built on blockchain, which is like a secure online ledger that records every transaction. 

Cryptocurrencies like Bitcoin, Ethereum, Litecoin, USDT, and many others can be used to buy things, send money, or even invest. For others, though, it’s an exciting new way to handle money. As more people start using crypto, its future is still being shaped. Cryptocurrency might become more common or stay something unique. Only time will tell.

FAQs

Is Cryptocurrency a good investment?

Yes, cryptocurrency is a good investment, but it’s also risky. Some people have made big profits with crypto because the value of certain coins, like Bitcoin and Ethereum, has gone up a lot over the years.