Crypto and Life
Crypto and Life cannot be seperated in our day anymore. As it is the most popular and also the most controversial term, Cryptocurrencies has changed our life, and we can’t even talk about looking back at it anymore. To examine and to predict the life with Crypto, is crucial for everyone in our societies all around the world, but to understand Crypto and Life relations, we have to dig deeper and have a look at different terminologies and different meanings that underlie within the consept.
What is Airdrop?
Airdrop is a marketing method that involves sending tokens or coins to wallet addresses to raise awareness of a new cryptocurrency. In this method, users are sent small amounts of tokens or coins for free in exchange for various small services, such as sharing a tweet about that cryptocurrency.
In addition to cryptocurrencies, NFT products, which are actually non-exchangeable tokens, can also be airdropped. Many NFT collections are airdropped today.
The purpose of the airdrop method is mostly to promote a new cryptocurrency. With airdrops, it is aimed to deliver a cryptocurrency to more people. From time to time, blockchain-based service providers such as cryptocurrency exchanges or wallets may also use the airdrop method to reward their loyal customers.
Airdrops are usually promoted on the company’s website, cryptocurrency forums or social media. To take advantage of airdrops, you must have a cryptocurrency wallet address.
What are the Types of Airdrops?
Airdrops can be roughly divided into types under four headings: Award airdrops, standard airdrops, holder airdrops, and hard fork airdrops.
In prize airdrops, cryptocurrency is awarded in exchange for the participant’s services, such as posting on social media or tagging friends in a post. Prize airdrops may also be distributed as a result of a draw.
Standard airdrops are types of airdrops where the user can easily register by entering their first and last name or email address. The purpose of these airdrops is usually to create a large user information network.
Holder airdrops require the participant to have a certain amount of the corresponding cryptocurrency in their wallet in order to be eligible for the airdrop. This airdrop aims to reward token holders.
Finally, hard fork airdrops are issued for forked coins. These coins are airdropped to original coin holders.
Where are Airdrops Tracked?
So where and how are the airdrop dates and methods tracked?
You can follow current airdrops on social media and cryptocurrency forums, as well as websites that show airdrop calendars. On these websites, you can find out when, which airdrops will take place, and under what conditions. At the same time, cryptocurrency exchanges can announce the current airdrops on their websites.
You can sell the cryptocurrencies you buy with Airdrop later on reliable cryptocurrency exchanges.
What’s Altcoin?
Altcoin, also known as alternative coin, is a term used to describe digital currencies other than Bitcoin. Every Cryptocurrency that exists apart from Bitcoin can qualify as altcoin.
Namecoin (NMC) was the first altcoin to be released after the success of Bitcoin. Although Bitcoin, the first cryptocurrency, dominated the majority of the cryptocurrency market for a long time, its market share decreased with the increase of altcoins. As of March 2021, there were almost 9,000 cryptocurrencies on the market. Altcoins accounted for more than 40% of the total cryptocurrency market in March 2021.
Because many of them are derived from Bitcoin and the leading cryptocurrency is bitcoin, altcoin price movements tend to mimic those of Bitcoin. However, analysts say that the maturity of cryptocurrency investment ecosystems and the development of new markets for these cryptocurrencies will make altcoins’ price movements independent of Bitcoin’s trading signals.
What is the Difference Between Bitcoin and Altcoin?
Bitcoin is the first example of a cryptocurrency, and its philosophy and design sets the benchmark for the development of other digital currencies. However, its application has some shortcomings. For example, Proof-of-Work (PoW), the consensus mechanism used to create blocks, is energy-intensive and time-consuming. Bitcoin’s smart contract capabilities are also limited.
Altcoins improve the limitations experienced by Bitcoin to provide a competitive advantage. Several altcoins use the Proof-of-Stake (PoS) consensus method to minimize the time and energy consumption required to create blocks and verify new transactions.
Another example is Ether, the world’s second largest cryptocurrency by market capitalization, used as gas (or payment for transaction costs) in smart contracts on Ethereum. Altcoins also address traditional criticisms against Bitcoin. For example, stablecoins do not show Bitcoin’s price volatility, making them ideal tools for day-to-day transactions.
Altcoins have created a market for themselves by separating themselves from Bitcoin in this way. As a result, this has attracted investors who see its potential as an alternative to Bitcoin. Hence, investors expect to profit as altcoins gain more attention and users and gain value in price, which can highly affect you, and change your opininons about both Bitcoin, and Crypto and Life.
Blockchain system is not dependent on any center or person. Blockchain system is made by devices that have adapted to this system. Transactions are made by these anonymous devices and are completely closed to outside interference.
How Does Blockchain Work?
Blockchain distributes all the data of other internet systems to multiple devices or computers instead of collecting all the data in one center. Thus, it prevents all external interventions to these data.
Blockchain database is open to everyone, not just its users. Thus, the control is transparent. Anyone can check the transactions, wallet addresses, Transaction ID (shipping code) and amounts registered in a block.
The wallet addresses of all users of the blockchain system are recorded by the blockchain as the transaction is made, and repetitive transactions are prevented.
Within the system of Blockchain, every transaction performed has a cryptographic counterpart in the blockchain network, and when the transactions fill the blocks, it creates a new block. These blocks are linked to each other and each new block contains the codes of the previous blocks.
As this process is repeated, an inter-block chain is formed. When one of the blocks is completed, it creates a “Hash” code and the next block starts to create a new block based on this “Hash” code. Thanks to this “Hash” code, creating a duplicate block is prevented.
Asset sending transactions made over the blockchain are both cheaper and faster than transactions with banks. The submission you initiate from your wallet is processed to the blockchain network. A Transaction ID code is generated for your transmission, which contains your wallet address, recipient wallet address and amount details.
With this code, you can track your shipment. With the Transaction ID code, you can find all the details of your transmission on the blockchain network. You can find details such as the recipient wallet, the sender wallet, the amount, how many confirmations it has received, which block it is in, and the fee you will pay, thus, affecting your Crypto and Life investment.
What are the Advantages of Blockchain System?
The advantages of the blockchain system are generally grouped under five main headings:
The fact that it is not connected to any center or person allows transactions to be done safely, cheaply and quickly.
Controlling all transactions on the blockchain prevents interference and fraudulent actions on the system.
Keeping all the data related to the blockchain network scattered on many devices prevents all attacks that may come from the outside and offers a secure system.
Since it is based on a mathematical formula and works automatically, there is no possibility of error.
The fact that the devices included in the blockchain system are scattered prevents any intervention in the system and offers transparency.
What is “DeFi”?
DeFi is the general name given to decentralized financial transactions consisting of the words decentralized and finance. DeFi is the name given to financial structures that are not dependent on any center or authority.
Systems that are decentralized and without decision-making authorities, such as Bitcoin and Ethereum, are ideal examples of DeFi. However, since financial instruments are not limited to sending and receiving money, it would be correct to bring more advanced financial functions to mind when DeFi is mentioned. These include borrowing, lending, decentralized stock market, insurance, shopping, marketplace and the like. For those who enable such more advanced features, Compound (COMP), Kyber Network (KNC), 0x (ZRX), Bancor (BNT), Synthetix Network Token (SNX), Maker (MKR), Uniswap (UNI) and Aave, which have tokens on our exchange (LEND) can be counted.
DeFi structures must somehow have reassuring elements to their users. Although a decentralized structure sounds interesting, it can also be used for malicious purposes. Bitcoin DeFi structure is secured with an unbreakable and unchangeable mathematical formula.
All DeFi systems must have a cause and effect relationship. The transactions that can be made are clear and it is clear which transactions will be made under which conditions. For this reason, smart contracts, decentralized applications and consensus protocols have an important place in DeFi systems.
What’s Fork/Forking?
Forking is the splitting of cryptocurrencies into separate copies in existing blockchain networks to which they are connected. Fork is not a complete separation, but the creation of a new blockchain network by copying the same database.
Forking can sometimes be done to fix or improve a bug in the system. In some cases, the new blockchain system, which is separated from the blockchain network, can issue its own currency / token.
In order to correct some errors (speed, security, etc.) in the Bitcoin cryptocurrency, a fork took place and a new cryptocurrency Bitcoin Cash emerged.
Forking can happen for many different reasons. Forks may occur due to reasons such as the inability of the existing blockchain network to meet the demands and the disagreement among developers. In this case, two new blockchain networks and two different cryptocurrencies are created as a result of the fork.
Which of the cryptocurrencies that emerge as a result of the fork will come to the fore is a situation that is determined by the exchanges, crypto money users, miners and the market that make up the ecosystem.
Fork (forking) process is done in two different ways as “Hard Fork” and “Soft Fork”.
What is Halving?
Halving literally means halving. In mining cryptocurrencies (Bitcoin, Bitcoin Cash, Litecoin, etc.), the reward per block in mining production is halved at certain intervals.
Mining is necessary for the production of cryptocurrencies as well as for confirming transfers in the blockchain system. Ending mining or slowing transactions will affect the usability of the system.
The number of units to be produced in all cryptocurrencies produced by mining has been determined. Units cannot be produced above the specified amount. In this way, the supply-demand balance, which is the main factor in pricing the cryptocurrency, was preserved and inflation was prevented.
What is the Advantage of Halving?
Crypto and Life cannot be understood without this term. Halving is the intentional lowering of the mining reward at certain intervals when mining cryptocurrencies. There are two main reasons for this process.
Rewarding users who have believed in cryptocurrencies from the beginning. Users who believe in cryptocurrencies produced by mining and have been mining in this area since their release will receive much more block rewards than the miners who are later included in this area, as they are not affected by the halving transactions at first.
They form the basis of the network, as the mining process is necessary for the production of cryptocurrencies, as well as confirming transfers made in the blockchain system. The fact that the number of cryptocurrencies to be produced is limited, if the first block reward figures were continued, it would cause the production of all cryptocurrencies. In this case, miners will start to withdraw from the blockchain network, that is, the mining network, as there is no reward, and this will cause the system to become clogged. In order to keep miners in the blockchain network for a long time and to continue the production of the cryptocurrency, it is necessary to reduce the block reward as the number of miners increases.