Due Diligence

Risk Summary

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1. You could lose all the money you invest

- The performance of most crypto assets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in crypto assets.

- The crypto asset market is largely unregulated. There is a risk of losing money or any crypto assets you purchase due to risks such as cyber-attacks, financial crime and firm failure.

1. You should not expect to be protected if something goes wrong

- The Financial Services Compensation Scheme (FSCS) doesn’t protect this type of investment because it’s not a ‘specified investment’ under the UK regulatory regime – in other words, this type of investment isn’t recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker here.

- The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm. Learn more about FOS protection here.

1. You may not be able to sell your investment when you want to

- There is no guarantee that investments in crypto assets can be easily sold at any given time. The ability to sell a crypto asset depends on various factors, including the supply and demand in the market at that time.

- Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your crypto assets at the time you want.

1. Crypto asset investments can be complex

- Investments in crypto assets can be complex, making it difficult to understand the risks associated with the investment.

- You should do your own research before investing. If something sounds too good to be true, it probably is.

1. Don’t put all your eggs in one basket

- Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.

- A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.

For further information about crypto assets, visit the FCA’s website here.

Token Due Diligence

To ensure that any financial promotions of crypto assets are ‘fair, clear and not misleading and in accordance with the FCA Rules, Banxa will provide its customers with a due diligence summary of any crypto asset that are promoted to UK customers.

The due diligence summary will inform customers of the characteristics and the risks associated with the crypto asset(s) and may include but is not limited to the following:

- Coin

- Year Established

- Approximate number of transactions to date

- Founder

- Foundation

- Privacy

- Website

- Whitepaper

- Ease of custody (out of 10)

- Code

- Current Price

- All time high

- Market Cap

- Total Supply

- Maximum Supply

- Technology

- Consensus Mechanism

- Liquidity

- Background

- Risks (e.g. financial, technological, security, regulatory/legal, custody)

- Regulatory Status

Tokens to be offered in the UK:

- USDT

- ETH

- BCH

- BTC

- BNB

- MATIC

- XRP

- USDC

- LTC

- WBTC

- WAXP

- XLM

The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the crypto asset is suitable to your unique circumstances.

Tether (USDT)

Market Statistics

Market Statistics can be found here.

About Tether (USDT)

Tether emerged in 2014 as the one of the pioneer stablecoins. This stablecoin, symbolised as USDT, upholds a 1:1 backing by the U.S. Dollar. The main purpose of USDT is to provide a way for traders and investors to hold a crypto asset that is price-stable, reducing the volatility commonly associated with other crypto assets like Bitcoin and Ethereum. Functioning as a bridge between cash and crypto assets, USDT’s issuer, Tether Limited, asserts that the quantity of USDT circulating mirrors their holdings in U.S. Dollars. Consequently, USDT strives to maintain a value consistently hovering around 1 U.S. dollar.

Resources

Website: https://tether.to/en/

Whitepaper: https://assets.ctfassets.net/vyse88cgwfbl/5UWgHMvz071t2Cq5yTw5vi/c9798ea8db99311bf90ebe0810938b01/TetherWhitePaper.pdf

Who are the founders of Tether (USDT)?

Tether (USDT) was launched by a company called Tether Limited. The founders are Brock Pierce, Reeve Collins and Craig Sellars.

Brock Pierce, recognised for his role in both the crypto and entertainment sectors, has co-established prominent projects. In 2013, he was a co-founder of Blockchain Capital, a venture capital firm that garnered more than $80 million in funding by 2017. He assumed the directorship of the Bitcoin Foundation in 2014, a nonprofit aimed at enhancing and advocating for Bitcoin. Additionally, Pierce contributed to the founding of Block.one, the entity responsible for EOS, a blockchain and issuer of the EOS coin.

Reeve Collins led Tether as its CEO during its initial two-year phase. His prior accomplishments encompass co-founding successful enterprises, including the online advertising network Traffic Marketplace, entertainment studio RedLever, and the gambling platform Pala Interactive. As of 2020, Collins directs SmartMedia Technologies, a company specializing in marketing and advertising technology.

Craig Sellars, in addition to his involvement with Tether, has devoted more than six years to the Omni Foundation. This organisation advances the Omni Protocol, which empowers users to generate and exchange smart-contract-based assets and currencies using Bitcoin’s blockchain. Sellars has further contributed his expertise to several other crypto asset ventures and groups, such as Bitfinex, Factom, Synereo, and the MaidSafe Foundation.

How does Tether (USDT) work?

Tether (USDT) pioneered the existing fiat-supported stablecoin model and currently stands as one of the most prevalent stablecoins. While USDT operates across decentralised networks, the sole duty of creating, redeeming tokens, and safeguarding the 1:1 deposit support lies with Tether Limited. According to Tether, when new USDT tokens are issued, an equivalent sum in USD is assigned to its reserves, thereby supporting its full backing by liquid assets. Consequently, each USDT token is redeemable for a corresponding U.S. dollar held under custody by Tether Limited.

Yet, investors must be mindful that Tether’s value has occasionally deviated from its intended peg, experiencing fluctuations both above and below. These variations have been influenced by factors such as confidence in the full backing of Tethers by assets held at Tether Limited. Additionally, investors should understand that complying with Tether Limited’s know-your-customer regulations is necessary for the issuance and redemption of Tether assets including USDT.

How is the network secured?

Tether (USDT) does not have its own blockchain — instead, it is built on various blockchains including Algorand, Avalanche, Ethereum, EOS, Liquid Network, Near, Omni, Polygon, Solana, Bitcoin Cash’s Standard Ledger Protocol, Statemine, Statemint, Tezos, and Tron and is secured by their respective consensus protocols.

Storage

Just like other crypto assets, it’s crucial to understand the ways to securely store your Tether (USDT). Broadly speaking, there are two main types of crypto wallets for safeguarding your digital assets: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your USDT, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Underlying reserves

Over the years, Tether Limited’s transparency has been questioned due to the lack of regular and comprehensive audits of its reserve holdings. The company’s limited disclosure of its financial practices and reserve holdings has led to suspicions about the actual backing of USDT tokens and contributed to uncertainty within the crypto community. Without proper auditing, investors have limited visibility into the backing of USDT. If Tether Limited were to face financial difficulties, insolvency or have banking difficulties, there may be a liquidity risk associated with a lack of funds to redeem USDT tokens, potentially causing a loss in value for holders.

Regulatory environment

The stablecoin market has been subject to increased regulatory attention globally. Regulatory agencies are apprehensive that stablecoins such as USDT could affect financial stability and might be exploited for illegal purposes like money laundering and fraud. The simplicity of their use and ability to transcend borders contribute to these concerns. Regulatory actions could impact the operations and value of USDT.

Market sentiment

While USDT is designed to maintain price stability, there could still be price fluctuations, especially if the underlying reserves are not as stable as expected or if market sentiment changes.

Technology or security risks

Like any blockchain-based asset, USDT could be vulnerable to technical risks, including hacks, smart contract vulnerabilities, and software bugs that could compromise the security and integrity of the stablecoin. These issues could lead to financial losses or a loss of confidence in USDT.

Competition

USDT faces competition from other stablecoins. A shift in preference towards alternative stablecoins could affect the demand for USDT.

Dependence on Tether Limited

Regulatory actions against Tether Limited could impact the issuance and operation of USDT.

Ethereum (ETH)

Market Statistics

Market Statistics can be found here.

About Ethereum (ETH)

Ethereum, established in 2013, is a decentralised blockchain platform that empowers developers to create their own decentralised applications (dApps). These apps serve various purposes like finance, gaming, and supply chain management and rely on self-executing smart contracts when the terms are met, eliminating the requirement for both parties to identify each other or involve intermediaries. Ethereum pioneered the concept of smart contracts in the industry. Ethereum employs its native currency, Ether (ETH), to power smart contracts and transactions. ETH is used to pay transaction or “gas” fees on the blockchain, issue new Ethereum tokens and even in peer-to-peer payments.

Resources

Website: https://ethereum.org/en/

Whitepaper: https://ethereum.org/en/whitepaper/

Who are the founders of Ethereum (ETH)?

Vitalik Buterin, a Russian-Canadian programmer, conceived Ethereum after experiencing the impact of centralised control in a video game. He envisioned a decentralised digital network for developers to create applications interacting with digital currencies. Before Ethereum, he co-founded Bitcoin Magazine, an early Bitcoin publication.

In 2014, Buterin released the Ethereum whitepaper, launching the project in 2015 with the genesis block on July 30. His vision attracted like-minded co-founders, including Gavin Wood, Joseph Lubin, Anthony Di Iorio, and Charles Hoskinson, who established the Ethereum Foundation.

The Foundation supports Ethereum’s development and ecosystem growth, funding and overseeing core software. Jeffrey Wilcke, Amir Chetrit, and Mihai Alisie also contributed, but only Buterin remains from the original eight co-founders.

How does Ether (ETH) work?

Smart contracts form an essential part of Ethereum’s framework and smart contract execution happens within Ethereum’s built-in computer, the Ethereum Virtual Machine (EVM). This computation incurs a cost, payable using Ethereum’s native digital currency, ether (ETH). For using the Ethereum network or apps, a fee in ETH is required. This fee incentivises block producers to verify actions of users. Validators, akin to Ethereum’s record-keepers, have oversight of the Proof-of-Stake (PoS) system to prevent cheating or misconduct. A validator must hold a minimum of 32 ETH and commit their ETH as a stake, risking loss for malicious behavior. They are randomly chosen to propose transaction blocks and are rewarded with new ETH for their work, which preserves Ethereum’s security and decentralisation.

Ether is a purely digital currency that can be instantly sent globally. Its supply is capped, and new Ether is produced through mining. No government or entity controls Ether; it is decentralised and transparent. Ether issuance follows the Ethereum protocol, mainly benefiting network-securing stakers. Ethereum staking rewards fluctuate depending on the number of active stakers at any given time. The greater the number of stakers, the lower the rewards, and vice versa.

ETH holds value uniquely for various groups. For Ethereum users, it serves as payment for transaction fees. Some see it as a digital store of value due to limited new ETH creation. Financial app users view it as collateral for loans or payments. Additionally, many see ETH as an investment, similar to Bitcoin and other cryptoassets.

How is the network secured?

Ethereum, like other early 2010s crypto projects, employed the Proof-of-Work (PoW) consensus mechanism. PoW, originating with Bitcoin, involves miners competing using computers to propose new blocks. However, PoW has critics due to scalability and energy efficiency concerns.

In 2022, Ethereum shifted from PoW to Proof-of-Stake (PoS) through The Merge upgrade. The Merge upgrade refers to the transition of the Ethereum blockchain from PoW to PoS, similar to a software update. This aimed to improve scalability, transaction speed, lower fees, and decrease its carbon footprint. In PoS, validators deposit crypto asset in a staking contract to verify transactions. This collateral is “at stake” and can be forfeited if the validator behaves maliciously or fails to fulfill their responsibilities.The blockchain rewards validators for acting in the network’s interest, given their financial stake.

Storage

Just like other crypto assets, it’s crucial to understand the ways to securely store your Ether (ETH). Broadly speaking, there are two main types of crypto wallets for safeguarding your crypto assets: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your ETH, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

Crypto asset are known for their high price volatility. The value of ETH can fluctuate significantly in a short period depending the adoption or use cases of ETH and market sentiments regarding ETH, which could result in substantial gains or losses for investors.

Regulatory environment

The regulatory environment for crypto assets is still evolving in many jurisdictions and can impact the price of ETH. If governments and regulatory bodies around the world start cracking down on crypto assets and introducing stringent regulations, it could lead to a reduction in demand. Conversely, if governments and regulatory bodies start to embrace crypto assets and blockchain technology, it could lead to increased adoption and demand for ETH.

Technology or security risks

Ethereum, like any complex software platform, can experience technical vulnerabilities, bugs, and security breaches. These issues could lead to financial losses or a loss of confidence in the platform and impact the value of ETH.

Competition

Ethereum faces competition from other blockchain platforms and crypto assets that offer similar or improved features. The emergence of more advanced technologies could challenge Ethereum’s position and therefore the value of ETH.

Adoption and use cases

Ethereum’s success relies on its adoption and usage within the broader crypto asset and decentralised application ecosystem. If Ethereum fails to gain traction or loses popularity, it could impact the value of ETH.

Network Congestion and Scalability

Ethereum has experienced network congestion during periods of high demand, leading to increased transaction fees and slower processing times. The platform’s scalability challenges could affect user experience and consequently reduce demand for ETH.

Hard Forks

Ethereum has undergone several hard forks in its history to implement protocol upgrades or address security issues. A hard fork is a significant change to the protocol or rules of a blockchain network that results in the creation of a new branch or version of the blockchain. This new branch is incompatible with the existing version, leading to a divergence in the blockchain’s history and functionality. A hard fork occurs when developers, miners, or participants in a blockchain network decide to make substantial changes to the rules governing the network’s operation. These forks can lead to chain splits and uncertainties about the future direction of the network, resulting in loss of confidence in the platform. As such, the value of ETH may be impacted.

Dependence on Ethereum Dapps

Many projects and tokens are built on the Ethereum platform. The success or failure of these projects can impact Ethereum’s reputation and value.

Bitcoin Cash (BCH)

Market Statistics

Market Statistics can be found here.

About Bitcoin Cash (BCH)

Bitcoin Cash, or BCH, is a result of a hard fork that took place in 2017, splitting from the original Bitcoin (BTC). A hard fork is a significant and irreversible change to a blockchain’s protocol, resulting in the creation of a new and separate blockchain that’s incompatible and coexists with the old one. In other words, Bitcoin (BTC) and Bitcoin Cash (BCH) are two separate crypto assets that originated from a common blockchain but diverged during the 2017 hard fork. Bitcoin Cash is essentially a variation of Bitcoin, with a key difference being faster transaction speed and lower fees resulting from BCH being able to handle more transactions in a single block compared to Bitcoin.

BCH has many uses, including peer-to-peer payments, payments to merchants in stores and online, micro-transactions for content creators and app users, cost-effective remittances and cross-border trade. It also supports ecosystem applications and smart contracts.

Resources

Website: https://bch.info/en/

Whitepaper: https://bch.info/bitcoin.pdf

Who are the founders of Bitcoin Cash (BCH)?

In 2008, an anonymous creator known as Satoshi Nakamoto released a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” The first Bitcoin software, which powered the blockchain, became operational in 2009 and provided low fees and reliable transactions for several years. However, as Bitcoin gained popularity, transaction volumes grew, leading to slower processing times and higher fees by 2016. To address this, Bitmain, a mining hardware manufacturer, proposed a hard fork in August 2017 to increase the block size limit and accommodate more transactions, resulting in the birth of Bitcoin Cash, supported by figures like Roger Ver.

Since its inception, Bitcoin Cash has encountered various challenges and milestones. One significant event occurred in November 2018 when another hard fork led to the creation of Bitcoin SV (BSV) as a separate crypto asset.

How does Bitcoin Cash (BCH) work?

The separation between Bitcoin and Bitcoin Cash happened because some Bitcoin users disagreed with the introduction of SegWit2x technology in July 2017. SegWit is a protocol upgrade implemented on the Bitcoin blockchain, with a purpose of addressing certain issues within the Bitcoin network, including transaction malleability and the scalability of the blockchain. SegWit2x aimed to combine the implementation of SegWit with a 2MB block size increase.

In the early days of Bitcoin, discussions about block size limits started around 2010, but they gained significant attention in 2017 due to rising transaction fees and differing opinions on scaling Bitcoin. Some believed that increasing the block size was necessary to make Bitcoin a true peer-to-peer electronic currency, emphasising its role as a medium of exchange. This perspective clashed with the idea that Bitcoin’s central value was censorship resistance and decentralisation, promoted by Bitcoin Core. Amidst these debates, a meeting called the “New York Agreement” occurred in 2017, where miners and Core Developers agreed to support SegWit and a 2MB block size increase (SegWit2x). However, users preferred activating SegWit without the block size increase despite the desires of minders, leading to a soft fork on August 1, 2017. Some proponents of larger blocks rejected this approach and launched a hard fork called Bitcoin Cash with 8MB block limits, expressing their frustration with the prioritisation of SegWit over block size increase.

Bitcoin Cash was designed to offer an alternative that aligns with the original vision of Bitcoin as outlined by its creator, Satoshi Nakamoto. To tackle scalability issues and maintain quick transaction verification, Bitcoin Cash increased its block size and implemented an adaptable difficulty level. This approach aims to support fast and efficient transactions, especially as more people start using it. Because of its larger block size, Bitcoin Cash (BCH) processes transactions faster and with lower fees. It also supports smart contracts and apps within its ecosystem. With a limited supply of 21 million coins, Bitcoin Cash is scarce, like physical cash, and offers quick transactions with fees usually less than a tenth of a cent.

How is the network secured?

Like Bitcoin and many other crypto assets, Bitcoin Cash utilises the Proof of Work (PoW) consensus algorithm to rapidly and accurately validate transactions. PoW operates as a competitive race where miners compete to verify transactions by solving intricate mathematical puzzles using specialised computers. The miner who successfully solves the puzzle is rewarded with new BCH, a process known as “mining.” In contrast to Bitcoin (BTC), Bitcoin Cash has the goal of scaling to accommodate the demands of a global payment system. During the fork, the block size of Bitcoin Cash was increased from 1MB to 8MB, allowing it to process significantly more transactions per second (TPS) while maintaining very low fees. This addresses the issues of payment delays and high fees that some users encountered on the Bitcoin BTC network. As of 2023, Bitcoin Cash boasts a block size of 32MB, a notable contrast to Bitcoin’s 1MB block size.

Storage

To store, utilise, or send Bitcoin Cash (BCH), a digital wallet is required, often referred to as a crypto asset wallet. There exist various types of wallets, including desktop, mobile, online, and hardware variants. Each of these options comes with its own set of advantages and drawbacks, primarily related to factors like security and convenience. Generally, wallets can be categorised into two main types: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet that remains connected to the internet. While hot wallets offer convenience for swift BNB transactions, they also pose higher risks of hacking and theft. Hot wallets can take the form of mobile applications, desktop software, or online services.

Cold Wallet

Conversely, a cold wallet rarely connects to the internet. This characteristic enhances the security of cold wallets but may make them less user-friendly. Typically, cold wallets are hardware devices designed specifically for this purpose.

Risks

Price volatility

Like all crypto assets, BCH is known for its price volatility. Its value can fluctuate significantly over short periods, which can lead to substantial gains or losses for investors.

Regulatory environment

The regulatory environment for crypto assets is still evolving, and changes in regulations can impact the use and value of BCH. Governments around the world are taking various approaches to crypto asset regulation, which can create uncertainty.

Adoption and use cases

The success of BCH depends on its adoption as a means of payment and store of value. If it fails to gain widespread acceptance, its value could be negatively affected.

Technology or security risks

While crypto assets are generally considered secure due to blockchain technology, there is always a risk of security breaches, hacks, and vulnerabilities in the network or wallets. Changes or upgrades to the BCH protocol can also introduce technical risks, leading to forks or other issues and resulting in value of BCH. Further, the security of the BCH network relies on miners. If a single miner or group of miners gains a majority of the network’s hash rate, they could potentially manipulate the network.

Competition

BCH faces competition from other crypto assets, including Bitcoin (BTC) and other Bitcoin forks. The crypto asset market is highly competitive, and BCH must compete for users and use cases.

Liquidity risks

BCH may not have the same level of liquidity as larger crypto assets like Bitcoin (BTC), which can make it more challenging to buy or sell large amounts without affecting the market price.

Market sentiment

Crypto asset markets are influenced by sentiment, news, and social media. Positive or negative sentiment can lead to rapid price movements.

Scalability issues

While BCH was created to address scalability issues associated with Bitcoin, it still faces challenges in handling a high volume of transactions efficiently.

Bitcoin (BTC)

Market Statistics

Market Statistics can be found here.

About Bitcoin (BTC)

Bitcoin (BTC) is a permissionless, peer-to-peer payment settlement network with BTC as its native currency. Emerging in 2009, Bitcoin (BTC) was the first cryptoasset founded on blockchain technology. Bitcoin (BTC) was created to allow “online payments to be sent directly from one party to another without going through a financial institution.” Like its successors, the purpose of Bitcoin (BTC) was a decentralised digital asset free of central control. BTC remains the most widely accepted and traded crypto asset.

Resources

Website: https://bitcoin.org/en/

Whitepaper: https://bitcoin.org/bitcoin.pdf

Who are the founders of Bitcoin (BTC)?

In 2008, a programmer under the name “Satoshi Nakamoto” published Bitcoin’s whitepaper. The identity could be an individual or group. Despite Bitcoin’s wide use, Satoshi Nakamoto’s true identity remains unknown. The paper built upon previous cryptographic and computer science ideas, offering a clever solution to establish trust among distant online entities, even when hidden by pseudonyms or geographic distance.

Nakamoto was the original Bitcoin creator and its initial implementer. However, Nakamoto passed the network key and code control to Gavin Andresen, who later led the Bitcoin Foundation. Over the years, numerous contributors have enhanced Bitcoin’s software, patching weaknesses and adding features.

How does Bitcoin (BTC) work?

The Bitcoin blockchain operates as a decentralised and distributed digital ledger that records all transactions within the Bitcoin network. It serves as a secure and transparent record of ownership and transaction history for BTC. Whenever someone sends Bitcoin to someone else, that transaction is added to the blockchain. But before it gets added, a group of computers or nodes maintaining the network, called miners, must first confirm that the transaction is valid. Miners do this by solving complicated math puzzles. Once they solve the puzzle and agree that the transaction is valid, it’s added to a block.

Each block contains several transactions, and blocks are linked together in a chain. This chain of blocks is the “blockchain.” Once a block is added to the chain, it’s very hard to change anything in it. This makes the information in the blockchain very secure and reliable. Miners are rewarded for their work with new Bitcoin and transaction fees. This whole process not only ensures that transactions are real and secure, but also makes sure that no one can cheat by spending the same Bitcoin twice. The blockchain’s transparency and security are what make Bitcoin trustworthy and valuable.

Bitcoin’s supply is capped at 21 million coins due to its software. New coins are created during the mining process. Every four years, the reward miners get is cut in half. This makes sure that over time, fewer and fewer new Bitcoins are made, so there won’t be too many.

How is the network secured?

Proof of Work (PoW) is how the Bitcoin blockchain makes sure transactions are real and secure. It’s like a puzzle-solving race that miners compete in to check transactions. Miners use special computers to solve hard math problems. When they solve the puzzle, they prove they did the work to verify transactions on the Bitcoin network. The one who solves it first gets rewarded with new BTC. This happens about every 10 minutes. This is called “mining.” It makes sure Bitcoin is safe. Miners use powerful machines to solve puzzles, and when they solve one, they add a block of transactions to the blockchain.

Checking the accuracy of the solution to the puzzle is easy, but finding the solution is difficult and needs a lot of energy. This makes sure no one cheats or spends the same BTC twice. As more miners join, puzzles get harder, making rewards tougher to get. This secures the network. Bitcoin blockchain’s global spread also keeps the network safe. Even if most nodes go down, one node can recover the whole blockchain.

Mining uses energy, which some worry about. Miners use electricity, and more miners mean more power use. While many use clean energy, concerns about the environment remain.

Storage

To use, keep, or send Bitcoin, you need a digital wallet, also called a crypto wallet. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your BTC, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

Bitcoin’s value can change rapidly, leading to significant price fluctuations. This volatility can result in substantial gains or losses for investors.

Regulatory environment

Bitcoin (BTC) operates in a regulatory grey area in many countries. Governments and regulatory bodies around the world continue to develop and assess appropriate approaches, legislative and regulatory frameworks to manage and mitigate the risks of crypto assets, including BTC.

Technology or security risks

While the blockchain technology underlying Bitcoin is secure, vulnerabilities can emerge in specific implementations, posing risks to the network’s integrity and impacting the value of BTC. Additionally, bitcoin transactions are irreversible, making it a target for hacking and cyberattacks. Investors may lose their BTC permanently if their wallets are compromised since there is no central authority to help recover lost BTC.

Competition

The emergence of new crypto assets and blockchain projects could divert attention and investment away from Bitcoin, reducing the value of BTC.

Binance Coin (BNB)

Market Statistics

Market Statistics can be found here.

About Binance Coin (BNB)

Binance Coin (BNB) is a crypto asset created by the Binance exchange, one of the largest and most popular crypto asset exchanges in the world. BNB was initially launched as an Ethereum-based token during an Initial Coin Offering (ICO) in 2017. Since then, it has evolved into its own blockchain, known as the BNB Chain. Binance holds the title of the world’s largest crypto asset exchange by daily trading volume. Beyond its status as the top exchange, Binance has introduced a range of features for its users. This network encompasses BNB Chain, Binance Academy, Trust Wallet, and Research projects. These initiatives leverage blockchain technology to revolutionize finance. BNB plays a crucial role in driving the effectiveness of various Binance sub-projects.

Resources

Website: https://www.bnbchain.org/en

Whitepaper: https://github.com/bnb-chain/whitepaper/blob/master/WHITEPAPER.md

Who are the founders of Binance Coin (BNB)?

Changpeng Zhao, also known as CZ, a finance and crypto expert, founded Binance in 2017. CZ is a veteran of traditional finance and the crypto world, and he’s the founder and CEO of BijieTech, offering cloud-based exchange solutions. He’s been part of companies like OKCoin and Fusion Systems.

Binance kickstarted its operations with an ICO where financers received BNB tokens. Initial supporters received 10% of total BNB tokens, founders got 40%, and the remaining 50% were distributed to ICO participants.

How does Binance Coin (BNB) work?

BNB serves multiple purposes within the Binance ecosystem. BNB can be used to pay for trading fees on the Binance exchange at a discounted rate, pay for transaction fees and participate in network governance on the BNB Chain, purchase tokens offered through the Binance launchpad, as the native asset on the Binance Decentralised Exchange (Binance DEX), as a form of payment in the Binance ecosystem and to stake BNB and earn rewards.

At the beginning, there were 200 million BNB tokens. As stated in the whitepaper, Binance plans to use 20% of its earnings to buy back BNB from owners and destroy or “burn” them every three months. This process will continue until the network buys back 50% of all the BNB tokens. In the end, around 100 million BNB tokens will still be in use.

How is the network secured?

Binance Smart Chain uses a method called Proof-of-Stake (PoS) to secure the network. In PoS, validators deposit crypto asset in a staking contract to verify transactions. This collateral is “at stake” and can be forfeited if the validator behaves maliciously or fails to fulfill their responsibilities. The blockchain rewards validators for acting in the network’s interest, given their financial stake. This means people can stake BNB to be validators or confirm transactions in exchange for rewards. If they do their job well and propose valid blocks with accurate transaction details, they get paid from the transaction fees. Unlike other systems, there Is no new BNB “minted” or issued over time. Instead, some BNB is destroyed on purpose by the Binance team. They do this to make the amount of BNB lower over time. This destruction of BNB is called “burning.” It is done by sending some tokens to a place where no one can use them. This is done to make fewer tokens around and maybe increase their value.

Storage

You need a digital wallet, also called a crypto wallet to store, use or send BNB. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your BNB, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

Like all crypto assets, the value of BNB can be highly volatile. Its price can experience significant fluctuations in a short period, which could lead to potential gains or losses.

Regulatory environment

The regulatory environment for crypto assets is still evolving. Changes in regulations or government actions could impact the use and value of BNB.

Adoption and use cases

BNB’s value is closely tied to its adoption and usage within the Binance ecosystem. If Binance faces challenges or loses popularity, it could affect the demand for BNB.

Competition

The crypto asset space is competitive, with many other projects vying for attention and market share. If a new project or technology gains more traction, it could affect BNB’s value.

Technology or security risks

Binance can experience technical vulnerabilities, bugs, and security breaches, which could impact the BNB’s functionality and value.

Dependence on Binance

BNB’s value is closely linked to Binance’s success. Any negative developments related to Binance could have a direct impact on BNB’s value. Please note that regulators globally have flagged concerns about Binance on several occasions, and in particular UK consumers may wish to consult the FCA’s Consumer Warning here.

Tokenomics Changes

Unlike Bitcoin and Ethereum, the supply of BNB is not predetermined and Binance can control its supply. Binance has made adjustments to its tokenomics in the past. Changes in the way BNB is used or distributed could affect its value.

Market Manipulation

Crypto asset markets can be susceptible to manipulation and pump-and-dump schemes, affecting the token’s price.

Liquidity Risk

BNB’s liquidity, or how easily it can be bought or sold, could impact your ability to enter or exit the market quickly at a desired price.

Polygon (MATIC)

Market Statistics

Market Statistics can be found here.

About Polygon (MATIC)

Polygon is a layer 2 scaling solution for Ethereum, aiming to enhance transaction speed, lower costs, and simplify transaction complexities on Ethereum. Polygon utilises sidechains which are blockchains that run alongside the Ethereum main chain for off-chain computation while keeping security intact. MATIC, the token for Polygon, has roles in securing the network through staking, joining governance, and paying for transaction fees.

Resources

Website: https://polygon.technology/

Whitepaper: https://github.com/maticnetwork/whitepaper/

Who are the founders of Polygon (MATIC)?

Polygon, previously known as Matic Network, was launched in October 2017. Its co-founders include Jaynti Kanani, a full-stack developer and blockchain engineer who is now Polygon’s CEO. The team contributed significantly to Ethereum’s ecosystem before shifting to its own network in 2019. They were involved in developing technologies like Plasma MVP and WalletConnect for Ethereum. Sandeep Nailwal, co-founder and COO, is a blockchain programmer and entrepreneur. Anurag Arjun, the non-programming co-founder, is a product manager with experience in various companies.

How does Polygon (MATIC) work?

Polygon operates as a Layer 2 solution built upon Ethereum’s blockchain, aiming to enhance Ethereum’s scalability and functionality. Through Polygon’s side chains, computations are independently processed while leveraging Ethereum’s security. Transactions go through the Polygon Commit Chain, connecting Ethereum and Polygon. This speeds up transactions and reduces costs.

Polygon’s security is ensured through the Proof-of-Stake (PoS) consensus mechanism. Validators oversee the Polygon network in this system and validate transactions by staking MATIC tokens. MATIC serves as Polygon’s native currency, used for fees and services. Validators who stake MATIC can gain rewards for safeguarding the network. Additionally, MATIC can be utilized as a means of exchange for purchasing various products and services.

To access Polygon, you can move your crypto through the Polygon Bridge and then engage with various well-known crypto apps that were originally limited to the Ethereum main chain. You deposit tokens in Polygon, use them, and withdraw to Ethereum. Many decentralised finance apps work with Polygon, like Aave, Sushiswap, and Curve Finance.

How is the network secured?

Polygon uses a Proof-of Stake (PoS) consensus mechanism to secure the network. In PoS, validators “lock up” crypto asset in a staking contract to verify transactions. The blockchain rewards validators for acting in the network’s interest by confirming transactions, given their financial stake. Validators in Polygon stake MATIC tokens as collateral to engage in the PoS consensus mechanism and earn MATIC tokens, risking loss for malicious behavior. Participants who choose not to be validators can delegate their MATIC tokens to a validator, still participating in staking and gaining rewards. Polygon also employs block producers to enhance decentralization. These producers provide finality to main chains through checkpoints and fraud-proof mechanisms.

Storage

You need a digital wallet, also called a crypto wallet to store, use or send MATIC. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your MATIC, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

The cryptoasset market, including MATIC, is known for its extreme price volatility. Prices can experience rapid and unpredictable fluctuations based on market perceptions, which could lead to significant gains or losses for investors.

Regulatory environment

The regulatory environment for crypto assets is evolving, and changes in regulations could impact the legality and usage of MATIC. Regulatory actions could affect the value and availability of the token. Additionally, the lack of regulation in the crypto asset space can expose investors to risks such as fraudulent projects, scams, and market manipulation.

Technology or security risks

MATIC’s technology, like any blockchain project, is subject to technical vulnerabilities, bugs, and cyber attacks. A security breach or a flaw in the code could compromise the network and affect the value of the token.

Network reliability

MATIC’s network relies on validators and participants to maintain its operations. If a significant number of validators go offline or the network experiences congestion, it could impact the performance and reliability of the platform.

Competition

The blockchain and crypto asset space is competitive, with many projects offering similar solutions. MATIC faces competition from other scaling solutions, and if it fails to gain adoption, it could impact its value.

Project development

The success of MATIC depends on the ongoing development and adoption of its technology. Delays, changes in the project’s direction, or failure to meet milestones could impact the token’s value.

Market Manipulation

Crypto asset markets can be susceptible to manipulation and pump-and-dump schemes, affecting the token’s price.

Liquidity risk

Liquidity refers to how easily an asset can be bought or sold without causing significant price changes. If MATIC has low liquidity, investors may face challenges when trying to buy or sell large amounts of the token.

Ripple (XRP)

Market Statistics

Market Statistics can be found here.

About Ripple (XRP)

Ripple XRP is a crypto asset designed for efficient payments and is associated with Ripple, the company behind it. XRP was introduced by Ripple as a decentralised crypto asset specifically for the RippleNet payment platform. RippleNet, established by Ripple in 2012, provides a rapid settlement system for banks and financial institutions, enabling secure and instant global financial transactions. XRP is utilised within RippleNet to achieve remarkably swift transaction processing, handling approximately 1,500 transactions per second. Currently, Ripple (the company) takes a central role in supporting and advancing the XRP Ledger, contributing significantly to its growth and digital economy. Ripple has partnerships worldwide, including with Santander, American Express, and Standard Chartered. Ripple also explores central bank digital currency solutions in countries like Montenegro.

Resources

Website: https://xrpl.org/

Whitepaper: https://ripple.com/files/ripple_consensus_whitepaper.pdf

Who are the founders of Ripple (XRP)?

Developers David Schwartz, Jed McCaleb, and Arthur Britto formed the XRP Ledger (XRPL) in 2011, later uniting with Chris Larsen to establish “NameCoin” and, eventually, Ripple Labs Inc in 2012. Chris Larsen, an entrepreneur, ventured into blockchain for cross-border payments. Jed McCaleb, also a co-founder, previously created the first Bitcoin exchange, Mt. Gox, and later founded Stellar. Arthur Britto contributed to Ripple’s consensus algorithm. David Schwartz, Ripple’s CTO, had roles in programming and tech.

Ripple Labs has been in a legal dispute with the SEC since late 2020 over whether XRP is a security. The SEC claims Ripple traded $1.3 billion of XRP as an unregistered security. Ripple refutes the allegations and accuses the SEC of bias. Ripple’s choice to fight the lawsuit sets it apart from other settlements. In July 2023, U.S. federal judge ruled that institutional sales of the tokens violated federal securities laws, however, XRP is not a security as the sale of Ripple’s XRP tokens on exchanges and through algorithms did not constitute investment contracts and did not violate federal securities law. The case will proceed to a trial to check if the other claims by the SEC against Ripple are true, like whether Ripple executives helped in selling XRP to institutions without registering it.

How does Ripple (XRP) work?

Ripple offers an alternative to SWIFT, using blockchain to speed up cross-border transfers. SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, is a global messaging network used by banks and financial institutions to securely and efficiently send and receive money transfer instructions and other financial messages. SWIFT payments are widely used for international money transfers because they provide a standardized and secure way for banks around the world to communicate and settle cross-border transactions. However, it’s important to note that SWIFT transfers can be relatively slow and may involve fees, especially for international transfers. Ripple streamlines the process, allowing quick, transparent transfers and near-instant settlements.

It employs the interledger standard, a blockchain protocol linking ledgers from different bank systems. This removes intermediaries and central control. Just like TCP/IP on the internet, the interledger lets different ledgers communicate, cutting costs and time in cross-border transactions. Participating ledgers connect through trusted nodes where nodes are the computers that make sure everything is correct and secure. Ripple automatically finds the fastest way for transfers and calculates costs, while ensuring compliance and account verification. Funds are secured through cryptographic escrow during transactions. Cryptographic escrow means locking up money between two parties. It only gets unlocked if specific conditions, including time limits, are met for the deal. If not, the deal is canceled. When a payment goes well, the sender gets a digital receipt from the receiver. If not, the locked-up money goes back to the parties who locked it. If criteria are met, transactions occur and results are shared with the bank. XRP is the native currency of Ripple. XRP was designed as a fast, secure method for cross-border payments, primarily for financial entities. XRP acts as a bridge between different currencies, helping financial institutions exchange value.

Similar to Bitcoin and other crypto assets, the XRP native token has a set maximum supply of 100 billion tokens. Unlike conventional digital currencies, XRP is not mined but pre-distributed by Ripple. Ripple holds a portion of these tokens in reserve, and they are gradually unlocked through escrow. This distribution method involves providing tokens to institutional investors and exchanges, ensuring a steady and predictable supply of XRP. This approach aims to make XRP dependable for cross-border transactions. Despite its achievements, Ripple Labs encountered regulatory scrutiny over XRP sales.

How is the network secured?

The XRP network has over 150 validator nodes that confirm transactions, operated by universities, exchanges, businesses, and individuals around the world. XRP operates on a distinct consensus mechanism called the XRP Ledger Consensus Protocol (previously called Ripple Protocol Consensus Algorithm). Unlike typical proof-of-work or proof-of-stake methods, XRP Ledger relies on trusted nodes to confirm transactions and determine whether they should be added to the Ripple network as an official record, ensuring network integrity. Validators and participants on Ripple are trusted by each other through reputation. Validators do not receive rewards for participation.They achieve consensus by comparing their XRP Ledger copy, confirming transactions only if most of the other validators vote to accept it. Transactions are validated every few seconds, recorded on the XRP ledger, and timestamped on the blockchain to ensure immutability. Consensus requires at least 80% agreement among validating nodes, resulting in the addition of new blocks to the XRPL blockchain. With a tiny transaction fee and near-instant settlement (3-5 seconds), XRP is cost-effective and fast for payments.

Storage

XRP holders have options for storing their tokens in various types of wallets, like hot and cold wallets. These wallets provide secure storage and transaction capabilities for XRP. These wallets work on different devices such as desktops, mobile phones, and specialised hardware. Ripple has also created its own wallet called the XRP Ledger Wallet, designed for managing and safeguarding XRP tokens.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your XRP, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

Like all crypto assets, XRP’s value can be highly volatile, leading to potential significant gains but also substantial losses for investors.

Regulatory environment

Changes in regulations or unfavorable legal decisions could impact the value and use of XRP. In addition, Ripple Labs has faced legal action from the U.S. SEC and was held to have breached securities regulations for initial sales of XRP, which could lead to potential fines or restrictions on XRP. This legal uncertainty can affect its market performance.

Adoption and use cases

While XRP has partnerships with financial institutions, broader adoption is needed for sustained value. If adoption stalls, it could impact the token’s demand. Further, rapid changes in technology and advancements in the blockchain space could potentially render XRP’s use case less relevant over time.

Competition

XRP faces competition from other crypto assets and blockchain projects offering similar cross-border payment solutions. Increased competition could affect its adoption and value.

Technology or security risks

Technical vulnerabilities or flaws in the XRP protocol could be exploited by malicious actors, leading to security breaches and loss of funds.

Dependence on Ripple

XRP’s value is closely tied to the success and actions of Ripple Labs, which may impact the token’s performance if the company faces challenges or changes its strategies.

Market Manipulation

Crypto asset markets can be susceptible to manipulation and pump-and-dump schemes, affecting the token’s price.

Liquidity Risk

While XRP is listed on various exchanges, liquidity can vary, making it difficult to buy or sell large amounts without impacting the price.

USD Coin (USDC)

Market Statistics

Market Statistics can be found here.

About USD Coin (USDC)

Introduced in September 2018, USD Coin, abbreviated as USDC, is a stablecoin fully backed by liquid cash and assets equivalent to cash. USDC can be exchanged on a one-to-one basis for U.S. dollars, with its value supported by assets held by regulated U.S. financial institutions like BlackRock and BNY Mellon. Regular monthly confirmations of USDC reserves are published to ensure that the reserves exceed the circulating USDC amount, following attestation guidelines established by the American Institute of Certified Public Accountants (AICPA).

Resources

Website: https://www.circle.com/en/

Whitepaper: https://f.hubspotusercontent30.net/hubfs/9304636/PDF/centre-whitepaper.pdf

Who are the founders of USD Coin (USDC)?

USDC was developed by the CENTRE consortium, which is a collaboration between Circle and Coinbase. The goal of CENTRE was to create stable cryptoassets and network protocols. The project originated from the realisation that the industry required a stablecoin backed by fiat currency, characterised by robust governance and transparency, in contrast to Tether. USDC tackled these concerns by regularly publishing a public confirmation of 100% reserves of fiat tokens, and establishing clear regulations and instructions for CENTRE members concerning the issuance and redemption of USDC. Additionally, to become an issuer within the CENTRE consortium, members are required to adhere to essential membership and operational regulations, including licensing, compliance, technology, operations, accounting, and custody of fiat reserves.

In August 2023, Circle and Coinbase mutually decided that due to increasing regulatory clarity for stablecoins both in the U.S. and globally, the need for a separate governing entity like Centre is no longer necessary. Centre will cease to exist as an independent organisation, and Circle will continue to serve as the issuer of USDC, absorbing all Centre-related governance and operational responsibilities. This updated structure will streamline operations and governance, while reinforcing Circle’s direct accountability as the issuer. This includes retaining all smart contract keys, adhering to regulations regarding reserve governance, and facilitating the expansion of USDC to new blockchain networks.

How does USD Coin (USDC) work?

Businesses offering USDC have the option to create a Circle Account to convert US dollars into USDC. When a business deposits USD into its Circle Account, Circle generates an equivalent amount of USDC for them. This creation of new USDC is referred to as “minting,” which increases the total supply of USDC. Similarly, if a business wishes to convert their USDC back into US dollars, they can deposit the USDC into their Circle Account and request the corresponding amount of US dollars. This process, called “burning,” removes USDC from circulation by converting it to traditional currency.

USDC can also be accessed quickly from crypto asset exchanges like Coinbase, Crypto.com, and Binance.us. When you buy USDC on a crytoasset exchange, the exchange typically uses its available USDC balance to fulfill the transaction. If more USDC is needed, the exchange might mint additional USDC by utilizing its Circle Account.

Just like its predecessors, USDC addresses two main challenges faced by existing crypto assets: extreme price volatility and the ability to convert between fiat currencies and crypto assets. USDC offers stable value within transactions and smart contracts. It enables cost-effective, instant global transfers and has various applications, such as rewards, lending, payments, crowdfunding, and transparent donations.

How is the network secured?

USD Coin (USDC) does not have its own blockchain — instead, it is built on various blockchains including Algorand, Arbitrum, Avalanche, Ethereum, Flow, Hedera, Solana, Stellar and is secured by their respective consensus protocols.

In February 2024, Circle announced that it would discontinue its support for USDC on the TRON blockchain as a part of its ongoing risk management strategy.

In addition, USDC has also been bridged to Polygon, Fantom, NEAR, the Cosmos ecosystem, and many more emerging blockchains.

Storage

Just like other crypto assets, it’s crucial to understand the ways to securely store your USD Coin (USDC). Broadly speaking, there are two main types of crypto wallets for safeguarding your crypto assets: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your USDC, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Underlying reserves

USDC’s value is backed by USD-denominated assets held by regulated financial institutions. If these institutions face financial difficulties or mismanagement, it could impact the stability of USDC and the ability to redeem it for USD.

Regulatory environment

Stablecoins like USDC are subject to regulatory scrutiny, and changes in regulations could impact their operation, value, and use. Regulatory changes may require the stablecoin issuer to modify its practices or even halt operations.

Market sentiment

While USDC is designed to maintain price stability, there could still be price fluctuations, especially if the underlying reserves are not as stable as expected or if market sentiment changes.

Technology or security risks

USDC operates on several blockchains, which can be subject to technical vulnerabilities and attacks. Smart contract bugs or blockchain vulnerabilities could lead to loss of funds or instability in the stablecoin.

Competition

USDC faces competition from other stablecoins and digital currencies. Shifts in popularity or adoption of alternative stablecoins could impact the demand for USDC.

Dependence on Coinbase

As Coinbase is one of the founding entities behind USDC, any regulatory actions or issues affecting Coinbase could indirectly impact USDC.

Liquidity Risk

Although USDC aims to maintain a 1:1 peg with USD, market demand and liquidity can affect the ability to exchange USDC for USD at the expected value, especially during times of market stress.

Litecoin (LTC)

Market Statistics

Market Statistics can be found here.

About Litecoin (LTC)

Litecoin is a digital currency designed for quick and low-cost payments across the internet. It’s built on the same foundation as Bitcoin but with distinct technical features. Litecoin is essentially a variation of Bitcoin, with a key difference being faster transaction confirmations. This divergence, known as a fork, occurs when a community modifies the blockchain’s rules, creating a new path while maintaining the shared history. Litecoin originated as a fork of Bitcoin to explore fresh innovations, such as a distinct mining algorithm. It aims to provide speedier transaction processing and reduced fees compared to Bitcoin. Introduced in 2011, Litecoin (LTC) features a shorter block processing time (2.5 minutes versus Bitcoin’s 10 minutes) for faster transaction confirmation.

Resources

Website: https://www.litecoin.net/; https://litecoin.org/

Who are the founders of Litecoin (LTC)?

Litecoin has been linked closely to its founder and originator, Charlie Lee, a computer scientist and graduate of the Massachusetts Institute of Technology. Before creating Litecoin, Lee worked in technology, including roles at Google and later as Director of Engineering at Coinbase, a cryptoasset exchange. Upon joining Coinbase, Lee shifted his focus away from Litecoin’s development, expressing his priority in helping people “own bitcoin and hold bitcoin.” In 2017, he left Coinbase to dedicate more time to Litecoin’s advancement. Currently, Lee is the managing director of the Litecoin Foundation, a non-profit organization committed to helping advance Litecoin.

Besides Lee, the Litecoin Foundation also includes three other individuals on the board of directors: Xinxi Wang, Alan Austin and Zing Yang — all of which are accomplished in their own right.

How does Litecoin (LTC) work?

The Litecoin blockchain serves as a secure and transparent record of LTC ownership and transaction history. As a Bitcoin fork, Litecoin maintains the core principles and architecture of Bitcoin while enhancing transaction speed and lowering costs (up to 50 times less depending on market factors). Similar to Bitcoin, Litecoin utilises Proof-of-Work (PoW) mining, allowing individuals with computing hardware to contribute to its blockchain and earn newly created LTC. Whenever someone sends LTC to someone else, that transaction is added to the blockchain. But before it gets added, a group of computers or nodes maintaining the network, called miners, must first confirm that the transaction is valid. Miners do this by solving complicated math puzzles. Once they solve the puzzle and agree that the transaction is valid, it’s added to a block.

Two key distinctions with Bitcoin are that Litecoin targets quicker transaction confirmations and employs a distinct mining algorithm. In Litecoin, new blocks are added roughly every 2.5 minutes, contrasting with Bitcoin’s 10-minute interval. Its rapidity and affordable fees make it useful for payments and value transfers. However, with fewer miners compared to Bitcoin, the network’s security could be impacted.

Litecoin’s supply is capped at 84 million coins due to its software. As per the recent estimation by the Litecoin Foundation, it is anticipated that full dilution of Litecoin will take more than a century, extending beyond the year 2140. This projection considers the reward miners get is cut in half, every four years.

How is the network secured?

Similar to Bitcoin and various other cryptoassets, Litecoin employs the Proof of Work (PoW) consensus algorithm to swiftly and accurately validate transactions. PoW functions like a competitive puzzle-solving race where miners vie to verify transactions. Miners utilize specialized computers to solve complex mathematical problems, demonstrating their effort in verifying Litecoin network transactions. The first miner to solve the puzzle earns new LTC as a reward, a process known as “mining,” which occurs approximately every 2.5 minutes. While confirming the solution’s accuracy is simple, finding the solution demands substantial energy and effort, safeguarding against fraudulent activities and double-spending. This process ensures the security of Litecoin. As more miners join, the puzzles become tougher, making rewards more challenging to obtain, thereby enhancing network security.

Unlike Bitcoin, Litecoin uses a memory-intensive hashing algorithm called Scrypt, designed to enable individuals to mine Litecoin with regular hardware.

Storage

To use, keep, or send LTC, you need a digital wallet, also called a crypto wallet. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your LTC, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price Volatility

Like all cryptoassets, Litecoin’s price can be extremely volatile, leading to significant gains or losses in a short period. Sudden price fluctuations can impact the value of an investor’s holdings.

Regulatory environment

The regulatory environment for cryptoassets is evolving and can impact their legality, use, and trading. Changes in regulations could affect the value and usability of Litecoin.

Competition

Litecoin competes with a plethora of other cryptoassets, including Bitcoin, Ethereum, and various altcoins. If another cryptoasset gains more traction or offers better features, it could lead to a decrease in demand for Litecoin.

Technological and security risks

Technological vulnerabilities, bugs, or hacks could compromise the security and functionality of the Litecoin network. Such incidents could lead to a loss of investor funds and a loss of confidence in the cryptoasset.

Adoption and use cases

The success of Litecoin depends on its adoption for real-world use cases. If it fails to find meaningful applications, its value could be limited.

Development and leadership

The direction and development of Litecoin depend on the decisions made by its development team and leadership. Any disputes or lack of development progress could impact the cryptoasset’s future prospects.

Market Sentiment

The value of Litecoin is influenced by market sentiment, media coverage, and public perception. Negative news or sentiment can lead to sudden drops in value.

Network Congestion and scalability

During periods of high demand, the Litecoin network may experience congestion, leading to slower transaction processing times and higher fees.

Liquidity risk

In times of high market volatility or during market crashes, there could be liquidity issues that make it difficult to buy or sell Litecoin at desired prices.

Wrapped Bitcoin (WBTC)

Market Statistics

Market Statistics can be found here.

About Binance Coin (BNB)

Wrapped Bitcoin (WBTC) is an Ethereum-based token that represents Bitcoin (BTC). WBTC offers the advantage of being usable within Ethereum’s ecosystem of wallets, dapps, and smart contracts. Through a WBTC partner, 1 BTC can be exchanged for 1 Wrapped Bitcoin and vice versa. WBTC enables Bitcoin holders to engage with Ethereum’s decentralised finance (DeFi) applications. The BTC supporting WBTC’s value is openly confirmed through a “proof of reserve” system, ensuring a 1:1 relationship between minted WBTC tokens and Bitcoin held by custodians.

Resources

Website: https://wbtc.network/

Whitepaper: https://wbtc.network/assets/wrapped-tokens-whitepaper.pdf

Who are the founders of Wrapped Bitcoin (WBTC)?

The Wrapped Tokens initiative, including WBTC, was initiated by the collaborative effort among three organisations: BitGo, Kyber Network, and Ren.

BitGo, established in 2013 by Mike Belshe, is a firm offering institutional digital asset custody, trading, and financial services. Besides being a WBTC developer, BitGo is its original custodian, holding WBTC tokens and the keys for creating more.

Kyber Network, founded in 2017 by Loi Luu, Victor Tran, and Yaron Velner, functions as an on-blockchain liquidity protocol integrating various cryptoasset tokens and DeFi applications. Based in Singapore, Kyber Network, along with Ren, contributed to creating WBTC and remains a merchant on its network, minting and burning WBTC tokens to maintain the 1:1 token-to-BTC ratio.

Similar to Kyber, Ren, established in 2017 by Taiyang Zhang and Loong Wang, focuses on cross-blockchain integration of cryptoassets and DeFi apps through solutions like RenBridge and RenVM.

Kyber Network and REN are the merchants who mint and burn WBTC tokens, and BitGo is the custodian who holds BTC and the keys to mint WBTC tokens.

The WBTC DAO comprises governing members responsible for significant protocol updates and changes. These members, around 30 in number, oversee WBTC, initially set in motion by BitGo, Ren, and Kyber. Some of these members can serve as merchants or custodians overseeing BTC assets.

How does Wrapped Bitcoin (WBTC) work?

Wrapped Bitcoin was initially revealed on October 26, 2018, and officially launched on January 31, 2019. Creating new wrapped tokens is referred to as “minting”. The entity or party that holds the asset is the custodian. The keys to minting tokens are in the hands of custodians. The institution or party to whom wrapped tokens are issued is known as the merchant. The wrapped token is distributed mostly through merchants. Each merchant has a key that may be used to start the minting of new wrapped tokens and the burning of old wrapped tokens. Cryptoasset burning is when a fraction of tokens are sent to a wallet with no private key. This means the tokens are lost forever. Tokens are usually burned to reduce availability and increase market value.

While a merchant initiates the WBTC minting process in the wrapped framework, a custodian is responsible for carrying it out. It’s important to note that users are not directly engaged in the minting process. Instead, the process involves a sequence of transactions between the merchant and the custodian. BTC set for conversion is held by a custodian, involved in making and erasing WBTC tokens. When WBTCs are burned, the BTC balance can be reclaimed from the custodian. While minting, BTC is sent to the custodian for storage and an equivalent WBTC tokens is received. The primary custodian for Wrapped Bitcoin is BitGo, producing a specific number of WBTC sent to the merchant’s Ethereum address. WBTC does not have a set supply limit. The number of tokens in circulation is precisely proportional to the quantity of Bitcoin reserves in the WBTC network since Wrapped Bitcoin backs Bitcoin at a 1:1 ratio. All WBTC issued will be fully backed and verified through on-chain proof of reserves.

In order to obtain WBTC, a user initiates a token request with a merchant. The merchant then carries out the necessary KYC / AML processes and confirms the user’s identity. After these steps are finished, the user and merchant proceed with their exchange, where the user’s Bitcoin moves to the merchant and the merchant transfers WBTC to the user.

How is the network secured?

WBTC tokens are secured by the parent blockchain they run on — Ethereum. Refer to Ethereum (ETH) for more information about the consensus mechanism used to secure transactions.

Storage

You need a digital wallet, also called a crypto wallet to store, use or send WBTC. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your WBTC, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

Bitcoin’s value can change rapidly, leading to significant price fluctuations. This volatility can result in substantial gains or losses for investors.

Regulatory environment

Regulatory changes or uncertainties could impact the operation and legality of WBTC, potentially leading to restrictions, shutdowns, or legal issues.

Custodian risk

WBTC requires custodians to hold and secure the underlying Bitcoin assets. If custodians experience security breaches or mismanagement, investors could lose their funds.

Counterparty risk

Users must trust the custodians and merchants involved in the minting and burning processes. If these parties fail to perform their roles or act maliciously, it could lead to losses for investors.

Market sentiment

The value of WBTC can be influenced by market dynamics, including supply and demand, changes in the value of Bitcoin, and general market sentiment.

Interoperability risks

WBTC relies on cooperation between various blockchain networks and projects. If any of these components experience technical issues or incompatibilities, it could disrupt WBTC’s operation.

Technology and security risks

As WBTC operates at the intersection of different technologies (Bitcoin and Ethereum), technical challenges and updates in either blockchain could affect its functionality. In addition, WBTC relies on smart contracts to function. Any vulnerabilities or flaws in these contracts could lead to security breaches, hacks, or loss of funds.

Liquidity risk

The availability and liquidity of WBTC could fluctuate, affecting the ability to trade or redeem tokens for Bitcoin.

Wax Network (WAXP)

Market Statistics

Market Statistics can be found here.

About Wax Network (WAXP)

WAX, short for Worldwide Asset Exchange, operates as an eco-friendly blockchain network. It specializes in non-fungible tokens (NFTs), collectibles, and video game trading. WAX aims to offer a comprehensive platform for launching successful NFT collections, covering games, DApps, exchanges, and marketplaces.

Existing digital markets on blockchain networks encounter challenges such as scalability and transaction speed. WAX was designed to address these issues within the digital goods market while also accounting for the growth of the platform. The WAX protocol includes a native blockchain, decentralised marketplace, item trading, asset generation, and a wallet for cryptoassets. WAX has created custom functionalities and incentive structures tailored to enhance the blockchain’s effectiveness in e-commerce. WAXP is the utility token of the WAX ecosystem that users can use to access to specific features or services within the WAX network.

Resources

Website: https://www.wax.io/

Whitepaper: https://github.com/worldwide-asset-exchange/whitepaper

Who are the founders of Wax Network (WAXP)?

WAX was established through the collaboration of William Quigley and Jonathan Yantis.

William Quigley pursued education at the University of Southern California and gained experience at Disney. After departing from Disney in the early 1990s, he earned an MBA from Harvard and ventured into venture capitalism. Eventually, he assumed the role of managing director at Idealab. Apart from his involvement in WAX, he also serves as the managing director at Magnetic.

Jonathan Yantis holds the position of Chief Operating Officer at WAX and concurrently holds the role of Chief Operating Officer at OPSkins.

How does Wax Network (WAXP) work?

WAX has developed a collection of blockchain-based tools that serve as the foundation for dApps, marketplaces, and native non-fungible tokens (NFTs). These tools encompass features supporting e-commerce functions, including the WAX Cloud Wallet, SSO and OAUTH, a native RNG service, and a developer portal.

WAXP is purpose-built to enable secure, convenient, and swift e-commerce transactions within the WAX ecosystem. WAXP tokens can be used to trade NFTs across various dApps and marketplaces and also allow users to participate in staking activities. Staking refers to the act of holding and “locking up” a certain amount of cryptoasset tokens in a blockchain network to participate in the network’s operations, achieve certain benefits, or support its functions. Staking WAXP increases token scarcity (as it remains set aside until reclaimed) and yields rewards over time. The staked cryptoassets are always retrievable, and this process powers the blockchain for feeless transactions and limitless opportunities. Staked token holders can also vote for block producers, also known as validators and earn voting rewards, funded by token inflation.

How is the network secured?

WAX operates as a Delegated Proof of Stake (DPoS) blockchain network. Delegated Proof of Stake (DPoS) is a consensus mechanism used in blockchain networks to validate transactions and secure the network. In DPoS, token holders in the network elect a small number of delegates or validators who are responsible for confirming transactions and creating new blocks on the blockchain, which become the official record of transactions. Validators deposit cryptoasset in a staking contract to verify transactions. This collateral is “at stake” and can be forfeited if the validator behaves maliciously or fails to fulfill their responsibilities. These validators take turns adding blocks in a predetermined order. This makes sure that everyone follows the same rules and doesn’t cheat. It prevents problems like double-spending (using the same money twice) and keeps the network secure.

Storage

To use, keep, or send WAXP, you need a digital wallet, also called a crypto wallet. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your WAXP, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Price volatility

Cryptoassets including WAXP, are known for their high price volatility. The value of WAXP can experience significant fluctuations over short periods, which can lead to potential gains but also substantial losses for investors.

Regulatory environment

The regulatory landscape for cryptoassets is still evolving, and changes in regulations can impact the use and trading of WAXP. Regulatory developments could affect the value and legality of the token.

Adoption and use cases

The success of WAXP relies on its adoption within the e-commerce and NFT markets. If the platform’s adoption doesn’t meet expectations, it could impact the demand and value of WAXP tokens.

Competition

The blockchain and cryptoasset space is highly competitive. WAXP competes with other platforms offering similar services and solutions. If a competitor gains more traction or offers better features, it could impact the demand for WAXP.

Technology or security risks

Like any blockchain technology, vulnerabilities and security breaches are possible. Smart contract bugs, hacking, and other technical issues could result in the loss of tokens or damage to the network.

Tokenomics Changes

The economic model of WAXP, including staking, voting, and rewards, can impact the token’s value. Changes to the tokenomics, such as inflation rates or reward distribution, could affect investor returns.

Network Risks

The security and efficiency of the WAX network are critical for its success. Technical glitches, network congestion, or other operational issues could affect the user experience and investor confidence.

Market sentiment

The value of WAXP can be influenced by market sentiment and speculative trading. Positive or negative news, trends, or rumors can lead to rapid price changes.

Liquidity Risk

Low trading volume and liquidity can make it challenging to buy or sell WAXP tokens without significantly impacting the market price.

Stellar (XLM)

Market Statistics

Market Statistics can be found here.

About Stellar (XLM)

Lumen or XLM is the native cryptoasset for Stellar, a decentralised payments network. Stellar empowers the creation, distribution, and exchange of digital versions of various forms of currency, from fiat currencies like dollars and euros to cryptoassets like bitcoin. The intent behind Stellar’s software is to improve the current financial framework and streamline payment processes. XLM is used for paying transaction costs within the Stellar network.

Resources

Website: https://www.stellar.org

Whitepaper: https://www.stellar.org/papers/stellar-consensus-protocol

Who are the founders of Stellar (XLM)?

Jed McCaleb, after departing from Ripple due to differences about the company’s future course in 2013, partnered with attorney Joyce Kim to establish Stellar. McCaleb’s objective is to enable individuals to transition from traditional fiat currencies to cryptoassets seamlessly, eliminating the typical obstacles encountered when transferring funds globally. Currently occupying the roles of CTO at Stellar and co-founder of the Stellar Development Foundation, he leads this nonprofit organization with the aim of “unlocking global economic potential by enhancing money’s fluidity, fostering open markets, and empowering individuals”.

How does Stellar (XLM) work?

Stellar’s cryptoasset, the Stellar Lumen (XLM), fuels the Stellar payment network. Serving as a cross-border transfer and payment system, Stellar strives to unite global financial infrastructure, bridging banks, payment systems, and individuals through secure and rapid transfers. It operates under the oversight of the nonprofit Stellar Development Foundation (SDF). Stellar was designed to complement existing assets and cryptoassets, enabling users to create Stellar tokens representing various assets (i.e. dollars, euros, bitcoins). These tokens facilitate blockchain transactions and can be exchanged at any time for their corresponding base assets. In other words, Stellar converts money in a few seconds, first into XLM, and then into the requested currency. This is performed by “Anchors”. Anchors help make trading these things easier on Stellar by using a special system that keeps track of who wants to trade what. XLM helps in this process, overcoming the problems of high fees and slow procedures. Every transaction costs just 0.00001 XLM.

Being a decentralised financial network, no single entity controls transactions or entry into Stellar. The network remains operational even if certain servers go offline. XLM cannot be mined or staked for rewards, unlike some other assets. Stellar shares similarities with technologies like Bitcoin but stands apart due to its consensus protocol. Stemming from a 2014 fork or divergence in the blockchain’s rules, the Stellar Consensus Protocol (SCP) emerged, changing Stellar into an open-source system. This protocol confines transaction validation to trusted nodes, differentiating it from systems involving the entire network of nodes. Nodes are the computers supporting the operation of the Stellar network that make sure everything is correct and secure.

How is the network secured?

Stellar uses the Stellar Consensus Protocol (SCP), enabling nodes to vote on transactions until quorums are reached. Stellar is like a big group of computers that need to agree on transactions. The SCP helps these computers (called nodes) agree on which transactions are valid and should be added to the blockchain. Some nodes suggest transactions they think should be added to the blockchain. Other nodes then vote on whether they agree with these suggested transactions. If most nodes agree, the transactions are approved. Nodes keep voting and confirming transactions until most of them agree on a set of transactions. This set becomes the official record or blockchain. The protocol makes sure that everyone follows the same rules and doesn’t cheat. It prevents problems like double-spending (using the same money twice) and keeps the network secure.

Storage

You need a digital wallet, also called a crypto wallet to store, use or send XLM. There are different types: desktop, mobile, online, and hardware wallets. Each has benefits and downsides, like security and convenience. Broadly, wallets fall into two categories: hot wallets and cold wallets.

Hot Wallet

A hot wallet is a digital wallet connected to the internet. While this convenience suits quick transactions with your XLM, it heightens exposure to hacking and theft risks. Hot wallets can appear as mobile apps, desktop programs, or online services.

Cold Wallet

In contrast, a cold wallet is rarely linked to the internet. This makes cold wallets more secure than hot ones, though less user-friendly. Cold wallets are typically hardware wallet devices.

Risks

Market volatility

Cryptoassets are known for their price volatility. The value of XLM can fluctuate significantly in a short period, leading to potential gains or losses for investors.

Regulatory environment

The regulatory environment for cryptoassets is still evolving. Changes in regulations or government policies could impact the use and value of XLM. Legal uncertainties can also affect its adoption and trading. Further, the decentralized nature of cryptoassets can also lead to a lack of consumer protections and recourse in case of disputes.

Adoption and use cases

The success of XLM depends on its adoption and use cases. If the Stellar network and its technology don’t gain widespread adoption or face competition from other platforms, it could affect the value of XLM.

Competition

There are many other blockchain platforms and cryptoassets with similar goals and features. Competition within the industry could impact the growth and value of XLM.

Technology or security risks

Blockchain technology, including that of Stellar, is relatively new and can have technical vulnerabilities. Security breaches, software bugs, or hacking attacks could pose risks to the network and the value of XLM.

Market sentiment

Cryptoasset prices can be influenced by investor sentiment, market trends, and social media activity. This can lead to sudden price changes based on perceptions rather than underlying fundamentals.

Project development

The success of XLM relies on continuous development and improvements to the Stellar network. Delays or failures in implementing upgrades could affect the value of XLM.

Liquidity

Crypto asset markets can have periods of low liquidity, which may lead to difficulty in buying or selling XLM at desired prices.