Learn Crypto

Introduction to Cryptocurrencies

Cryptocurrency is a type of currency which is available in digital form (in contrast with the physical coins and banknotes of the usual currency). However they are still separated in units (virtual coins) and can be used for buying goods or services, exactly like the physical coins.

Political freedom cannot exist without economic freedom; a free mind and a free market are corollaries.
Ayn Rand

There are some special advantages of the cryptocurrencies which made them so popular after the launch of the legendary Bitcoin:

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What to mine after Ethereum's switch to PoS

A very nice read about the upcoming Ethereum’s switch from Proof of Work to Proof of Stake. As many people are wondering which cryptocurrency should be their next choice, this press release can help them a lot as it chooses some of the most profitable altcoins from Whattomine.

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BitcoinZ Halving

BITCOINZ is a deflationary cryptocurrency, with halvings on its mining rewards every 4 years.

It is the oldest and maybe the only “BITCOIN” named project that can still be mined with a normal PC and it is not a Bitcoin blockchain fork, as it had its own genesis block!

BITCOINZ was launched with the legendary “BITCOIN” name because it added optional privacy with its “Z” addresses, fixed the high Bitcoin fees reducing them almost to zero, offered scalability, protected the PC miners from the ASIC elites and at the same time it truly honoured Bitcoin’s vision with:

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How to Avoid Traps in Cryptospace

In this section you can find 10 golden tips in order to protect yourself in Cryptospace, the highly unexplored and dangerous world of cryptocurrencies. The potential traps are numerous because the profits that some groups make by scamming newcomers in this world, are huge.

We have organized the section in 10 golden tips, trying to cover every single aspect. By following these tips, you will eliminate every possible risk!

1. Cryptocurrencies are very volatile and risky assets

Even the most popular cryptocurrency with the largest capitalisation, the original Bitcoin, is extremely volatile making often even double digit daily moves changing its value like +12% or -15% in just a few hours.

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What is a block and Blockchain?

A block is a file where data (pertaining to a specific cryptocurrency network) are permanently recorded. A block records the most recent digital coin transactions that have not yet been recorded to any prior blocks. You can imagine that a block is like a page of a huge ledger or record book.

Understanding Blocks

Each block contains:

A list of transactions
A timestamp
A reference to the block that came before it
Additional technical information like difficulty target and nonce

The Blockchain Structure

The blockchain is formed when these blocks are cryptographically linked together in chronological order. This creates an immutable record of all transactions that have ever occurred on the network.

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Mining BitcoinZ

BITCOINZ is a minable digital coin which is using Zhash, an ASIC resistant algorithm. This way it protects the miners community so that virtually everyone is able to use his hardware in order to mine BITCOINZ and support its network. In this section you will find a list of the available mining pools and an analytical mining guide with some useful tips for BITCOINZ mining.

A Few Words About Mining & Mining Pools

For a miner, the probability of finding a block is equal to their portion of the total hashrate (mining power) on the network. This means that the miners with a small percentage of the mining power stand a very small chance of discovering the next block on their own.

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Some information about the legendary Bitcoin

The root problem with conventional currencies is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

What is Bitcoin?

Bitcoin(₿) was launched in 2008-2009 and it is the first digital coin that solved the double-spending problem without requiring a trusted authority or central server. It introduced a revolutionary technology called blockchain and proved that we can have a decentralized currency that is not controlled by banks or governments.

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What is Mining, Block Reward and Reward Halving?

In the Cryptocurrency world, the block reward (or mining reward) is the number of coins that are given as reward to the miner that first “found” the next block by solving a mathematical puzzle. The whole procedure of finding the next block in a cryptocurrency blockchain is called mining.

Understanding Mining

Mining serves several crucial purposes:

Verifies and processes transactions
Secures the network
Creates new coins
Maintains decentralization

Block Rewards

The block reward system:

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What is a Community Driven Coin?

A Community driven coin is a cryptocurrency project that has no specified owner and of course not a company structure behind it or a CEO deciding for its future. Instead, it has Community-driven development that provides the control of the development process to the community.

Key Characteristics

No Central Authority
- No single person or entity controls the project
- Decisions are made collectively by the community
- True decentralization in governance
Community Development
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What is Proof of Work (PoW)?

In a cryptocurrency network, the users send each other digital coins. A decentralized ledger gathers all the transactions into blocks. However, the confirmation of the transactions and the arrangement of blocks are necessary. Proof-of-Work, or PoW, is the consensus algorithm that makes this possible.

How Proof of Work Functions

Transaction Verification
- Miners collect pending transactions
- Group them into blocks
- Compete to solve a mathematical puzzle
- First to solve gets to add the block to the chain
The Mining Process
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What is Premining?

Premining is the creation of a number of crypto coins before the cryptocurrency is launched to the public and their allocation to specified coin addresses. Premining has a negative connotation in the cryptospace due to the ability of developers to privately mine and allocate coins to themselves before public launch.

Understanding Premining

What is Premining?
- Creation of coins before public launch
- Allocation to specific addresses
- Usually controlled by developers
- Not available to the general public
Common Justifications
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What is Proof of Stake?

Proof of Stake (PoS) model states that a person can validate block transactions according to how many coins they hold. This means that the ownership (stake) of more coins leads to the increase of the validating power and the associated rewards.

How Proof of Stake Works

Basic Concept
- Validators stake coins as collateral
- Validation power proportional to stake
- No mining hardware required
- Energy efficient
Validation Process
- Validators selected based on stake size
- Must maintain minimum stake
- Rewards distributed to validators
- Penalties for malicious behavior

Advantages of PoS

Energy Efficiency
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What is a Payment Gateway?

A Payment Gateway is a decentralized payment platform where users can pay, receive and transfer money to another user using digital coins (cryptocurrencies). The payment gateway reduces the intermediaries involved in the process and makes the payment process fast.

How Crypto Payment Gateways Work

Basic Function
- Accept cryptocurrency payments
- Convert between currencies (optional)
- Process transactions securely
- Provide merchant tools
Key Features
- Real-time transactions
- Low processing fees
- Global accessibility
- Multiple currency support
- Automated conversion

Benefits for Merchants

Financial Advantages
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What is ZHash?

ZHash is a variant of the popular Equihash Proof of Work algorithm, which was developed as a solution that would increase the resistance of the algorithm versus the ASIC miners.

Why ZHash Was Needed

ASIC Resistance
- Bitmain released ASIC miners for Equihash
- Threatened network decentralization
- Made GPU mining less profitable
- Created centralization risks
Development Goals
- Maintain ASIC resistance
- Protect GPU miners
- Ensure decentralization
- Preserve network security

Technical Features

Algorithm Characteristics
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What is a Cryptocurrency Wallet and Multiwallet?

A cryptocurrency wallet is an application that allows cryptocurrency users to store and retrieve their digital coins. Usually each coin has its own wallet options, aka its own applications for every operating system and device type. With their e-wallets, users can create new addresses, send and receive coins, and monitor their balances.

Types of Wallets

Desktop Wallets
- Full node wallets
- Light wallets
- Installed on computer
- Complete control over funds
Mobile Wallets
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What is a Cryptocurrency Exchange?

Cryptocurrency exchanges are online platforms in which you can exchange one kind of digital asset for another based on the market value of the given assets.

How Cryptocurrency Exchanges Work

Basic Functions
- Match buyers with sellers
- Maintain order books
- Process transactions
- Provide trading interface
- Handle deposits/withdrawals
Types of Exchanges
a) Centralized Exchanges (CEX)
- Operated by companies
- Requires KYC/AML
- Higher liquidity
- Custodial service
b) Decentralized Exchanges (DEX)
- No central authority
- Non-custodial
- Smart contract based
- Greater privacy

Key Features

Trading Options
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What is Transactions Privacy and Zk-snarks?

A privacy coin is defined as a cryptocurrency that allows private transactions hiding data about its users. Such data includes the amount of cryptocurrency traded and held in wallets.

Understanding Privacy in Cryptocurrency

Why Privacy Matters
- Financial privacy is a right
- Protection from surveillance
- Business confidentiality
- Personal security
Types of Privacy
- Transaction privacy
- Address privacy
- Network privacy
- Balance privacy

Zk-snarks Technology

What are Zk-snarks?
- Zero-Knowledge Succinct Non-Interactive Argument of Knowledge
- Proves transaction validity
- Hides transaction details
- Maintains blockchain integrity
How it Works
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What is an ASIC?

Application-specific integrated circuit (abbreviated as ASIC) is an integrated circuit (IC) customized for a particular use, rather than intended for general-purpose use. In Bitcoin mining hardware, ASICs were the next step of development after CPUs, GPUs and FPGAs.

Evolution of Mining Hardware

Historical Progression
- CPU Mining (2009)
- GPU Mining (2010)
- FPGA Mining (2011)
- ASIC Mining (2013)
ASIC Characteristics
- Purpose-built chips
- Maximum efficiency
- Single algorithm focus
- High performance

Impact on Mining

Advantages
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What is an Address for Payments with Cryptocurrencies?

An address for cryptocurrency payments is a unique identifier that serves as a virtual location where cryptocurrency can be sent. People can send digital coins to these addresses similarly to the way that printed money (FIAT) can often be sent to email addresses with digital payment services.

Understanding Crypto Addresses

Basic Concepts
- Unique identifiers
- Public key derivatives
- Blockchain specific
- Cryptographically secure
Address Types
- Transparent addresses
- Shielded addresses (privacy)
- Multi-signature addresses
- Smart contract addresses

How Addresses Work

Technical Aspects
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What is Decentralization?

Decentralization is the process of distributing and dispersing power away from a central authority. In the world of cryptocurrencies, decentralization plays a critical role in many aspects. Some of them are safety, security and their very philosophy which has inspired their creation.

Understanding Decentralization

Core Concepts
- Distribution of power
- No central authority
- Community governance
- Shared responsibility
Key Aspects
- Network decentralization
- Development decentralization
- Governance decentralization
- Mining decentralization

Benefits of Decentralization

Security Benefits
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What is FIAT Currency?

Fiat currency (or fiat money) is currency that is issued by governments and central banks and is not backed by a precious commodity, such as gold or silver. Instead, the government or central bank that issued it is backing it up.

Understanding Fiat Currency

Key Characteristics
- Government issued
- No intrinsic value
- Legal tender status
- Centrally controlled
Historical Context
- Gold standard abandonment
- Modern monetary policy
- Government control
- Banking system evolution

How Fiat Money Works

Value Basis
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What is a Blockchain Explorer?

A block explorer allows you to explore the whole blockchain of the cryptocurrency you are using. It needs to be underlined that you can’t use a block explorer for a blockchain it wasn’t meant for. For example, you can’t use a Bitcoin block explorer to track BitcoinZ transactions.

Understanding Blockchain Explorers

Basic Functions
- View transactions
- Track addresses
- Monitor blocks
- Verify network status
- Check confirmations
Key Features
- Real-time updates
- Search functionality
- Transaction history
- Network statistics
- Address balances

Common Use Cases

Transaction Verification
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What is a Fork?

A cryptocurrency fork is a critical update to a network’s protocol that makes existing rules either valid or invalid. Sometimes this procedure may result in “independent” and new versions of a cryptocurrency. Usually with the “Fork” definition we mean a hard fork.

Types of Forks

Hard Forks
- Incompatible protocol changes
- Creates new chain
- Requires full upgrade
- Results in two chains
Soft Forks
- Backward compatible
- Single chain continues
- Optional upgrade
- Maintains compatibility

Reasons for Forks

Technical Improvements
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