Gavin C

A preview to the future of finance.

What is
Cryptocurrency ?

C
ryptocurrency is a decentralized digital currency meaning that no one
entity controls the currency unlike traditional methods, whether that being
a country or company.

Below I created a list of a few things that cryptos must have to qualify as a
Cryptocurrency.

1. Digital:
Cryptos have to be virtual, meaning there are not physical coins or bank notes
that would represent cryptos.

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2. Decentralized:
This is probably a buzzword one might hear when someone tells them about
Bitcoin (BTC) or Etherum (ETH). But what does it mean ?

It means there isn’t just one home or Stakeholder to the flow of cryptocurrencies
like chase bank or in the case for the country, the government.

There are thousands of transactions taking place every second around the world.
If you go to the grocery store to buy some milk, eggs, hair products even. If you
use cash great, then you understand that the dollar is a valid note of legal tender
and represents (or at least used to) an amount of gold which the US stored. and
when printing all of these dollars, if you were to add up 100% of the circulating
supply, it would equal the gold stored in the federal reserve.

Or at least until 1971, after President Nixon abandoned the gold standard, which
allowed the value of the dollar to float freely in the world's foreign
exchange markets. The dollar changes constantly in reaction to shifts in the
ongoing forex trades. Before the creation of the dollar index, the dollar was fixed
at $35 per ounce of gold, and it had been that way since the 1944 Bretton Woods
Agreement.

When people point out that Cryptocurrency are “Too Volatile” here is the Dollar
Index.

The dollar index began at 100. The index has measured the percent change in the
dollar's value since the establishment of its base value. Its all-time high was
163.83 on March 5, 1985. Its all-time low was 71.58 on April 22, 2008, 28.4%
lower than at its inception.

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The dollar rose until March 19 when it peaked at 102.82. Investors flocked to the
safe-haven dollar in response to the Covid Shutdown, The Fed lowered the rate to
zero in March. The USDX fell to its low for the year of 89.63 at closing on
December 30 It ended the year slightly higher at 89.94.

Now, to understand decentralization I need to help you understand the

“blockchain” first.

Let’s take Bitcoin for example. The Bitcoin currency needs a collection of
computers to store its blockchain. For Bitcoin, this blockchain is just a specific
type of database that stores every Bitcoin transaction ever made. In Bitcoin’s
case, and unlike most databases, these computers are not all under one roof, and
each computer or group of computers is operated by a unique individual or group
of individuals.

Imagine that a company (Like Chase bank, or USAA) owns a server comprised of
10,000 computers with a database holding all of its client's account information.
This company has a warehouse containing all of these computers under one roof
and has full control of each of these computers and all the information contained
within them. Similarly, Bitcoin consists of thousands of computers, but each
computer or group of computers that hold its blockchain is in a different
geographic location and they are all operated by separate individuals or groups of
people. These computers that makeup Bitcoin’s network are called nodes.

Bitcoin’s blockchain is used in a decentralized way. However, private, centralized

blockchains, where the computers that make up its network are owned and
operated by a single entity, do exist. So it’s not 100% fool proof but certainly
more valid than the paper counterpart.

In a blockchain, each node has a full record of the data that has been stored on
the blockchain since its inception. Kinda like how banks keep track of most of our
transactions. For Bitcoin, the data is the entire history of all Bitcoin transactions.
If one node has an error in its data it can use the thousands of other nodes as a
reference point to correct itself. This way, no one node within the network can
alter information held within it. Because of this, the history of transactions in each
block that make up Bitcoin’s blockchain is irreversible.

If one user tampers with Bitcoin’s record of transactions, all other nodes would
cross-reference each other and easily pinpoint the node with the incorrect
information Making it even harder to manipulate. This system helps to establish
an exact and transparent order of events. For Bitcoin, this information is a list of
transactions, but it also is possible for a blockchain to hold a variety of

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information like legal contracts, state identifications, or a company’s product

inventory.

In order to change how that system works, or the information stored within it, a
majority of the decentralized network’s computing power would need to agree on
said changes. This ensures that whatever changes do occur are in the best
interests of the majority.

Is the Blockchain Secure ?

Well the Blockchain technology accounts for the issues of security and trust in
several different ways. First, new blocks are always stored linearly and
chronologically. That is, they are always added to the “end” of the blockchain. If
you take a look at Bitcoin’s blockchain, you’ll see that each block has a position
on the chain, called a “height.” As of November 2020, the block’s height had
reached 656,197 blocks so far, Kinda like a “Infinite-Chainlink-Fence”.

After a block has been added to the end of the blockchain, it is very difficult to go
back and alter the contents of the block unless the majority reached a consensus
to do so, which at this point would be very difficult to do so. That’s because each
block contains its own hash, along with the hash of the block before it, as well as
the previously mentioned time stamp. Hash codes are created by a math function

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that turns digital information into a string of numbers and letters. If that
information is edited in any way, the hash code changes as well.

Here’s why that’s important to security. Let’s say a “hacker” or I most realistic
cases the “FEDS”, wants to alter the blockchain and steal Bitcoin from everyone
else. If they were to alter their own single copy of the coin in possession, it would
no longer align with everyone else's copy in the chain. When everyone else cross-
references their copies against each other, they would see this one copy stand
out and that hacker's version of the chain would be cast away as illegitimate.

Blockchain vs. Banks

Banks and decentralized blockchains are vastly different. To see how a bank
differs from blockchain, let’s compare the banking system to Bitcoin’s
implementation of blockchain below.

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Blockchain vs. Banks

Gavin C

Feature Banks Bitcoin

Typical brick-and-mortar
banks are open from 9:00 am
to 5:00 pm on weekdays.
No set hours; open 24/7,
Hours open Some banks are open on
365 days a year.
weekends but with limited
hours. All banks are closed on
banking holidays.

•Card payments: This fee

varies based on the card and is
not paid by the user directly.
Fees are paid to the payment Bitcoin has variable
processors by stores and are transaction fees
usually charged per determined by miners
transaction. The effect of this and users. This fee can
fee can sometimes make the range between $0 and
cost of goods and services $50 but users have the
rise. •Checks: can cost ability to determine how
Transaction Fees
between $1 and $30 much of a fee they are
depending on your bank. willing to pay. This
•ACH: ACH transfers can cost creates an open
up to $3 when sending to marketplace where if
external accounts. •Wire: the user sets their fee
Outgoing domestic wire too low their transaction
transfers can cost as much as may not be processed.
$25. Outgoing international
wire transfers can cost as
much as $45.

•Card payments: 24-48 hours

•Checks: 24-72 hours to clear Bitcoin transactions can
•ACH: 24-48 hours •Wire: take as little as 15
Transaction Speed Within 24 hours unless minutes and as much as
international *Bank transfers over an hour depending
are typically not processed on on network congestion.
weekends or bank holidays

Bank accounts and other Anyone or anything can

banking products require participate in Bitcoin’s
"Know Your network with no
Customer" (KYC) procedures. identification. In theory,
Know Your Customer Rules
This means it is legally even an entity equipped
required for banks to record a with artificial
customer's
1 identification prior intelligence could
to opening an account. participate.

Government-issued
An internet connection
identification, a bank account,
and a mobile phone are
Ease of Transfers and a mobile phone are the
the minimum
minimum requirements for
requirements.
digital transfers.

Bitcoin can be as
Bank account information is private as the user
stored on the bank’s private wishes. All Bitcoin is
servers and held by the client. traceable but it is
Bank account privacy is impossible to establish
limited to how secure the who has ownership of
bank's servers are and how Bitcoin if it was
Privacy
well the individual user purchased anonymously.
secures their own information. If Bitcoin is purchased
If the bank’s servers were to on a KYC exchange
be compromised then the then the Bitcoin is
individual's account would be directly tied to the
as well. holder of the KYC
exchange account.

The larger the Bitcoin

network grows the more
secure it gets. The level
Assuming the client practices of security a Bitcoin
solid internet security holder has with their
measures like using secure own Bitcoin is entirely
passwords and two-factor up to them. For this
Security authentication, a bank reason it is
account's information is only recommended that
as secure as the bank's server people use cold storage
that contains client account for larger quantities of
information. Bitcoin or any amount
that is intended to be
held for a long period of
time.

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now that you can see what the differences are between the Blockchain and
central Banks. But I should mention the Pros and Cons as well.

Advantages and Disadvantages of Blockchain

For all of its complexity, blockchain’s potential as a decentralized form of record-

keeping is almost without limit. From greater user privacy and heightened security
to lower processing fees and fewer errors, blockchain technology may very well
see applications beyond those outlined above. But there are also some
disadvantages.

Pros

• Improved accuracy by removing human involvement in verification

• Cost reductions by eliminating third-party verification

• Decentralization makes it harder to tamper with

• Transactions are secure, private, and efficient

• Transparent technology

• Provides a banking alternative and way to secure personal information for

citizens of countries with unstable or underdeveloped governments

Cons

• Significant technology cost associated with mining bitcoin

• Low transactions per second

• History of use in illicit activities

• Regulation

Private Transactions

Many blockchain networks operate as public databases, meaning that anyone

with an internet connection can view a list of the network’s transaction history.
Although users can access details about transactions, they cannot access
identifying information about the users making those transactions. It is a common

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misperception that blockchain networks like bitcoin are anonymous, when in fact
they are only confidential.

That is, when a user makes public transactions, their unique code called a public
key, is recorded on the blockchain, rather than their personal information. If a
person has made a Bitcoin purchase on an exchange that requires identification
then the person’s identity is still linked to their blockchain address, but a
transaction, even when tied to a person’s name, does not reveal any of your
personal information.

Wow, we have come along way into understanding Crypto together, but now
before I recommend my favorite Cryptos, I want to mention the bad side to crypto
as well, the “Pump and Dump” coins.

Now you might be relaxing in your home one afternoon when your best friend who
recently went down the crypto rabbit hole calls you, and before you can get a
word in, they immediately start informing you about the hottest new coin they just
put a couple grand into, “EtherumMax, I’ve never heard of it”, well you be right as
it just launched that week, thinking this might be the next bitcoin you then pullout
your phone and launch your market of choice, You see the market cap and the
current pice of 000.28 of a cent, and the change in the 24H since launch, up
147%, your eyes widen and you immediately put your order in, “what’s $500 now
when this thing hits one whole dollar.

The next day you wake up and you check your newfound investment to find that
its plunged nearly 200%, and now trading at 000.09. Seeing this you quickly sell
before it hits the bottom, you think to yourself “If I sell now I can’t lose anymore
money.” now your action is fairly common from first time investors we call this
action, “Panic Paul”.

New coins who imitate legitimate coins are Trojan horses. They have their early
investors who go on boasting about the legitimacy and future-proof structor and
security first features.

Beware of these coins or even Coins with a cult-following like DodgeCoin, which
just 6 months ago was trading at 000.03 of a cent and peaked at 0.72 of a cent in
May of this year, which is more than 1000% from a year before that. There are
Thousands of these coins in circulation today, which doesn’t make all crypto a
bad investment, Personally id bet more on the trojan coins than in the currency
equivalent to one of a small stagnate foreign country.

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Researching each coin you put any significant amount of funds into is a safe and
recommended practice. But that is what you should do before making any
investment, like stocks, bonds or Call Options.

EtherumMax is a spinoff of Etherum but is not tied to the original Etherum in

anyway. There are several instances of Duple-Coins in existence, like
BitcoinCash, BitcoinGold or EtherumClassic. All named after the founding titans
but not related at all besides the namesake.

This is okay because with these coins piggy-backing off of already well know
coins can make smaller lesser coins relevant in the market which most coins
serve a different purpose. Like Being a Reserve, A daily transactor, and A hedge
against inflation.

Well now that I’ve warned you about the imposters, and told you not to be like
Paul. Let's dive into what my top 5 coins are for 2021.

1. Ethereum (ETH)
Ethereum is a decentralized open-source blockchain system that features its own
cryptocurrency, Ether. ETH works as a platform for numerous
other cryptocurrencies, as well as for the execution of decentralized smart
contracts.

Ethereum was first described in a 2013 white-paper by Vitalik Buterin. Buterin,

along with other co-founders, secured funding for the project in an online public
crowd sale in the summer of 2014 and officially launched the blockchain on July
30, 2015.

2. Cardano (ADA)
Cardano is a proof-of-stake blockchain platform that says its goal is to allow
“change-makers, innovators and visionaries” to bring about positive global
change.

The open-source project also aims to “redistribute power from unaccountable

structures to the margins to individuals” — helping to create a society that is
more secure, transparent and fair.

Cardano was founded back in 2017, and the ADA token is designed to ensure
that owners can participate in the operation of the network. Because of this,
those who hold the cryptocurrency have the right to vote on any proposed
changes to the software.

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3. Bitcoin (BTC)
Bitcoin is a decentralized cryptocurrency originally described in a
2008 whitepaper by a person, or group of people, using the alias Satoshi
Nakamoto. It was launched soon after, in January 2009.

Bitcoin is a peer-to-peer online currency, meaning that all transactions happen

directly between equal, independent network participants, without the need for
any intermediary to permit or facilitate them. Bitcoin was created, according to
Nakamoto’s own words, to allow “online payments to be sent directly from one
party to another without going through a financial institution.”

Some concepts for a similar type of a decentralized electronic currency precede

BTC, but Bitcoin holds the distinction of being the first-ever cryptocurrency to
come into actual use.

4. Uniswap (UNI)
is a popular decentralized trading protocol, known for its role in facilitating
automated trading of decentralized finance (DeFi) tokens.

An example of an automated market maker (AMM), Uniswap launched in

November 2018, but has gained considerable popularity this year thanks to the
DeFi phenomenon and associated surge in token trading.

Uniswap aims to keep token trading automated and completely open to anyone
who holds tokens, while improving the efficiency of trading versus that on
traditional exchanges.

Uniswap creates more efficiency by solving liquidity issues with automated

solutions, avoiding the problems which plagued the first decentralized
exchanges.

5. Chainlink (LINK)
Founded in 2017, Chainlink is a blockchain abstraction layer that enables
universally connected smart contracts. Through a decentralized oracle network,
Chainlink allows blockchains to securely interact with external data feeds, events
and payment methods, providing the critical off-chain information needed by
complex smart contracts to become the dominant form of digital agreement.

The Chainlink Network is driven by a large open-source community of data

providers, node operators, smart contract developers, researchers, security
auditors and more. The company focuses on ensuring that decentralized

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participation is guaranteed for all node operators and users looking to contribute
to the network.

Now that we have taken this trip towards digital democracy. Let me show you
some good Exchanges to buy from.

1. Coinbase and Coinbase Pro

Fees: Between $0.99 and $2.99 depending on the dollar value of the purchase.

The most widely known and used cryptocurrency exchange in the United States
is Coinbase. Coinbase was founded in 2012, not long after the release of Bitcoin’s
code in 2009, and is a fully regulated and licensed cryptocurrency exchange.
Coinbase currently has licenses to operate in over 40 U.S. states and territories.

Pros

• Solid variety of altcoin choices

• Extremely simple user interface

• Very high liquidity

Cons

• High fees when not using Coinbase Pro

• User does not control wallet keys

While the cryptocurrency industry has been fraught with fraudulent coins and
shady exchanges, Coinbase has largely avoided any controversy. Coinbase offers
an extremely easy-to-use exchange, greatly lowering the barrier to entry for
cryptocurrency investment, which is typically seen as confusing and convoluted.

Coinbase also offers insured custodial wallets for investors and traders to store
their investments. They carry insurance against data breaches and hacking and
your cash is stored in FDIC insured bank accounts. These custodial accounts are
very convenient for newer users just getting their feet wet, but the private keys to
the coins within them are owned by Coinbase, and not the investor.

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Additionally, Coinbase also offers the free Coinbase Pro version that has a
different, but cheaper, fee structure and significantly more options in terms of
charts and indicators. Coinbase Pro is a perfect next step for those who have
learned the ropes using Coinbase, and it helps round out the overall offering by
adding features that the more advanced user would want.

. Gemini (IOS/Android/PC)
Gemini is a privately-owned cryptocurrency exchange that allows users to buy,
sell, trade, and securely store bitcoin, ether, and about 40 other cryptocurrencies.
It was launched in 2015 by Cameron and Tyler Winklevoss.

Gemini has a tiered service with separate interfaces and fee structures for casual
investors and hard-core traders. It has a mobile app, a payment app, and its own
currency, the Gemini dollar. Unlike most cryptocurrencies, the Gemini dollar is a
"stable coin" tied to the U.S. dollar.

Gemini is a direct competitor to cryptocurrency exchanges including

Coinbase and Kraken.

Gemini's Fees
Gemini has separate fee structures for its Gemini Exchange, its mobile app, and
its Active Trader offering. For accounts under $1 million, fees are 0.250% for
buyers, 0.100% for sellers, and 0.200% for auction participants. Certain very
high-dollar transactions are fee-free.

The Gemini Pay app, which allows users to pay for goods with their
cryptocurrency, is fee-free. Transactions can be made in Gemini dollars, the
service's Gemini stable coin, which has the advantage of being less volatile in
price as it is tied to the U.S. dollar. Pay app users can also pay with bitcoin, ether,
litecoin, or zcash.

https://www.gemini.com/

3. Binance.US
Launched in September 2019 in San Francisco as the American arm of Binance — the
world’s largest cryptocurrency exchange by trading volume — Binance.US itself is now
among the 10 largest exchanges by trading volume, according to CoinMarketCap, a
market research website.
While it doesn’t offer as many cryptocurrencies and crypto-to-crypto trading pairs as its
parent company, the 50-plus selection at Binance.US still outpaces many other U.S.
cryptocurrency exchanges. And its 0.1% trading fee is lower than many other U.S.
exchanges.

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Binance is known for its high-speed trade execution. Before company founder
Changpeng Zhao started Binance in China in 2017, he developed a software system for
matching orders for high-speed traders. Binance has courted controversy with
regulators, moving operations from China to Japan; at a May 2020 tech conference,
Zhao claimed the parent company doesn’t have a headquarters because “Bitcoin
doesn’t have an of ce.”

Crypto trading costs and transaction fees:

Binance.US charges a flat 0.1% spot trading fee, which is lower than many other
U.S. exchanges, including eToro (about 0.75% for Bitcoin trades) and coinbase
(which charges 0.5% for trading fees plus a flat fee of up to $2.99 per trade,
depending on trade amount). For traders in a hurry, Binance.US also offers a
0.5% Instant Buy/Sell fee.

Binance charges an additional 4.5% for debit card transfers (unlike its global brokerage,
Binance.US doesn’t allow credit card purchases). There are no fees for cash deposits or
withdrawals by ACH bank transfers, while bank wire transfers are $15 per transaction.
Fees for cryptocurrency withdrawals differ by cryptocurrency; withdrawals of Bitcoin cost
0.0005% and a minimum withdrawal amount of 0.001 bitcoin.

Wow, looks like our Crypto Adventure has come to an end, but not for you. As now you
have obtained the Metrics and understanding of Crypto Currency, the Blockchain And
Exchanges.
Hopefully this was informative enough and most people can understand without too
much effort, but hey where is the fun in that.

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